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Published on February 14, 2008

Released by Hewitt Associates, a global personnel services company, the report stated that, given the changing nature of Asian talent, compensation was becoming more important to modern employees. In order to come out a winner in a competitive market, organisations have to create innovative compensation strategies to attract, motivate and retain high-quality talent.

Nishchae Suri, principal at Hewitt Associates, said: "Asian talent has unprecedented ambitions of fast-track growth and the willingness to work for it. Sustaining satisfaction is a huge challenge, as companies report increasing difficulty in keeping employees happy through compensation alone.

"The success of compensation programmes in the future will depend on whether organisations are ready to take 'bold bets' that include personalising compensation and communication for employees, focusing on differentiating pay for high performers, and developing the means to calculate returns on the compensation investment."

Traditional one-size-fits-all compensation programmes are not expected to work in the next generation of talent management. A workforce that is in short supply, empowered to switch jobs and is more demographically and lifestyle diverse, will require, and in many cases demand, that organisations take more than one approach to compensation.

In the next generation of talent management, organisations will use consumer marketing technologies to customise reward packages. Through personalised Web portals, organisations will offer compensation menus that are tailored to both groups of workers and individuals. Options offered will go beyond the traditional flexible benefits fare to include choice in work assignments and location, time and money for training and working-time flexibility.

 "Organisations will increasingly offer workers customised rewards menus, giving employees their total cost of remuneration and allowing them to design the specifics of their rewards packages. Going even further, they might even let employees determine their own compensation levels and keep compensation amounts in check by providing detailed financial information upon which employees will be encouraged to base their salaries," Suri said.

Similarly, employee communications will also be customised in the next generation of talent management. In addition, with the aid of technology, organisations will gather worker information and use it to create communications that resonate with specific groups or individual needs.

Rather than sending a generic mail to all employees, organisations will increasingly use employee segmentation technologies to target communications for groups of employees based on different factors, such as an interest in saving or years until retirement.

Increasingly, companies will "differentiate" among their best and worst performers in visible, dramatic ways to motivate top talent to deliver excellence. One of the most valued modes of showing appreciation will be through pay. The other most valued type of reward will be recognition in the form of praise or certificates, privileges, special projects or training, and promotions.

Organisations will develop a compensation strategy that catches top performers' attention and sends a signal to mediocre performers, establishing well-defined rules for performance that make

 

clear how the rewards are gained, challenge the entitlement mentality, and optimise the organisation's compensation investment by using variable pay incentives instead of focusing on base-pay increases.

"This, of course, does not mean that organisations will neglect their medium performers, a group that forms the bulk of the employee population. Organisations will adopt a more inclusive approach to pay - rewarding top performance through higher pay and encouraging medium performers by linking their performance objectives to higher stakes," Suri said.

The Nation