Total Reward AEB Comp

1
Total Reward AEB CompBen Sub-committee
meeting27 April 2005

• Human Capital

2
Total Reward

• How to react to compensation pressures
• Raise compensation
• Change compensation so it is more valuable to the
  employee
• Increase the perception of what compensation is,
  or better still the value of working for you as
  an employer

3
Total Reward

• Everything that an employee gets out of working
  in a particular job is a factor in his evaluation
  of whether this is a good deal for him, and an
  adequate reward for his talent, experience and
  efforts.
• But.
• Unfortunately employees dont always see it like
  that.

4
Elements of Total Reward - Traditional

• Cash Compensation
• Base Salary
• Allowances
• Variable Pay / Bonus
• Long Term Incentive Plans (deferred bonus, Stock
  Options etc)
• Non-cash social benefits
• Medical Insurance
• Life and Disability Insurance
• Pension and Savings Plans
• Company Loans

5
Elements of Total Reward - Traditional

• Non-cash perquisites
• Mobile Phones
• Company cars
• Sponsored meals
• Sport clubs
• Sponsored vacation / incentive travel
• Business class travel
• Vacation above statutory norms

6
Elements of Total Reward Not in my
compensation package

• Other factors (non-monetary reward)
• Career prospects
• Fairness of evaluations recognition
• Responsibility independence - Empowerment
• Training development opportunities
• Working conditions
• Social activities
• Working atmosphere
• Company values ethics
• Work-Life balance
• Quality quantity of HR support ??

7
Maximising Value from HR spend

• Do we as employers sell ourselves short in terms
  of what we spend, and what employees see being
  spent on them?
• How could we, as HR, help our employers to
  maximise the perceived value of that spend by
  better communication?

8
Case study

• You are the HR manager of your company, which is
  a subsidiary within a multinational group. Your
  market research shows that average compensation
  is increasing by approximately 10 in your
  industry. However, upon returning form a
  European budgeting meeting, your General Director
  tells you that he has had a wage increase cap of
  7 imposed upon him by European Management.
• Your GD has therefore asked you to identify five
  areas in which HR can help maximise the value of
  working for your company, without increasing
  spending.
• You have been asked to come up with a short
  summary of a proposed annual plan to assist on
  each of these chosen areas.