Lasting Relationships Oracle
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Transcript of Lasting Relationships Oracle
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Lasting relationshipsImproving Talent Retention with Performance and Reward
Management
JUNE 19, 2015 LE KINH LUAN
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Reward and Retention
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3 2015 Hay Group. All rights reserved
What is Total Reward?
COMMON EXAMPLES REWARD ELEMENTS DEFINITION
Work culture and climate
Leadership and direction
Career/ growth opportunities
Work/life balance
Job enablement
Recognition
Intangibles (typically
intrinsically valued)
Total reward
Cars
Clubs
DiscountsPerquisites / Perks
Total remuneration
Retirement
Health and welfare
Time off with pay
Statutory programsBenefits
Total compensation
Stock / equity
Performance shares Long-term incentives
Annual incentive
Bonus/spot awardsShort-term variable Total
cash Base salary
Hourly wage Base cash
Intangible
Tangible
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4 2015 Hay Group. All rights reserved
Objectives of reward components
Component Objectives
Base Pay Recognize intrinsic value of job or individual;
Attract, retain and improve individual performance
Incentives Provide discretionary income;
Vehicle for capital accumulation
Benefits Recognize membership in the organization;
Provide protection and security
Recognition Drive organizational values;
Reinforce after-the-fact
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5 2015 Hay Group. All rights reserved
Objectives of reward components
Component Objectives
Career/ growth
opportunities
Encourage development;
Increase motivation & productivity
Leadership and
direction
Provide clarity of company direction and objectives;
Drive employee performance
Work culture and
climate
Work/life balance
Provide performance-conducive workplace;
Bring job satisfaction & pride
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6 2015 Hay Group. All rights reserved
Base
Pay
1950
Base Pay is King
Job-for-life mentality
Pay based on promotion
Base
Pay
1960
STI
Introduction of Variable Pay
Emphasis on market performance
Base
Pay
1970
STI
Increased Diversity
more alternative work arrangements
Base Pay
1980
STI
Performance Pressure
increasing performance orientation
increasing cost pressure
Base
Pay
1990
STI
LTI
Shareholder Value
focus on shareholders
mitigating the bias on isolated short-term focus
2000
Base
Pay
STI
LTI
Variable is King
Performance is everything
2010
Base
Pay
STI
LTI
BenefitsWorkLife
CompleteRewards
Rewardis morethan pay
Evolution of Rewards
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7 2015 Hay Group. All rights reserved
Best value from employment cost
70
15
105
10
30
30
30
Base
Benefits
Incentives
Intangibles
Cost to
employer
Perceived value
to employee
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8 2015 Hay Group. All rights reserved
Caring
Competitive base pay
Comprehensive benefits
Company-wide incentives
Work-life balanceFocus
on People
Low
Low
Focus on PerformanceHigh
Desired Mix of Remuneration Elements
High
Integrative
Competitive base pay plus benefits
Individual & team - based incentives
Robust performance-management system
Learning environment
Apathetic
Low base pay
Minimal benefits
Minimal training,
Limited communication
Demanding
Low base
Aggressive incentives
Rigid performance management targets
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Performance and Retention
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10 2015 Hay Group. All rights reserved
Performance management cycle
Frequency and quality of dialogue
Differentiation of Performance
Clarity of expectations
Dialogue
Dialogue
Team objectives, jobs, roles
Structure, culture &Organization goals
Strategy
Results
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11 2015 Hay Group. All rights reserved
Different performance management stages
1. Focus on
performance
appraisal
More
sustainable
performance
2. Focus on
performance
management
3. Focus on strategy
alignment and
performance culture
Less
sustainable
performance
Dialogue
cycle
Financial metrics
Perform
ance xx
Reduce
Costs
Volume
Ave Price
ROCE
Image -
Intangibles
Grow
Revenue
COGS
SGA
Int. & Dep.
Tax
Brazil
US
Prod. mix
P1, P2,
IT assets
TONWC
Improve
P/E ratio
Strategic
Context
Performance
Model
DNA
Gap
Analysis
Alignment
of Systems
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12 2015 Hay Group. All rights reserved
and their impact to employees
Focus and impact of performance management models
1. Focus on
performance
appraisal
More
sustainable
performance
2. Focus on
performance
management
3. Focus on strategy
alignment and
performance culture
Less
sustainable
performance
I need coaching to improve my
competencies and achieve the
objectives
I must meet
my targets
I am truly committed to
maximize my own, my
teams and my companys
performance
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13 2015 Hay Group. All rights reserved
Performance management: Employee perspective
Employees are typically glad to put their focus/energy to what the
organization wants, if only they knew what that was!
Employees need and want feedback
Employees support what they help create
Employees are much more likely to achieve an objective if they have
been involved in setting it
To be acknowledged and rewarded for accomplished results
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14 2015 Hay Group. All rights reserved
Performance management:Common challenges
Seen as an event vs. an ongoing process
Manager discomfort with coaching & feedback
Poor objectives / measures
Inflationary ratings and lack of differentiation
No discussion, then end of year surprises!
Purely HR driven. Viewed as a necessary-HR-evil
Seen as a process only used to fire people
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15 2015 Hay Group. All rights reserved
Performance management: Review traps
Unplanned/unstructured
Based on gut feel
Focused on the person and not performance
Nasty surprises
Avoiding important issues
Tackling too many issues or dominated by one issue
Too little positive messages or praise
Destructive and personal criticism
Vague unhelpful feedback
Not enough listening and too much talking
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16 2015 Hay Group. All rights reserved
Role of the Manager / Leader
Give attention
Give direction
Give trust
Give support Give guidance Give appreciation
Give direction
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17 2015 Hay Group. All rights reserved
What the best companies do -Molding and mentoring
Source Hay Group Best Companies for Leadership Survey - 2013
Create opportunities at all levels for people to develop their leadership
capabilities
Actively managing a pool of successors for mission critical roles
Personally spending time coaching and mentoring others
Give extra consideration to the middle management pool, ensuring that the
emerging leadership pool can simultaneously focus on innovation and
operational excellence
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18 2015 Hay Group. All rights reserved
What the best companies do -Rewarding strategically
While many companies still reward on results achieved, on hard
numbers now, not softer concepts like collaborating for a brighter
future, the best companies reinforce collaborative behaviors through
formal rewards and recognition programs
They reward operational excellence too, and are much more likely
than their peers to incentivize operational efficiency
Source Hay Group Best Companies for Leadership Survey - 2013
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19 2015 Hay Group. All rights reserved
Contact:
Le Kinh Luan
Hay Group Vietnam
(84) 8 39141188
#Unit 1, Level 33 Bitexco Financial Tower,
2 Hai Trieu St., Ben Nghe Ward, Dist 1,
Ho Chi Minh City, Vietnam
www.haygroup.com/vn