powerpoint presentation - aonhewitt chinatcmchina.aon.com/tcm/2013 rewards hr practice...

- Leading Companies

2013 Rewards Strategy and

HR Practice Executive Summary

Below 500

52.7%

501- 5,000

35.6%

5,001- 25,000

10.0%

Over 25,000

1.7%

Participants

by Size

of Workforce

Aon Hewitt China has been conducting HR Practice and Benefit Survey

for more than ten years. This survey tracks the employer sponsored HR

practices and benefits for local employees and gives insights from Aon

Hewitt perspective on the trends of these practices. In 2013, over 800

local and foreign companies from diverse industries participated in this

survey, including 532 companies in 1st tier cities and 278 companies in

2nd tier cities.

Consumer Goods

/ Retail

8.7%

Healthcare

11.4%

Chemical

8.9%

Hi-tech

20.9%

Financial

3.7%

Others

31.3%

Participants by

Industry

About This Survey

Auto

15.1%

2

Example

75.0% companies have

this policy

75.0%

In of it 30%

60% of respondent companies’

plan among the 75%

companies who have this

policy use annually payout

Rewards Strategy - A statement of compensation

philosophies and objectives:

• Be consistent with business objectives

• Direction for administration and design

• Basis for communication

• Standard for program evaluation and monitoring

Rewards Strategy Design Components: 10 Ps

2013 Rewards Strategy and HR Practice

Executive Summary

Reward

Strategy

Design

10. Pay

Communi-cation

1. Pay

Components

2. Pay

Positioning

3. Pay

Uniformity

4. Pay Fairness

5. Pay for “What”

6. Perfor-mance

Measures

7. Pay Volatility

8. Pay Time

Horizon

9. Pay Policy

3

Product Innovation Operation Excellence Customer Intimacy

Rewards are not a strategic tool Rewards are used as a strategic

tool

Rewards are tied to

organizational values

Rewards are neutral Pay for performance is prevalent Pay for performance is prevalent

Base salaries and benefits are

competitive

Base salaries below market with

high variable pay

Base salaries competitive,

variable pay depending upon

performance

Broad based profit sharing Competitive benefits with high

flexibility

Competitive benefits with

considerable flexibility

Little differentiation on

performance

Deferred profit sharing and

saving plans

Profit sharing with some

differentiation according to

performance

Standard benefits with little

flexibility

Many lifestyle services and

defined benefit plans


Executive Summary

Rewards Strategy for Different Value Driven Organization

4

Infancy Growth Maturity Renewal

No "defined jobs",

external equity more

important than internal

equity

Consolidation of jobs -

internal equity more

important than external

equity

Emergence of

"specialist jobs" -

structured job

evaluation systems

with focus on external

equity

Reduction of jobs with

a focus on

"realignment" with the

market

Compensation flexible,

combination or cash

and other reward

vehicles (stock), linked

to actual results

Defined salary grades

& ranges to control cost

Highly competitive

(multiple) short term

bonuses

Pay increases based

on individual

performance with the

position on salary

range

Hybrid design systems

from growth and

maturity stages are

adopted

Base pay level set

below the market

average (however this

is flexible to attract the

right talent) with

aggressive short term

bonuses as well

Base pay level set at

the market average

with aggressive short

term bonuses as well

Strong emphasis on

base salary with

emphasis on job

security, career

development and

perquisites

Short and long term

incentives similar to

those in growth stage

Base salaries marked

to the market average

with competitive short

term and long term

incentives program

Major Challenges:

trade off between "risk

& leverage" in

designing compen-

sation program

Major Challenges:

trade off between

"consolidation

& recognition"

Major Challenges:

trade off between

"internal & external"

equity in designing

compensation program

Major Challenges:

trade off between

"broad based & critical

few" in designing

compensation program


Executive Summary

Rewards Strategy in Different Growth Stage

5

Below 500

26.6%

501- 5,000

44.6%

5,001- 25,000

26.4%

Over 25,000

2.4%

Participants

by Size

of Workforce

This report provides a high-level overview of HR

practice at 239 leading companies operating in 1st tier

cities such as Shanghai and Beijing. These results are

designed to equip you with the data and insights you

need to shape your organization rewards program from

a business perspective.

