Talent Management - January 2009 - (Page 25)

that are truly valued by a diverse workforce will ultimately do more to position the organization as an employer-of-choice. Successful talent managers must be able to create a motivating environment that will drive employee performance. If an employee does not have line of sight to the performance goal or ﬁnd the reward valuable, it serves no purpose and may even be counterproductive. Talent managers also must build value in the rewards package, and this only works if they understand what is of value to an employee and how they can tailor a package or the communication around said package to be the most impactful. Some may say this is “spin;” others may call it “targeted communication.” But at the core, it’s about helping employees realize the holistic value offered to them and using that to motivate performance and retain productive employees. Building Value Beyond Pay In most organizations today, a full buffet of total rewards options is available beyond the standard pay and beneﬁts programs. Which combination will be the most effective at attracting, motivating and retaining talent? That comes down to whether the individual organization can ﬁnd the right programs that will be of most value to employees. Flexibility-based programs such as telecommuting are particularly valuable to employees because of the relief from high transportation costs, as well as the work-life effectiveness they gain. Survey data shows a major growth in the use of ﬂexible scheduling options Paying for Performance Employees often expect pay increases and/or bonuses, whether it’s because an organization awards them every year regardless of performance, or because an employee believes they should get a raise when their expenses are rising out of their control. Talent managers today are challenged with shifting the employee to where they understand they must earn their rewards, assuming that is a philosophy shared by the employer. The average U.S. organization awarded at least some base salary increase to roughly 91 percent of all employees in 2008, consistent with recent years. A review of 2007 shows organizations averaged a payout of 3.6 percent for middle performers, with top performers receiving more than 5 percent. (See Figure 2.) For now, organizations are able to ﬁnd and keep the employees they need with a broad total rewards package that includes moderate pay increases. — 40 percent more organizations have telecommuting/teleworking programs compared to a year ago. And more than half of all organizations now offer ﬂextime so employees can adjust work hours to minimize commutes and provide new opportunities to rideshare or use other forms of public transportation. Flexibility in how, when and where work gets done is becoming a staple element of the total rewards package. Employers that do not provide these programs will soon ﬁnd it very difﬁcult to compete for talent in an environment in which employees demand it. Survey results also show organizations are continuing to offer a variety of bonus programs. Most notably, sign-on and employee referral bonuses are used by about seven in 10 organizations. (See Figure 3.) Market pay adjustments to keep certain jobs or job families competitive still are prevalent, supporting the salarybudget-increase ﬁndings. The future of the economy is unpredictable. Some say it will get worse before it gets better. Others estimate a recovery is close at hand. What is clear is that organizations are well-positioned to continue awarding pay increases, to differentiate rewards by performance and to offer a varied and complete total rewards package to attract and retain talent in a tough economy. Talent managers will play a key role in helping employees see the real value behind total rewards packages as employers leverage their many tools. Alison Avalos, CCP CBP GRP leads the surveys and research , , , team at WorldatWork. She is a former HR practitioner. She can be reached at editor@talentmgt.com. These ﬁndings support the idea that pay increases have a higher return to the organization if they are meritbased and that most organizations, even with salary budgets growing at a moderate pace, are trying to differentiate rewards based on performance. When an organization needs to conserve cash or use rewards that will motivate speciﬁc performances year over year, variable pay — or at-risk rewards — work more effectively than base pay increases. Variable pay programs help companies pay competitively while controlling staff costs if performance does not meet expectations for any reason. In 2008, the percentage of organizations using variable pay incentives and bonuses increased slightly to 81 percent, continuing the upward trend. As would be expected, the struggling economy may affect the size of payouts from these programs this year. While more organizations are using variable pay programs each year, employers are expecting to deliver slightly lower payouts in 2009 due to less robust performance. January 2009 talent management magazine www.talentmgt.com 25 http://www.talentmgt.com

Table of Contents Feed for the Digital Edition of Talent Management - January 2009

Talent Management - January 2009 Editor’s Letter Contents Human Performance Leading Edge Learning Connections Integrate Web 2.0 Into the On-Boarding Experience Show ’Em the Money: Compensation Trends 2009 Transition at the Top How Hollywood Manages Talent and What You Can Learn Get the Most Bang With Limited Training Bucks Life After Layoffs Attract Specific Talent Groups Performance Management: Its Time Is Now Helping the Helpers Advertisers’ Index Editorial Resources Full Potential

Talent Management - January 2009

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