Spicing up your Comp & Ben for all tastes

Shalini Shukla 13 Dec 2012

Differences in the perception of work and rewards amongst different generations of employees may have significant implications on base salaries, pay increases, incentives and benefits. To retain and motivate their top performers, organisations need to engage their employees via more methods than just providing a base salary, annual increments and some flexi-benefits.

In essence, people’s expectations and aspirations are a continuum – from modest to those right out in the stratosphere, says Kamal Kant, part-time lecturer in Management and Employment Relations at Nanyang Technological University and SIM Global Education.

“Designing compensation and benefits packages needs to take cognisance of the employee profile you seek and your organisation to absorb them into its culture,” he says. “There is where interviews, orientation and acculturation to the organisation matters.”

Employers therefore have to not only package the remunerations and rewards bundle appropriately, but also link it to the type of traits and characteristics from employees they seek in their business.

“If you are a large organisation, you need the full spectrum, but if you are small company limited by budget or focusing on a niche market, you cannot have it all,” says Kant. “Be selective according to your business.”

Demands of different generations

Different people want different things. Some of this is generational, while other variances are linked to factors such as years of service, gender and nationality (though increasingly less so).

“For instance, Generation X employees may have a stronger preference for fixed pay versus variable pay, as compared to Generation Y staff,” says Paul Simons, Head of Product Delivery, Performance, Reward and Benefits, Standard Chartered Bank.

Generation Y workers might be prepared to work for an organisation for less money if they were to receive regular reward and recognition for the work they have undertaken, or are given the opportunity to work more flexible hours and provided a training schedule for the coming 12 months,” says Mark Robinson, General Manager, Power2Motivate Asia-Pacific.

While he’s cautious about generalising, Simons finds that Generation Y workers want more immediacy of feedback on performance as well as rewards. “They also want more frequent and rapid career development,” he says.

“Generation X staff may have families, so they might require more comprehensive health insurance, extra time off to look after school-going children during holiday periods, and regular rewards and recognition, showing that they are valuable to the organisation,” he adds. “A base salary no longer provides the total benefits that an employee wants to receive from employment.”

The different eras and environments employees grew up in also influence their behavioural patterns and attitudes. In general, older employees who grew up in the ‘poorer’ post mid-20th century are willing to make adjustments and adaptations more readily.

“The older group brings more maturity, discipline and, increasingly, an attitude to keep up with the times through retraining and learning,” says Kant.

On the other hand, the younger cohort who are a product of the affluent 1990s and the first decade of the 21st century have bigger expectations and aspirations. This is expected as they have fresh aspirations for ‘dream-jobs’ and ‘dream remuneration’, sometimes created by rhetoric or media hype, or employers themselves by enticingly-crafted job advertisements.

Also, they are better-educated, more technology-savvy and on the ball – hitting the road running at ‘high-speed’, adds Kant.

Ultimately, HR needs to understand the unique needs of each generation and reward them accordingly. “I think the end point has to be more flexibility in what we offer employees,” says Simons.

Tailored rewards

Rewards for Generation Y staff are best geared towards technology and gadgets. “They like to redeem items that can be utilised in a digital environment – mobile phones, tablets, MP3 devices, music downloads, and movie tickets,” says Robinson.

Generation X employees are also looking for items that are relevant to their day-to-day lives. Home appliances, baby products and children’s toys are most highly redeemed through Power2Motivate’s incentive programmes; although TVs and computer products also get regularly redeemed by this group of workers.

“This group has the highest expectations, especially of family-friendly intangibles such as childcare support and time-off for family ‘emergencies’,” says Kant. “Also do not discount the singles. Some are saving to get married and start a home while others have the burden of elderly parents with medical issues – treatment and medication are not cheap.”

Baby Boomers tend to save their reward points for large purchases such fridges and washing machines, or travel-related products.

As they grew up in a time of fast population growth and tough competition for plumb roles, Baby Boomers prefer (or more readily accept) performance differentiation and equity-based rewards.

