European Reward Conference 2017- "Keeping your reward fundamentals relevant" (breakout session)
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Transcript of European Reward Conference 2017- "Keeping your reward fundamentals relevant" (breakout session)
10 February 2017
Keeping your reward fundamentals relevant
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Joris Wonders and Judith Laarman, Danone
Contents
2© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Introduction to Judith Laarman and Danone
Q&A with Judith (part 1)
Danone C&B Transformation / Reward Strategy
Willis Towers Watson views on job levelling & architecture and
base pay
Q&A with Judith (part 2)
Job levelling & base pay at Danone
3
Q&A
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
REWARD
STRATEGY
JOB LEVELLING AND
ARCHITECTUREBASE PAY
CONFIDENTIAL DOCUMENT
One DANONE
One PurposeDriven Company which
respects everyone’s uniqueness and
develops each talent to the maximum, through a meaningful journey,
in strong diverse teams.
5
Job Levelling and Architecture
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
6© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Work is
leaving
organisations
Distinction
between job
and person
blurring?
Roles and
objectives are
changing more
rapidly than ever
Career paths
are more
diverse and
less linear
Traditional job
evaluation is too
rigid and
bureaucratic
Common job
architecture needed to
support HRIS
Job Levelling Health Check tool
7
Summary of our 11 Health Check tests
Assessing the effectiveness of current job levelling and architecture and alignment with organisation goals.
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Health Check Concerns Effectiveness tests
A. Is our Job Levelling methodology suitable?(A1) Business Alignment/ Applicability of Job Levelling factors
(A2) Number of grades/ bands
B. Have we got our implementation and governance right?
(B1) Grade alignment
(B2) Distribution of grades/ bands
(B3) Maintenance of documentation
(B4) Number of re-evaluations
(B5) Equal pay legislation compliance
C. Does our grading structure link effectively to other areas of HR?(C1) Alignment to Base Pay
(C2) Talent and Reward applications
D. How satisfied are HR and employees with our approach?(D1) HR/ Reward feedback
(D2) Employee and Line Manager feedback
Job Levelling Health Check tool
8
Example outputs
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Job Levelling Health Check tool
9
Example outputs
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
10
Base pay
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Giving base pay a reality check
11
Stop confusing “pay for skills” with “pay for last year’s performance”
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Suggesting that old tools and
approach to the annual merit
cycle may need to
change. As the number
one driver of attraction
and engagement, we need to
get base pay
right in the
modern context
Performance Rating
Salary Range Position
Below Minimum
Lower Third Middle Third Upper Third
Unsatisfactory performance 0.0% – 2.0% 0.0% – 2.0% 0.0% 0.0%
Performance needs
improvement2.0% – 4.0% 1.0% – 3.0% 0.0% – 2.0% 0.0% – 1.5%
Good performance 4.0% – 7.0% 3.5% – 6.0% 2.5% – 4.5% 1.0% – 3.0%
Excellent performance 7.0% – 11.0% 5.0% – 8.0% 3.5% – 6.0% 2.5% – 4.5%
Half of employers
expect to pay more for certain skill sets in the next 3 years*
Our managers execute our base pay program well*
51%Source: 2016 Willis Towers Watson Talent Management & Reward Survey
What’s Trending?
12
Rethinking base salary programme purpose…
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
PURPOSE QUANTUM
Meaningful amounts
Performance-based or
promotion increases should
be perceived as meaningful
or “zero” increases are
provided
“Meaningful” may vary by
job level and salary
DIFFERENTIATION
2Less emphasis
on last year’s
performance
Broader future oriented
and skills view and career
progression
Objectives for aligning to
“market”
Rethink the annual cycle
“Annual” may not be right cadence for all talent segments
Meets an age
of transparency
The degree of individual pay
variance may differ by talent
segment
Salary increases may also be
differentiated by talent
segment
Clear communication of
differentiation criteria is
essential
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