Compensation Insider January 2012 posts

Compensation Insider - January 2012 posts
Compensation and Benefits with a Middle East flair - http://compensationinsider.com

Compensation Insider
Posts published in January 2012

page 1 / 28


Table Of Contents

Fresh professional goals for 2012 as a Compensation leader ......................... 3
Compensation aspects of HR trends for 2012 .................................... 5
What are the benefits of a good Performance Management System ? ................... 7
Merit increase or bonus, how do you reward performance ? ......................... 9
Why am I not on the Sales Incentive Plan ? .................................... 11
Of average salaries in Europe ............................................. 13
Is pay the main component of employee engagement at Fortune 100 Best Places to Work For ? 14
..
Remuneration, engagement and the GCC employee .............................. 16
The limits of Emiratisation quotas .......................................... 18
GCC Nationals pay : a lesson from the Y2K bug ................................ 20
Create the best rules in Outlook to boost your productivity ......................... 23
Get laser-focused Compensation information with Alerts .......................... 24
Share the knowledge - January 2012 ........................................ 26

page 2 / 28


Fresh professional goals for 2012 as a Compensation leader
http://compensationinsider.com/fresh-professional-goals-for-2012-as-a-compensation-leader/

I don't do New Year resolutions any longer.

I used to go through the ritual in the past, but my motivation, like for many people, never lasted long.
After a few weeks or even a few days, I was back to my past behaviour and never gave these resolutions
another look back... until the end of the year and making the same resolutions again.

Thankfully, a few years back, I discovered a book that really helped me to move my life forward. Your
Best Year Yet, by Jinny Ditzler, describes a 10-question approach to setting life goals every year. After
analysing your achievements and disappointments over the past 12 months and learning from them, you
set goals for each role you play in your life and select your Top Ten Goals for the year. You eventually go
through a system to work on each goal you have set up every month and every week. The objective is to
keep balance in your life and never forget any side of it, so that you feel complete and moving forward in
every aspect.

Even though I never fully manage to completely achieve all Top Ten Goals (but I do accomplish many of
all the goals for each role), I achieve a lot more in my life every year thanks to the thorough upfront
thinking involved in the process. Why ? Because the deep reflection and analysis helps me focus on what
really matters to me as an individual, not on what I think I should aim for - therefore making it easy to be
committed to these objectives because I own them truly.

This monthly section of my blog is about career management, yet the Best Year Yet method is larger than
just work, and encompasses your whole life. However, given the balance that it helps maintain in life, this
method has a direct and positive impact on your professional achievements.

The approach I take to my professional role in this methodology has always been quite different to the
goal-setting methods I use for defining my annual objectives through the performance management
system in place at my company.

Indeed, through Best Year Yet, I focus on what matters to me as a person from a professional standpoint.
Sometimes, it overlaps with the objectives and projects that will define my daily activities at work. But
Best Year Yet helps me mostly to remember the real value adding elements of my professional life.

So let me share with you some of my goals in my "Head of" role for 2012. Even if you don't go through
this method, some of these objectives may resonate with you. Please feel free to adopt and adapt any of
these as you see fit.

As a team leader and expert in Performance and Rewards, I intend to :

Continue to grow my team through formal certification, stretching objectives, coaching them myself,
and making them teach one another.
Implement processes and tools to make life easier and faster for us and for the HR community and

page 3 / 28


the business, even if it takes us initially more time to develop these tools.
Focus all our approaches through the lens of client service.
Make time for me to maintain and evolve our vision and strategy, to support my team, and to
develop and cultivate relationships with all our stakeholders.
Focus on value-adding activities at my level, and improve my technical and managerial skills.
Continue asking questions, challenge the status quo and strive to introduce new ideas and concepts
into my professional life.

Do you think these goals make sense ? And what about you ? Do you use a goal-setting method ? Go on,
you know you want to share your goals as it will help increase your commitment ! Simply use the
comments section :-)

Related post :

Socialise your Compensation & Benefits annual business plan

_______________________________________________

page 4 / 28


Compensation aspects of HR trends for 2012
http://compensationinsider.com/compensation-aspects-of-hr-trends-for-2012/

Future Insights is a recently published report looking into "the top trends for 2012 according to SHRM’s
HR subject matter expert panels". Even though SHRM, the Society for Human Resource Management, is
an HR trade association based mostly in the USA, I found some of the trends to be interesting also at an
international level.

