India

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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