Psyche reward plays crucial role in total rewards strategy

Need to customize rewards in line with employees’ need and organization’s culture
NEW DELHI, May 26, 2017: The biggest challenge for human resource professionals is to motivate, engage and encourage employees to deliver their best as the intellectual capital of an organization is the differentiating factor, said Mr.P.Dwarakanath, Director, Group Human Capital, Max India Limited, at a FICCI conference on human resources ‘Total Rewards Strategy Summit 2017 – Attract, Align, Accelerate’.
In his Keynote Address, Mr.Dwarakanath said that besides monetary rewards it is the psyche reward, which plays a crucial role in total rewards strategy. As the person goes higher up in the hierarchy, customizing rewards becomes essential, keeping in view the organization’s culture, level of employee and the capacity of the organization to pay. He added that rewards cannot be looked at in isolation.
Mr.Dwarakanath said that networking was an important activity for HR professionals. To be a leader, the HR professional had to cope up with technological advances and networking was essential in this process to understand the aspirations of the employees. He added that HR should be flexible and design total rewards strategy in line with employees’ need and
organization’s culture.
Dr.A Didar Singh, Secretary General, FICCI, said that with the advent of Industry 4.0, artificial intelligence and 3D printing, skills, people and human resource had been affected greatly. With increased automation, human interface was reducing resulting in loss of jobs. Therefore, the need was to develop a creative human resource which was productive and competitive. He added that workforce needed multiple skills and creativity to survive the advancement of technology and this called for a different matrix of reward strategy, which could remain sustainable in the changing scenario.
Dr.Singh said that the annual conference on HR practices will be organized in November 2017 during which compelling issues of HR conference 2017 will be deliberated amongst industry leaders, policy makers, academia and research institutes.
During the session, a survey report on ‘Reward Philosophies India – 2017 & Beyond’ prepared by FICCI in collaboration with Strat-Board was unveiled. The study reflects on core HR dilemmas with a view to share collective insights and trigger change for long lasting impact for organizations and individuals. It touches variety of niche aspects of total rewards including
structure & philosophy, performance pay, frontline compensation, gender pay parity, executive compensation, employee wellness, ESOPs, compensation benchmarking and key priorities for 2017 & beyond.
The results of the survey are a clear representation of the realities we face today and the evolution from here. Some key outcomes to note and act upon are as follows:
• Hierarchy/Levels still form the foundation for Total Reward structures however the new world of work may challenge the status quo - Organisations with pure dependence on Hierarchy/Grades may need to reconsider their Rewards framework and align it either to a standard/equal benefits philosophy across the organisation and/or a role based approach.
• Compensation remains a closely handled and individually delivered mandate (even for organisations with open cultures) - Individuals have little to no-clarity about where they stand commercially as compared to others in similar roles. It is pertinent to note that individuals now have access to a growing number of alternative market sources for comparison.
• Majority of the Organisations do not deploy reward-led long-term retention measures across the board - The focus remains largely limited to people in leadership/critical roles. With growing choices in the hands of the employee and a growing back-lash of attrition in most sectors, this may emerge as an important yet under-utilised aspect of retaining high performing
employees across the organisation.
• Variable pay and creating an inclusive Rewards culture remains an element of focus for most organisations – While majority of organisations yet struggling to find the right balance of variable pay opportunities specially for support staff, there is a clear indication to move towards a larger inclusive reward structure across the organization.
• The Bell-Curve divide continues to grow – A significant segment of the industry is looking for proven alternate methods and some are even experimenting with hybrid of existing methods.
• GPP (Gender Pay Parity) is yet to become a reality in most of the organizations - While a lot of conversations are happening on Gender Diversity & equality, majority of organisations are yet to start measuring it from the Total Rewards context.
• Most Corporates seem to not yet have a Joining/Committed Bonus policy - While most mentioned need to resort to the practice, organizations continue to deal with this in a controlled but ad hoc manner, more driven by approvals than policy.
• Hiring freshers at higher salary than to existing employees continues to be a challenge - Organizations are adopting various measures to address this concern.
• Organisations are now beginning to realise that salary reductions are a reality for continued Non-performance across the Board- Though a large segment yet ascribe it as more of a frontline suitable alternative, some organizations seem to realise it as a cultural notion which needs to be challenged, but a nearly equal number would not prefer to resort to this.
• There is dichotomy in approach when it comes to dealing with false tax claims – Most organisations tend to not deploy punitive/disciplinary measures to counter the same (unlike false reimbursement claims). Tax friendly pay structures continue to trigger this concern, and organisations and employees may face larger risks due to inadequacy of right measures.
• While all organisations seem to be aligned on driving Employee Wellness - This is yet an ad hoc aspect for many and remains a ‘good to do’ vs. ‘really a need to do’ element - The ROI or direct impact of wellness on Business and /or People strategy yet remains unknown to most.