compensation & benefits: tom dewaele
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War for Talent
What do we want to pay for it?
Tom Dewaele
Reward Europe
June 2011
1
War for Talent is a fact!
2
War for Talent is a fact!
4
War for Talent is a fact!
5
What is a talent?
6
Ultimately, any organization’s performance
depends on its decision effectiveness.
Consistently
high performers
make good decisions
make them quickly
and execute them well.
War for Talent is a fact!
7
Reward & Talent together!
8
We need to
get/keep this
hughe talent in
whatever the
price may be
Sorry but this
will definitely
not fit our
reward policy
Talent Management Reward Management
Reward approach for talent
• One size fits all policies
• “Overall Average median positon in the total market”
• Very limited salary increases budgets
• Managing exceptions/police department
• Pay for (short-term) performance
We need much more flexibility in our
reward programms to attract and
retain our best talents
Talent Mgt Language
Consistently
demonstrates
outstanding
leadership
Consistently
demonstrates
leadership at the
expected level
Does not
demonstrate
leadership at the
expected level.
Fails to meet stretching
performance targets.
Consistently meets stretching
performance targets.
Consistently exceeds stretching
performance targets.
Reward Mgt Language
Media
n
80%
125%
90%
110%
Year 1 Year 2 Year 3 Year 4 Year 5 Base Variable Benefits
Base pay flexibility
Median
80%
125%
90%
110%
Year 1 Year 2 Year 3 Year 4 Year 5
Middle boxer
Green boxer
Yellow boxer
Red boxer
Key Jobs
Mid Career Recruit
STI: Pay for performance
• Strong differentiation tool
• Link to business results
• Link to individual targets
•
Different approaches possible!
Pay for performance: rigid
Team Company Individual
Entity SOTP IndividualKPIs
0-160%
X X
0-100% 0-100%
Pay for performance: rigid
• Simple
• Predictable
• Business link
• Performance driver
• Individual overperformance
• Management judgement
• Declining markets
• Zero bonus years
• Future Potential
Pay for performance: open
Target
Business Performance = Differentiation Factor
Individual
Performance =
PDP Rating
€ Bonus
€ Bonus
1 2 4 5 3
Business Performance
is relative
Individual Performance
is relative 16
17
Pay for performance: open
Pay for performance
• Management judgement
• Individual overperformance
• Reflecting business results
• Highering approach
• Future Potential
• Too complex
• Too flexible
• Management behavior
• Unpredictable
•
LTI: long term retention
Consistently exceeds
stretching performance
targets.
Consistently meets
stretching performance
targets.
Fails to meet stretching
performance targets.
WHAT
Consistently
demonstrates
outstanding
leadership
Consistently
demonstrates
leadership at the
expected level
Does not demonstrate
leadership at the
expected level.
HO
W
25 - 50% LTI 100 - 150% LTI 150 - 200% LTI
0 - 25% LTI 75 - 100% LTI 125 - 175% LTI
0% LTI 0 - 50% LTI 25 - 75% LTI
Total Reward positioning
Q4
Q3
Q2
Q1
Questions?
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