Business leaders reflect upon salaries, benefits

While salaries and benefits are certainly important factors in attracting and retaining talented employees, the workplace environment and culture are crucial.

So said Standard Chartered Bank (Thai)'s senior executive vice president and head of human resources Bubphawadee Owararinth, when speaking at the "Strategic Compensation, Rewards and Recognition Summit 2011", held by the OmegaWorldClass Research Institute.

"Workplace environment and culture are very important [factors] because they concern the hearts [of employees]," Bubphawadee said.

"The concept of [staff] engagement originated from Japanese companies. Employees spent lifetime careers with these firms, even though there was not much difference in their salaries. Staff stayed because they felt honoured and were treated well by their employers," she said.

The workplace environment, meanwhile, hinges very much on the company's leaders. They need to be trusted by their subordinates, understand the "people" aspects of leadership, be capable of coaching, recognise individual employees, practice two-way communication, assign exciting projects and develop career growth and opportunities for their staff, she said.

Managers and supervisors should not wait to recognise staff who are doing good things for their companies.

"Give something right away when staff do good things. It doesn't need to be a big amount of money. You can give them shopping [benefits], MK or Starbucks vouchers, whatever.

"New-generation staff, in particular, will not wait to be recognised. We know that some people like watches, so we hand them a cool watch," Bubphawadee said.

Companies should also consider offering flexible employee-benefits programmes that allow their staff to choose benefit packages that are suitable to their needs and lifestyles. For example, single workers may prefer travel benefits, married staff may prefer support on a housing loan, and older employees may opt for health packages, she said.

However, human-resources consultant Atikom Kiattivorakan told the seminar that flexible benefit programmes were not popular in Thailand because the Excise Department taxed every item as part of employees' remuneration, and few staff liked to pay more taxes.

Bubphawadee also suggested that firms should consider using referral programmes to attract talented staff. Standard Chartered had found that its "Bring Your Buddy" programme, in which its staff helped to find new talent for the bank and got paid for it, worked effectively in luring talented employees and reduced the cost of hiring external headhunters. Nearly half of the bank's newly recruited staff have been found through this channel, she said.

Recruitment referral seems to be a trend in the United States as well, according to Banpu's senior vice president Varoj Limjaroon.

He said that at the recent American Society for Training and Development Conference 2011, in Orlando, Florida, the APM Group organised a session for Thai company executives at which researchers revealed that many high-performance organisations were using employee-referral rates as a measure of performance. Other indicators they used included analysing the results of feedback given by supervisors to their subordinates, and the "cycle time" used by staff to fill their competency gaps.

"Referral programmes have been found to be a key for attracting talented [staff]," Varoj said.

Meanwhile, Standard Chartered's Bubphawadee also spoke about the impression she gained when her boss, the bank's president and chief executive Lyn Kok, surprised her with a warmly welcoming and friendly e-mail on her first day at work. The message ended with the words "Keep Smiling."

She said Standard Chartered gave high importance to its people, and at its executive board meetings, she would be asked, as the HR executive, to speak first.

Chevron Thailand Exploration and Production's human resources manager Nutavoot Pongsiri told the seminar that firms usually rewarded their staff for their performance regardless of their leadership capabilities, whereas in today's business environment, leadership qualities determined an employee's achievements more than any other factor.

In determining remuneration, Nutavoot said firms should consider both "internal and external equity" factors.

"Staff often compare themselves to other people - both internally and within other organisations. A survey by Oxford [University] found that people would be dissatisfied if they received eight pounds while others were getting 10 pounds. They would be more satisfied if they got just five pounds, as long as there was nobody else getting the money."

Nutavoot said smaller firms had an advantage over their bigger rivals because there wasn't much need for remuneration decisions to hinge on standardisation and harmonisation issues. Thus, they could differentiate their pay offers to lure talented staff.

He said that in some exceptional cases, such as in hiring drilling engineers and other hard-to-find professionals, Chevron had come up with a so-called "retention premium", paid to an employee only if he or she completed three years with the firm, or once every year.

Nutavoot also suggested that firms give "customised benefits" instead of providing the same benefit package to every staff member. Chevron, for instance, has begun offering scholarships to selected staff who show loyalty and who value the benefits more than others did in the past when the scholarships were given to everybody.

Nutavoot said he was puzzled by how universities, which spent no money to do so, were able to keep their students engaged with them and left them feeling proud of their institutions even after they graduated.

In retaining employees, the Chevron executive suggested that firms learn from the "networking effect", with which e-mail and social-networking websites are able to retain their members because they do not want to lose touch with friends and start anew.

pichaya@nationgroup.com