Consumer Goods

/ Retail

16.8%

Healthcare

13.8%

Auto

12.1% Chemical

11.7%

Hi-tech

23.4%

Financial

7.1%

Others

15.1%

Participants by

Industry

About This Report

6

Market-Leading Practice at a Glance

Rewards Strategy and Practice

Salary Structure

Short-term Incentive

Domestic Relocation Policies

Training and Development

Domestic Business Travel

19.1%

Target Total Remuneration

Most companies target at

median (50%ile) of the market

50

0

100

Target Total Cash

Compensation



50

0

100

50

0

100 27.8%

63.0%

of the companies target their

Senior Management level at

the 75%ile of the market

Target Guaranteed pay

Trend

Decrease

Steady Trend

50

0

100



29.4%

Increase

Trend

7


Salary Structure





Increase

Trend

15.7%

Lead/Lead

Companies age the salary

structure with this year’s

projected salary increase rate

Steady Trend

31.4%

Lead/Lag

49.9%

Lag/Lag

Lag/Lag is the major approach

for aging salary structure by both

all and leading participants,

those percentages are around

50%.

age structure 6 months ahead of effective date

age structure 12 months ahead of effective date

structure only adjusted to current effective date


8

Comprehensive Performance Plan

64.6%

of respondent plans of leading

companies provide

comprehensive performance

plan by job function

37.3%

86.6% of leading respondent

companies’ plan use

annually payout


Salary Structure





Individual Performance Plan

26.7%


companies provide individual

performance plan by job

function

44.6%



annually payout

Team Performance Plan

14.4%

of leading respondent

companies’ plan use annual

payout

50.0%

Over 44.8% of respondent plans of

leading companies provide

team performance plan to

all employees

Increase

Trend

Steady Trend

Market-Leading Practice At a Glance

Sales Bonus Plan

40.5%


companies" plans use

quarterly payout

48.2%

Over 95.0% of respondent plans of

leading companies provide

sales bonus plan to

employees by job function

Cash Profit Sharing Plan

8.2%


companies provide cash profit

sharing plan to all employees

50.0%



annually payout

Sales Commission

9.7%


companies provide sales

commission plan to employees

by job function

100.0% 57.9%



monthly payout

$1

9


Salary Structure





Increase

Trend

Steady Trend

73.8%

Transition

Period Accommodation Arrangement

The typical length of transition

period is one month.

75.0%

One-time Relocation Allowance

In the market, companies prefer

to provide flat amount to

relocated employees, also some

just pay an additional one month

base salary as a one-time

relocation allowance.

57.3%

Aggregate

Cash Allowance

Flat amount or percentage of

base salary

Typically RMB 2,000 ~ 4,000 or

15% ~ 20% of the base salary

when relocate from 1st tier cities

to 1st tier cities, but the value

varies from city tier to city tier

76.8%

Housing Assistance

Paid by cash or housing

reimbursement

Typically RMB 3,000 ~ 6,500 when

relocate from 1st tier cities to 1st tier

cities, but the value varies from city

tier to city tier.

15.9%

Increase

Base Pay

56.7%

Home Visit

Assistance

Some companies provide air

reimbursement to relocated

employees for home visit as well

as additional leave days.


10


Salary Structure





100.0%

Company Orientation

Internal trainer introduce the company

overall status, HR policy, IT and so on

59.8%

Key Employee Development

88.3%

Work Related

Skill / Basic Skill Training

Increase

Trend

Steady Trend

33.5%

Overseas Job Rotation

74.9%

New Management Training

The prevalent practice of the

duration of the management

training program is around 2

years 91.2%

Leadership Development


33.9%

Domestic Job Rotation

11


Salary Structure





Steady

Trend

36.2%

Travel Allowance

The majority cover the expense

by cash allowance.

Typically 150 ~ 200 RMB/Day

73.8%

Meal Reimbursement

Most companies pay actual

reimbursement with daily cap

Typically 120 ~ 200 RMB/Day

92.9%

Transportation Reimbursement


reimbursement without cap

53.8%

Telephone


reimbursement without cap

52.4%

Laundry

A proportion of companies also

handle laundry expenses

through actual reimbursement

without cap if the travelling

days are more than 5days

Contact:

Hot Line: 800-988-0667

Email: [email protected]


12

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