Among other topics, the report covers Corporate Social Responsibility and Sustainability, Ethics, Global
HR, Human Capital Measurement/HR Metrics, Technology and HR Management, Total
Rewards/Compensation and Benefits and Workplace Diversity and Inclusion.

As per the report, some overlapping trends touch on :

the impact of the global crisis on budgets, HR strategy and hiring,
an emphasis on measurement of results and the development and standardization of key HR metrics
to justify HR budgets and expenditures
and globalization and market interdependence leading to greater volatility.

Here are some aspects relevant for Compensation managers in the GCC :

The development of performance management approaches, with a focus on implementing continuous
cycles of goal setting, performance feedback and evaluation throughout the year.

Consequently, pay-for-performance approaches also develop, especially as they help recognise and
retain the best employees and control costs, still a very important aspect of managing organisations in
today’s “jobless recovery” and still uncertain financial future.

Companies also increasingly pay attention to the non-cash elements of their total rewards,
especially career development and recognition schemes, as they help to retain the best employees and
maintain or restore engagement levels of the staff. This is material given that the crisis and its layoffs,
followed by “more work with fewer resources” for the survivors, have induced high levels of discontent
amongst the workforce and productivity and success are therefore threatened.

HR Systems and business intelligence become more and more expected in order to help drive the
business and make informed, relevant decisions about people allocation and the value of the company’s
human capital.

This has an impact on the skills required of the HR population, which needs to become more
technology-savvy and to demonstrate improved business acumen and quantitative skills.

The other aspect of HR System focuses on measuring more accurately the results and value of HR
through good analytics. These KPIs and tracking abilities also apply in the decision-making process
related to HR budgets and funding requests.

page 5 / 28


While some sections of the report are clearly focused on the USA and their domestic trends, the full
report is a quick and easy read that emphasizes many interesting aspects of what HR in general will face
in 2012 and the coming years. I recommend you read it and try to evaluate how some of these trends
could apply to you and your organisation.

Liked this post ? Why don’t you share it on LinkedIn or Facebook ? Simply click on the link below and
help your friends and connections benefit from it too !

_______________________________________________

page 6 / 28


What are the benefits of a good Performance Management System
?
http://compensationinsider.com/what-are-the-benefits-of-a-good-performance-management-system/

You are trying to convince Top Management to redesign the Performance Management System at your
organisation, because the existing one is not producing the desired results and has lost its shine
internally.What are the benefits of a good Performance Management System ?

Here are some of the positive outcomes you can describe to the Executive Leadership Team as the
introduction to the changes you want to introduce.

Benefits of a good Performance Management System for employees

More motivation to perform
If feedback is delivered properly and a genuine opportunity for improvement is given, the
self-confidence of the employee can raise
The job is defined more clearly and expectations are clear, providing the required direction and
aligning with the strategic goals of the company
Development opportunities

Positive Outcomes of a good Performance Management System for the manager

Better knowledge of her team members
Increased team and individual productivity/performance
Prevention of larger issues through an on-gong discussion around performance (on-going feedback)

Benefits of a good Performance Management System for the company

The strategy and company goals are better communicated, understood, and acceptedEfforts are
aligned in the direction of the achievement of the strategic goals.
If there is a link to pay, the increase and/or bonus budget will be spent on a fairer basis, will be more
credible, and should yield better returns in terms of recognition / motivation aspects.
The content of the appraisals will help do the manpower planning and adapt the training plan to the
needs expressed to perform well in the job.

Of course, all these positive aspects will only happen if the system which is put in place :

is aligned with the company strategy
fits with the company culture
is supported by the top management (through leadership by example)
is an on-going process, not a once-a-year administrative event
is not "stand-alone" but well integrated with other people management processes and managerial

page 7 / 28


activities.

In short, a good Performance Management system has the objective, and potential, to increase the
performance of the organisation through that of its members. You need to make sure it is supported by the
management, aligned with its culture, and becomes an on-going people management activity for it to
deliver all its potential benefits.

Related posts :

The Formula One effect on performance management

How do you link performance management and a performance-driven culture ?

Calibration of employee ratings - a rigid rule ?

Enjoyed this post ? Why don’t you subscribe by email to make sure you receive my articles 3 times per
week ?

