The Importance of Total Rewards from an HR Executive perspective. Hennie Dippenaar October 2013

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1 The Importance of Total Rewards from an HR Executive perspective Hennie Dippenaar October 2013

2 WORLDATWORK TOTAL REWARDS MODEL

3 THE ELEMENTS OF TOTAL REWARDS Compensation Benefits Work-Life Performance and Recognition Development and Career Opportunities

4 WHAT DOES THE RESEARCH SAY? It goes beyond standard remuneration by embracing the company culture, and is aimed at giving all employees a voice in the operation, with the employer in return receiving an engaged employee performance. In other words, total reward provides a broader view to treat everything that an enterprise can offer to its staff and everything that the employees can promise to their companies. The silos within Human Resource Functions need to be bridged The problem is that firms do not always introduce HRM techniques in an institutionally supported and coherent package, but in an ad-hoc fashion and piecemeal manner. The way an organisation manages its HR has a significant relationship with the organisation s results In a world in which financial results are measured, a failure to measure HR policy and practice implementation dooms this to second class status. Performance-Driven Compensation: The Corporate Talent Insurance Policy

5 What do CEOs worry about? (% CEO respondents) Insufficient leadership talent Lack of alignment of individual and business objectives 41 Low employee satisfaction Poor decisions related to global sourcing Insufficient talent within the organisation as a whole HR costs 56 9 Low level of diversity Source : Economist Intelligence Unit survey, May 2012

6 Some of my key learnings We have a vital role to play some great successes! How clear, simple and understood is our HR Strategy? Does it really support the key business issues? How integrated do we work as an HR Function? How well are we trusted by others? How would they rate our creativity and pragmatism combined with good governance to find solutions? A significant proportion of respondents believe that their heads of HR are overly preoccupied with a narrow HR agenda. Forty-one percent think their HR heads are too focused on processes and rules and 37% say that they don t understand the business well enough. If heads of HR see the corporate strategy only through the lens of their specialism, most CEOs will find this irritating The Economist

7 Some of the challenges for the Reward Community Being pro-active and providing creative solutions in managing employee costs (Example International Assignees, Post Retirement Healthcare liability) Closer link to managing talent in the organisation/all the challenges we face. Variable pay and the link to productivity and company performance. Major progress, BUT open the black box Support employees to really understand their compensation and the Total Rewards Model.

8 Some of the challenges for the Reward Community Continue with debate about Performance Management. (And continue to provide solutions!) Communication, communication Do we follow the same recipe vs really thinking out of the box? How can you better understand the Structure of Interpretation of your line colleagues? Governance, without becoming auditors!

9 Areas of excellence HR does a good job of (% CEO respondents) Leading the HR function Evaluating employee performance 67 Understanding the HR needs of the business Identifying and recruiting key talent 58 Managing benefit and compensation costs Creating a culture that values excellent performance 50 Developing key talent 42 Succession planning 34 Global sourcing decisions Source : Economist Intelligence Unit survey, May 2012

10 I believe there are numerous potential trim-tabbers in every organisation- who can lead and spread their influence no matter what position they hold. They can move themselves and their team or department in such a way that it positively affects the entire organisation. Stephen Covey That is our role and we can do it!!