the reward barometer
TRANSCRIPT
THE REWARD BAROMETER: TRENDS & PROJECTS SHAPING TODAY’S REWARD MANAGER’S AGENDA IN 2014 AND BEYOND
FEMKE DHONT, CENTRE FOR EXCELLENCE IN STRATEGIC REWARDS
1METHODOLOGY
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SURVEY
Questionnaire
17 December 2013– 25 January 2014
43 companies
All sectors
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COMPANY SIZE
2% 7%
7%
14%
69%
Number
0-200201-500501-10001001-2000More than 2000
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BUILDING BLOCKS
Current reward
practices
Strategic importance
& satisfaction
Reward Trends in
2014
Reward building of the future
2CURRENT REWARD PRACTICES
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REWARD FRAMEWORK
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DO YOU HAVE A FORMAL REWARD STRATEGY?
YesNo, but
planning No, not planning
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20132009
‘Reward strategy is ultimately a way of thinking’
(Brown)
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WHICH FACTORS DETERMINE BASE PAY PROGRESSION?
Individu
al P
erfo
rman
ce
Mar
ket P
ositi
oning
Individu
al C
ompe
tenc
ies
Compa
ny P
erfo
rman
ce
Other
Serv
ice-
relate
d Pa
y0%
20%
40%
60%
80%
100%
% of respondents
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WHICH FACTORS DETERMINE THE PAY-OUT OF INCENTIVES?
Indi
vidu
al P
erfo
rman
ce
Compa
ny P
erfo
rman
ce
Indi
vidu
al C
ompe
tenc
ies
Other
Mar
ket P
ositi
onin
g
Serv
ice-re
late
d Pa
y0%
20%
40%
60%
80%
100%
% of respondents
3STRATEGIC PRIORITIES & SATISFACTION
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4.25 4.75 5.25 5.75 6.25 6.754.25
4.45
4.65
4.85
5.05
5.25
5.45
109
8
5
4
7
2
6
3
1
Satisfaction
Strategic Importance
1 – Diversity2 – Recruitment3 – Retention4 – Grading5 – External Equity
6 – Competence management7 – Workforce Planning8 – Internal Equity9 – Performance Management10 – Cost Management
STRATEGIC IMPORTANCE VERSUS SATISFACTION
Keep
Areas of concern
Highest priority
Good Job
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HIGHEST PRIORITIES
4REWARD PROJECTS FOR 2014
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TOP OF MIND IN 2014
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WHAT WILL BE ON THE AGENDA THE COMING YEARS?
TOP Reward Projects 2014
Reward Communication
Short-term Incentives
Performance Management
Base Pay
Flexible Benefits
Car Policy
Pension & Group Insurance
Long-term Incentives
Work-Life Benefits
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CONCLUSION – CHALLENGE FOR 2014
Make rewards…
5THE REWARD BUILDING OF THE FUTURE
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Indicate to what extent you agree that the following suggestions are
sustainable elements for the reward building of the future
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BASE PAY – EVALUATE THE FEASIBILITY OF THE FOLLOWING SUGGESTIONS..
Increase based on individual performance
Competence-based increase
Index limited to the first 3500 euro gross
Increase till mid-Point
Seniority-based increase till Y6
Only indexation as increase
Seniority-based increase
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WHATS DOES THE LITERATURE SAY ABOUT SENIORITY-BASED PAY?
Tenure and performance are positively linked, but
At a diminishing rate
Y0 – Y3: positive effect
Y3 – Y6: decreasing positive effect
Y14 - …: zero effect
Rationale for ‘light’ seniority-based pay till certain seniority level
(NG &Feldman)
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VARIABLE PAY – WHAT DO YOU THINK ABOUT THE FOLLOWING SUGGESTIONS?
Target bonus as fixed amount
Profit Sharing Systems
Participation in Shares
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EMPLOYEE BENEFITS – YOUR THOUGHTS ON THESE IDEAS?
Mobility Budget
DC plan based on reference salary
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MORE INFORMATION?
Femke Dhont – Programme manager
+ 32 (9) 210 97 64
FemkeDhont
www.vlerick.com/strategicrewards