_______________________________________________

page 8 / 28


Merit increase or bonus, how do you reward performance ?
http://compensationinsider.com/merit-increase-or-bonus-how-do-you-reward-performance/

Welcome back to Compensation Insider ! I wish you an excellent year 2012 and hope you will be visiting
my site regularly :-)

Given we are at the beginning of the year and most HR and Compensation experts are about to go
through salary reviews and bonus payments, I thought it would be relevant to share an answer I gave 2
years ago to my friend Wael. To further clarify his question, he explained : "High inflation as well as
increasing competition for talents necessitate annual salary reviews/ increases. For these we need a
regional and international benchmark. But how about star employees rewards? What is a good practice to
reward them, in addition to salary review for all others, without jeopardizing the profit margin?" You will
find all 18 answers here, and here is the one I gave - I still go for it 100% :

Rewarding performance comes in many different forms and you need to have a comprehensive system in
place.

1. Base pay increase

It covers market movement and maintaining the company’s competitiveness in attracting the right
talents. It can also cover “inflation” (though this approach has a lot of long-term costs linked to
expectations of salary increase even when the company/employee is not necessarily doing well).

Hence there is the need to benchmark to market, and define clearly the position that fits your company’s
strategy : to pay below, at or above market. Each approach has its merits and disadvantages.

Base pay increase can also come as recognition for past performance combined with appreciation for
future potential, in the form of promotion. But in general, I don’t believe that base pay increase should
reward solely the performance related to achieving the year’s objectives.

2. PLUS Bonus

If you decide to pay one, especially to reward your star performers, there are a number of things that are
to be considered.

A discretionary bonus may give the manager a feeling of control over the team members because he/she
decides the payment, yet in reality this does not foster performance or collaboration. The truth is, people
need line of sight : they need to understand how their actions can influence the company results /
performance.

It is also important to have a least a good part of the objectives quantified and clarified at the
beginning of the performance evaluation cycle so that there is a clear alignment between the company’s
objectives and what employees will strive to achieve.

page 9 / 28


Then, describing how this will translate into a financial reward for the employees is also important.
And finally, you need to ensure that the evaluation process is fair, so that the payments are perceived a
equitable, and you need to communicate thoroughly.

A bonus should never be considered a diminution of profit or a risk for your profit margin. A good
rewards system will be designed to take into account its related costs from the onset, therefore adapting
the simulations to include both fixed and variable personnel costs (this means you need to have the
proper HRIS and financial systems in place for cost simulations).

You can design systems where the pool of money to be distributed is linked to the profit, and thereafter
distributed on the basis of individual or team performance so that your stars, even in a period of economic
duress, are still rewarded – otherwise, as soon as the economy picks up, you will see a brain drain…

3. PLUS Recognition systems

You can implement other elements that will allow you to reward “on the spot” when great results are
achieved, whether at the individual or team level. This goes from the simple, free stuff just like saying
“thank you and congratulations” in private or in public, to full-scale stock option awards, through one-off
payments or gift vouchers etc….

The most important element there is being able to react quickly and not wait until the end of the year… at
which point it is too late for the recognition to have its expected motivational / morale boost effect.

week ?

Related posts :

What to consider for salary planning ?
How to decide how many promotions to grant each year
The best order in which to apply salary increases in any organisation
How do you link performance management and a performance-driven culture ?

_______________________________________________

page 10 / 28


Why am I not on the Sales Incentive Plan ?
http://compensationinsider.com/why-am-i-not-on-the-sales-incentive-plan/

When I was working in the IT industry, there was a lot of talk about the sales population. Obviously, their
success was central to that of the organisation, and given the complexity of the products and solutions, the
scale of some of the contracts, and the competition in the marketplace, my employers were looking at
every angle when trying to keep the salesforce engaged, motivated and performing.

All sections of HR were involved, and Compensation & Benefits played its part obviously. We were
checking many elements, from the types of objectives to be set to the calculation mechanisms and the
consistency of the payment cycle with the sales cycle. Given the high ratios of variable pay to fixed pay
in the industry, and the also high multipliers in case of overachievement, the potential total pay was
significantly higher than the guaranteed, monthly pay.

So one of the most regular topics of discussion was : " Who should be eligible to the Sales Incentive Plan
?". Many parts of the organisation were trying to be enrolled in the SIP, or at least to a "light" version of it
where the on-target bonus was higher than the regular, corporate bonus. Marketing, pre-sales support,
on-site/maintenance ntechnicians, phone and internet customer service reps, even sometimes the Finance
team in charge of calculating the quota achievement.... They all, at some point, tried and/or managed to
get enrolled in some form of SIP.

The criteria we used were simple yet effective :

Look at the specific role not the whole job family and ensure the job description has been vetted by
the top management
Is the role directly responsible for generating revenue (closing sales contracts) ?
Is the role the main decision-maker in the sales negotiation cycle with the client ?
What is the % of time spent by the role on revenue-generating activities ?
Can we track or measure the revenue generated by theat specific role ?