“They want to share in the success they helped create,” says Simons. “As they get older, sabbaticals become important – this is, of course, the generation that changed the world.”

Compensation and benefits managers and directors therefore have a tough job balancing people needs and organisational needs. Having the right people at the right price to maintain company competitiveness is important, says Kant.

“Good sound compensation and benefits professionals can offer global advice and guidance, both local and international,” he adds. “This is one area in HR where if you can afford it, you should try not to use the do-it-yourself method but rather, get good experienced folk on board or as advisors.”

Designing rewards programmes

While a few years ago, WorldatWork found most companies weren’t thinking about generational differences in the workforce as an important factor when designing total rewards programmes and plans, things are now changing.

Standard Chartered, for instance, is very aware of the importance of considering the needs of a multigenerational workforce when designing, administering and communicating total rewards programmes.

“Our internal research and collaboration on programmes such as Future of Work become lenses through which to look at reward proposals and plans,” says Simons.

Multinational corporations generally have had high exposure to the overall concept of Total Rewards. This enables them to understand the processes involved in developing and implementing a Total Rewards plan into the working environment.

“Yes, there are local idiosyncrasies, but generally, regardless of the nationality of the people involved, the overall understanding of what determines a Baby Boomer, Generation X and Generation Y (worker) is still relevant,” says Robinson.

Progressive local organisations, on the other hand, have studied what the international businesses have been undertaking and implementing the same strategies with success.

“They realise that to compete on a level playing field, they also need to recognise that catering to the differing generations of their workers determines the success of their organisation and the retention of high-valued employees,” Robinson explains.

Traditional local organisations, whilst still successful, are starting to find it harder to compete for and retain high performers. This is because there is an underlying mentality in certain circumstances that suggests; “I am giving them a job and paying them a good salary, why do I need to then reward them for doing their job?”

“While many organisations do deem it to be important to look at generational differences when developing a total rewards programme, there are many organisations that do not fully understand the future importance of implementing a comprehensive total rewards offer,” says Robinson.

Case Study

ANZ Direct

ANZ Direct is a business unit of the ANZ Banking Group which provides the channels for all of its customer contact, from inbound customer service and new product sales all the way through to online support.

In 2009, ANZ Direct selected Power2Motivate to provide its employee reward and recognition programme. The transition to Power2Motivate’s solution presented several challenges, the biggest being the existence of an established service and the length of time it had been in place.

Key drivers of programme

•        Tiered awards – A programme which allowed management to reward team members on a tiered system. These awards range in value from $25 to $300 and all encompass ANZ values, ensuring easy interpretation by team members.

•        Empowerment – The ability for team leaders to recognise employees easily and timely; ensuring that the moment an employee demonstrates required behaviours they are rewarded.

Program structure

•        Enhanced product offering – Employees are not rewarded with just movie tickets and gift vouchers, but with points they can redeem on thousands of reward items, giving freedom of choice.

•        Keeping the programme alive – ANZ Direct employees are taken through the recognition programme during induction, followed by yearly refresher training courses on reward and recognition conducted by Power2Motivate. The regular circulation of screens, posters and newsletters are also used to effectively promote the programme.

Results:

•        73% of employees have received an award

•        88% of employees have used the system since the launch

•        40,671,444 points have been issued through the ANZ Direct programme

•        5,724 awards have been issued

 

Casestudy

Standard Chartered

Standard Chartered has broadened its approach to what it delivers as well as how it does so, in response to the diverse needs of its multigenerational workforce.

“We’ve introduced flexible working policies (such as working from home, part time working and flexible hours) across our top markets,” says Paul Simons, Global Head of Reward – Consumer Bank, Standard Chartered.

“We also have a much stronger emphasis on well-being in the broadest sense and we think this will become even more important in the future,” he adds.

Organisationally, the Bank is spending more time building insights into its different groups of employees so that HR can know what they really want. Simons personally predicts the bank will be offering more flexible rewards in the future.

 



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