Aon Hewitt's 7th Annual Rewards Conference Performance and Pay –
The Changing Curve
The Balancing Act
Sudhanshu
Tripathi
Group President Human
Resources Hinduja Group
Q. Given the current economic environment and the cost pressures, what do you think organizations can
do to maximize their compensation spend?
A. Whether we realize it or not, somewhere along the line, the size of the rewards pie is limited. Every time we
speak about differentiation, we are actually just tweaking the allocation, so that while the sigma of your total
spends is the same as budgeted; we are able to create something new. Therefore, innovation is required not only
around the obvious monetary and non monetary plans, but also in creation of long-term deferred incentive plans.
Q. What are the three top expectations that business leaders have from HR today?
A.There is a phrase that I use, purely at a board level, ‘they are not only looking for people to perform
well but they are also looking at organizational continuity in the leadership domain’. So, they expect HR to
support the environment and processes which engender and support leadership continuity and reduce the continuity
risk. That’s what they expect, at a cost which is optimum and creates social harmony and makes people feel
proud to be a part of the organization. Nobody will ask you to change the performance management system but they
will continuously ask you for the viability of the performance management system. Is it sustainable and
profitable?
Q. What would be the key focus areas for rewards professionals in 2014?
A. With the new government, there is a sense of optimism in the country today. The system and things on the
ground haven’t changed but there is a belief that they will. The increase in commitment is a precursor to
the change happening. Thus, very soon, expectations around compensation and rewards will rise and those challenges
will trickle in. There is a ‘reason to pay’, ‘willingness to pay’ but the most important
part in any compensation decision is the ‘ability to pay’. Hence, while 2015 looks like a positive
year, the businesses that are not performing well, their ‘ability to pay’ will not be altered
significantly. Hence, your ability to manage that will be a challenge that each C&B person should be geared
for. We, at Hinduja, are trying to raise expectations related to performance and create an incremental variable
pay plan where an additional bonus payout happens when there is additional revenue. So while the pay remains
within the budget, it creates an incentive and sense of optimism in the firm.
"Nobody will ask you to change the performance management system but they will
continuously ask you for the viability of the system."
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