Put together in some form of decision-tree, the answers to these questions helped us determine whether
the role was considered a direct or indirect sales position (or not at all), and the ratio of fixed and variable
pay. It allowed us to decide whether Product Marketing, for instance, would be eligible to some form of
sales incentive. In some companies yes, in some companies no. It depends on your structure, strategy and
culture.

Whenever you design an incentive, putting in place some criteria to determine eligibility will help you not
only design the incentive, but also communicate about it, and maintain control about who gets what. Try
to also discuss these criteria with other constituents as you may get some very relevant feedback, and will
also come out with some ideas of the questions that employees and managers will ask... and the answers
you can give them.

page 11 / 28



Related post :

Analyse my SIP !

_______________________________________________

page 12 / 28


Of average salaries in Europe
http://compensationinsider.com/of-average-salaries-in-europe/

A while ago, a Sales Director asked for "an average salary for a sales/account manager in IT company
selling specialty software within Europe".

I wish it were that simple but there is no such thing as a "salary in Europe". For the same job, each
country will pay different salaries.

Salaries are normally always expressed as gross salary ie before social security deductions (healthcare,
pension, long-term disability, unemployment insurance...) and tax deductions. Depending on the country,
income taxes are deducted directly through the payslip (eg UK) or are submitted individually by the
employee (eg France).

If you get some numbers in reply to this kind of question, I advise you to check the reliability of the
source. Best to get info from survey providers... but usually this info is only available to the companies
who participate in their (paying) compensation survey. And if the source is reliable, then you will have to
take into account cost-of-living differences in order to estimate what spending power this would give you
compared to salaries in your current country of work.

As far as variable pay, you should consider not the value of the bonus (ie the actual pay... but it is linked
to individual performance in sales positions) but the amount of the on-target bonus ie which amount or %
of salary does this sales/account manager receive if he/she reaches all targets at 100%.

Variable pay will depend a lot on how the company is structured : is it through account "ownership" or
through the management of all accounts within a specific geography or by type of customer (eg : by
company size or industry)... It will also depend on whether the job is held by an individual contributor or
by a team leader / people manager.

Hopefully this bit of methodology will help you navigate through any data you receive to this wide
question, if you ever get any.

week ?

_______________________________________________

page 13 / 28


Is pay the main component of employee engagement at Fortune
100 Best Places to Work For ?
http://compensationinsider.com/is-pay-the-main-component-of-employee-engagement-at-fortune-100-bes
t-places-to-work-for/

Last week, Fortune published its famed annual ranking of 100 Best Places to Work For with this
introductory comment :

"Fat paychecks, sweet perks, fun colleagues, and over 70,000 jobs ready to be filled -- these employers
offer dream workplaces. Like Google, which reclaims the top spot this year to become a three-time
champion."

Here is the top 5 list of Best Places toWork For in 2012 in the US :

1. Google
2. Boston Consuting Group
3. SAS Institute
4. Wegmans Food Markets
5. Edward Jones

It is interesting to note that 4 of them are in trendy high tech / professional services firms, with only one
in the retail industry (and family-owned, too).

Google is famous for its perks : the free food, extensive fitness equipment and parks, unconventional
working environment (the latest craze is the made-to-measure standing desks), massages etc.

SiliconValley.com has a very relevant article on the topic, trying to ascertain whether the focus on
employee well-being makes the company successful, or whether it is possible to focus on this well-being
thanks to the company success. Classic chicken and egg debate :-).

One comment they add is :

But that's not to say Google, despite all the workplace benefits, is nirvana. It can be a pressurized place
to work, even with micro-kitchens stocked with free food.

"It's not about bringing these perks to work, and you work a 40-hour week" at Google, said Charlene Li,
founder of Altimeter Group. "It's that you have all these perks that enable you to work much more than 40
hours a week."

It is very true. Years ago, I was a Compensation consultant for Microsoft, covering the EMEA region.
The pay was nice, the benefits were excellent, and the location was nice too. In every major country of
operation, being in the top 10 Best Places nationally was one of the major annual goals of the HR
Director, as well as of the Country General Manager. That's how seriously this was for the company.

page 14 / 28


What better way could there be to make the organisation focus on the well-being of its employees through
holistic, comprehensive approaches that were supported by the top management ? The results were great.
Working there was truly a transformative experience, for the working conditions, for the quality of the
people working around you, for the exciting and challenging, make-you-grow assignments... and yes, for
the pay and benefits too, even though they were not the main driver for the motivation and engagement
that most of us felt every day.

