From payroll generation, compensation & benefits to now total rewards- What are your views on the evolution of this vertical?
Till late 1990s, HR was a combined function, we didn’t have specialized roles. With the need for enhancing productivity and a visible crunch in the talent market, the importance of attracting and retaining talent became evident. That’s when organizations started talking about the importance of Rewards and Talent Management. Post this, over the last few years, the idea of Total Rewards strategy is talked about across organisations. With the complete bouquet of compensation, benefits, environment & development being under it, the Total Rewards strategy has now become an integral part of the business strategy.
The stakeholder management with a CFO, CEO and HR Business Partners is a tricky one for a compensation & benefits professional. What would be your suggestions to the young Compensation & Benefits professionals for managing these stakeholders?
There is a lot of close working that needs to be done with each of these stakeholders. All the total rewards work has to be done with financial aspects in mind. Whether the company has the budgets to sustain the ideas is a critical thing for a Total Rewards professional to understand. I have personally worked a lot with my CFO because it’s only when you understand financial aspect of business, that’s when you can design relevant programs which is very meaningful from a business standpoint. Our programs are drawn from a CEO’s vision. If the business is growing, then how can we contribute in that aim of enhancing productivity. How do we design an incentive plan? What are the views on Long Term Incentives; all these plans would be flowing in, basis detailed discussions with the CEO. HR Business Partners are the main team members who are able to implement what we plan. It’s very important for us to make them aware of fundamentals of reward and every minute detail of our program. Hence we work very closely with them and also organise various workshops for them to understand the criticality of it hence make them ready for carrying out our programs with their respective client groups.
What are the competencies required in a compensation & benefits professional?
1. Being number savvy and analytical. In general, HR people are not very happy dealing with complex numbers and financial terminologies. However, for a Rewards professional, this is something they need to be conversant with.
2. Being collaborative. What is the organization wanting to achieve and how can you devise your plans around that in coordination with HR and Finance. The linkage with business and people strategy needs to be built and the appropriate balance needs to be worked out.
3. Ensuring balance between employee and organizational performance. Thorough analysis needs to be done and if the balance is there then how is it giving returns to the employer and how do we make it a win win situation for the employee and the employer
4. Understanding of the business by knowing EBITDA, gross margins, cash flow, operating margin and other financial terminologies is critical. As a Total Rewards person, one should be able to speak business language and should have an in depth understanding.
5. Program Management capability. It’s all like running mini projects, with action steps being broken down to ensure complete execution. E.g during a salary review exercise we do everything from change management to educating HR , educating Managers, running the process seamlessly, all to be completed within the scheduled time-frame, thereby making it extremely rigorous. Therefore, a Rewards professional should have the ability to manage it effectively and run it like a Program Manager.
There is always a thin line between what’s enough and what’s not when it comes to defining a Total Rewards Strategy for an organization. What steps would you use to evaluate a total rewards strategy before rolling it out?
Yes, there is a thin line. The organization needs to take a call depending on where it sees itself and what the vision & market reality is. There has to be a clear balance between organization needs and individual needs under these four aspects:
Compensation– It depends on the organisational philosophy as to where it wants to position itself with respect to the market. Certain organisations would position itself at the median, owing to its higher brand value, whereas certain would position itself higher than its competitors So it depends on what stage of evolution the company is in, what it’s business and people strategy and how does compensation help it achieve those.
Benefits– Organisations would like their benefits to be in line with the market and looks at enhancing it regularly. Overall, it also depends on the affordability of the company and the need to relook at their policies. The country, the industry and the expectations of talent market will determine practices in this.
Environment– It’s about the culture one wants to build. The values and core ethos of the company will determine how your HR policies are made
Development– How much does a company want to develop its employees? Would it want to offer global mobility options, depending on the feasibility of the roles.It also depends on the kind of market situation, availability of skills in the market etc.
From among the many employee benefits schemes implemented by you, which have been the most successful ones?
Considering the multi-generational workforce, we introduced the flexibility aspect in opting for medical insurance. The young employees of our R&D team didn’t need to cover their parents since they were still working and already covered and on the other side there were employees who wanted to cover their parents and in-laws. So we introduced a flex insurance two years back wherein if you don’t opt for a particular cover, we give that money back to you in your salary. It was received really well by the employees and there’s been a 62% uptake in the program.
Another thing we did was bring a lot of Indian flavor to the Sabbatical policy of ours. In India, it’s a reality that people, especially women want to take a break to take care of their ailing parents or for managing studies of their 10th/12th Class children. We added those aspects in our policy, We have seen positivity coming in and some of the employees availing such benefits. Its heartening to see such a positive response to these flexibilities introduced at the organisational level.