Thai priorities differ from those in other countries
Getting their employees' performance back on track tops the list of concerns among Thai companies, according to a survey conducted by Watson Wyatt Worldwide, a consulting firm.
The result in Thailand was different to other Asia-Pacific countries with a majority of them citing controlling costs as the most challenging issue, said Andrew Heard, Asia-Pacific benefits practice director of the company.
"Thailand has been in economic difficulties before other countries in the region. So, cost control has been an issue it has been dealing with [for some time]. Our research shows employee engagement has slipped, especially among high performers. Given Thailand has been in this situation longer, it is not a surprise that Thai companies focus on how to get their performances back on track," he said.
The "employee benefits trends" survey was conducted by Watson Wyatt across 12 countries in Asia-Pacific during June and July 2009. The top three human-resource challenges faced by companies, according to the survey, were similar across countries - controlling cost was the biggest concern; followed by attraction and retention; and performance management. However, in China and Vietnam, attraction and retention were the biggest challenge, while in Thailand, performance management was the No 1 concern.
Bubphawadee Owararinth, managing director of Watson Wyatt (Thailand), said Thai companies had used key performance indicators (KPIs) and other systems in place as with other countries, to align performances of employees to their compensations and rewards, but the evaluation matrix had not been implemented effectively since few Thai bosses would like to be perceived as being "unkind".
"I used to conduct a project for a customer company. Their boss was very kind. Everyone's performance) was [measured as] good. However, there was no money to pay [the employees]. This implied the performance was not that good, rather the boss was kind," she said.
Bubphawadee urged Thai companies to adopt a pay strategy which distinguishes clearly the total rewards to high performers against the low performers.
"You must create a contrast between high performers and low performers [in your pay policy], otherwise why would they work so hard?" she said.
Staff must be informed clearly on the pay policy while managers and supervisors have to maintain continuous dialogue and provide coaching or counselling to their subordinates, rather than keeping them in the dark until they see their rewards arrive at their annual salary or bonus adjustment, said Bubphawadee.
"Not just having the KPIs, but what they will get if they do [perform well]. There must be both money and non-monetary rewards such as [free] air tickets, or other recognitions. Sometime, you offer a 'spot reward', giving it right away, instead of waiting until the year-end [bonus payment]," she said.
Meanwhile, Heard said employee benefits were a hot issue in the US because of the financial crisis and a rapid rise of social healthcare costs. Nonetheless, benefits have increasingly become a cause of concern in Asia-Pacific as well: more than 40 per cent of organisations taking part in the survey spend more than 20 per cent of their payrolls on benefit cost, he said.
"And the benefit cost is rising at about 20 per cent per annum, while salary cost has a zero growth or grow by a few percentage points" said Heard.
With benefit costs expected to keep growing in double digits, particularly medical costs continuing to rise, Heard suggested some simple steps for organisations:
Firstly, review your benefits strategy. This was particularly relevant in Thailand which has rising healthcare cost and aging workforce, he said.
Secondly, invest in communication programmes. Despite the rapid rise of benefits cost, the survey shows a large number of employees still don't understand or fully value their benefits programmes.
Adopt a flexible benefit programme that allows employee to choose benefits which they value the most.
"In the short term, salary will still increase by a single digit in Thailand, but we expect benefit costs to continue to rise by a double digit rate. So this issue is important," Heard said.
At present, 30 per cent of firms in the Asia-Pacific are implementing or considering applying flexible benefit programmes, the survey found, but the trend was on the rise, he said.
Bubphawadee said Watson Wyatt (Thailand) embarked on the flexible benefit scheme this year and the staff was very happy with it because they could choose ones that were suited to their lifestyles. Among the benefits that employee can select are travel or spa packages, apparel, fitness package and gadgets.
"Everything can be traded. Leave days can be traded but we cap it at two days, because we'd like to keep the work and life balance of our staff," she said.
Heard said throughout the world, there was a strong trend toward wellness programmes because companies would like to escape the hefty medical bills problem currently faced by US companies. Another trend was to have employees sharing the benefit costs paid by their firms.