Why did the company do that ? Well, there really was a philosophy of caring for the employees. But at
the same time, we all had access to the offices 24/7. We were expected to deliver results, no matter how
much time it took. I regularly finished at 11pm and worked at weekends. Yet I never resented it, it was
part of the "deal", a compromise made in exchange for being in such a stimulating environment, feeling I
was making a difference to the lives of my coworkers.

So yes, the great Places to Work For offer a superb environment. They offer stimulating work with smart
and interesting colleagues. They offer "fat pay checks" and "sweet perks". But as I have experienced, the
latter are not what makes people engaged and motivated there.

So next time your top management tells you to increase pay or allowances, or provide better healthcare in
a bid to reduce attrition and improve productivity, well... go for it - but make sure to point out that
integrated approaches focusing on the total employee experience will make a bigger difference. Look for
your overall Employee Value Proposition, building a culture of trust and openness, and providing
challenges and growth opportunities.

... And by the way, don't forget to check the 12 unusual perks listed from the Top 100 list - some fun
ideas in there !

Related posts :

Remuneration, engagement and the GCC employee

_______________________________________________

page 15 / 28


http://compensationinsider.com/remuneration-engagement-and-the-gcc-employee/

Recent reports have drawn attention to the fact that remuneration is not the main motivator for
GCC-based employees.

The Qudrat TM Research results were recently released by Aon Hewitt and highlight that National
Qataris are the most highly engaged local Nationals in the GCC, irrespective of their gender.

Regarding issues often mentioned by companies regarding the challenges of the private sector in the Gulf
to attract the national workforce due to high pay in government jobs, the survey results underline the
following advantages :

"Private sector organisations enjoy higher levels of engagement and need to learn to leverage their
non-monetary competitive advantages over the public sector when recruiting nationals. In response to
what is important to them at work, GCC nationals rate career growth, learning and development, and a
clear HR policy above remuneration."

Meanwhile, Bayt.com produced another survey describing higher levels of employee engagement in the
region, based on a larger population sample as well as a wider geographic representation.

What is interesting though is to see some similar results from the survey regarding what makes employees
feel engaged :

"44.7% of employees claim that first and foremost, more opportunities to learn and grow within the
company are needed to make them feel more engaged. A better salary and benefits package comes in as a
distant second with 17.1% placing it as a priority; trailing behind is a clear career path (13.7%); a good
relationship with colleagues (9.1%); and a good relationship with their manager or supervisor (8.6%).
Only 6.8% believe that more recognition or appreciation will increase their level of engagement at
work."

So in that survey again, we see that remuneration is not the main driver of employee engagement.

A direct consequence is that companies, especially in the private sector, should not focus their efforts
only on their Compensation & Benefits programs in order to improve employee engagement.

Motivation is complex and organisations need to take a holistic approach in order to provide an
environment that will encourage the discrete efforts that employees can produce and that eventually lead
to better company results.

Yes, rewards, recognition and performance management are a part of the equation that can't be ignored.
And they play a role in reaching emiratisation and nationalisation targets for organisations. But the lesson
from these surveys is that you must always anchor them in more complete HR and managerial approaches
to the improvement of employee morale and motivation.

page 16 / 28


So try to think of how your organisation is approaching employee engagement, and please feel free to
share your experience of what worked best (or didn't) at your current or past company in the comments
section !

week ?

Related posts :

Emiratisation and Compensation & Benefits - part I
Emiratisation and Compensation & Benefits - part II
The UAE 40th National Day and the Compensation manager

_______________________________________________

page 17 / 28


The limits of Emiratisation quotas
http://compensationinsider.com/the-limits-of-emiratisation-quotas/

Your company has set some ambitious targets around emiratisation / nationalisation. You've been a good
Compensation manager. You have integrated Emiratisation into the bonus calculations for your
organisation. The idea was : "If it's in their objectives, then the Directors will focus on it".

So you sat with the HR Director and the CFO and offered to link part of the Directors bonus to the
achievement of a certain quota of Emiratis in the headcount of their Division. Of course, you did not
approach it roughly with a blanket number, identical for all, like "x% of Emiratis in the headocunt by
year-end".

No, you did your homework, took into account the percentage of Nationals present in each Division at the
beginning of the year, and set an improvement target unique to each organisation, that when compiled,
builds up to your overall target quota.

Then you included that in the overall Division or Director target (or both, depending whether your bonus
system includes a collective component or not), gave it a weight or priority, and let the system go on as
usual for the rest of the objectives.

You did your job, right ? Ensured that an Emiratisation corporate goal has been cascaded in the
organisation, while allowing for objective, realistic differences between the Divisions.

Well, I think it's a first step - but a lot more could be done.

What are the traps of this approach of emiratisation through compensation ?

The first one is that a purely quantitative approach, while easy to define and track, is important but can be
easily misleading. It does not give you any background on the human aspects of your emiratisation
strategy. Are you hiring the right Emiratis, the ones with the skills sets that are necessary to your
company success ? The ones that go the extra mile, adhere to your values, want to learn and have a real
future in your organisation ?

The second trap is that, once you set targets in each Division, you run a risk of totally stopping internal
mobility of Nationals in your company. In effect, why would any Director allow one of her Nationals to
move to another Division ? If she is not able to replace that person by another Emirati, then she will be
penalised for having "lost" on emiratisation, while the receiving Director will be seen as having improved
on emiratisation.

Yet in the end the company is not winning anything as there is no additional headcount of Nationals in
the organisation. And you end up with one unsatisfied Director and one being rewarded for something
which is not really what the company was trying to achieve. Eventually, this kind of rigid,
mathematical-only approach will lead to reduced career growth opportunities for the very population that
you are trying to focus on, the Nationals.

page 18 / 28


So what should you do ? On the quota target, one simple element is to discount the "winning" or "losing"
of UAE Nationals due to internal mobility in the statistics you use. This way, you neutralise the potential
negative effects on the development of your Emirati population.

Most importantly, when thinking about incentivising your company on emiratisation-related targets, try to
combine quantitative and qualitative targets. The latter will help you drive the focus where it really needs
to be, and where the value creation really lies.

So what kind of criteria do you use to link your compensation policies to nationalisation targets in your
company ? Please share your best practices in the comments section !

Related posts :

GCC Nationals pay : a lesson from the Y2K bug

_______________________________________________

page 19 / 28


GCC Nationals pay : a lesson from the Y2K bug
http://compensationinsider.com/gcc-nationals-pay-a-lesson-from-the-y2k-bug/

Remember the big scare of the so-called "Y2K bug" ?

Back at the end of the Nineties, the world started to realise that a lot of computer programs had been
written with dates expressed "55" or "87" instead of "1955" and "1987". As year 2000 was approaching
fast and therefore dates would become "00" ie a number less than the previous year at 99, there was real
concern that the programs running electricity plants, the internet, the distribution of gas and water etc, all
would fail and mankind would return, at least for a while, to pre-industrial ages. People started to pile up
on emergency stock, food, water, electrogen groups, and taking survival courses.

"What does that have to do with Compensation & Benefits ?", you say ?

Well, from the second half of 1998 to the end of 1999, all of a sudden, the salaries of IT engineers would
could fix these programs went through the roof. Companies had been aware of the problem for a long
time but a lot of them had procrastinated, and at once, everybody wanted these engineers and there were
not enough of them to satisfy the demand for their skills and services. As a consequence, the balance of
power shifted to them in the labour market, and they were able to command greatly increased salaries for
the same job they were doing a few months before.

So how do you manage that situation as a Compensation manager ?

Grade Minimum of Midpoint of Maximum of
salary range salary range salary range
Grade 8 16,000 18,000 20,000
Grade 7 12,000 14,000 16,000
Grade 6 10,000 11,000 12,000

The IT engineer in grade 6 who had a basic pay aligned with market at 11,000 is now worth 17,000,
which corresponds to a salary of a grade 8, two grades above in the jobs hierarchy. Managers are
desperate trying to get the engineers on board, but your internal policies prevent you from hiring above
the maximum of the job salary range.

You basically have 2 solutions :

1 - Hire in the apparent grade of the job as driven by its current market value. You now have new IT
engineers in grade 8, despite having a job that should be in grade 6 in terms of job evaluation - creating
imbalance in your job families as the IT engineers can end up being in a higher grade than their managers.
Your current IT engineers are in grade 6 and demanding to be promoted to the new grade, and there is a
risk of grade inflation along all your IT jobs as managers also demand to be promoted so that they are
above their employees in the hierarchy. You have spiralling costs in that whole job family, also
considering that allowances and benefits are paid 2 grades too high.

page 20 / 28


Or, if you don't grant the demands of the existing IT engineers and their managers, you will end up at best
with them being highly disengaged core employees, or at worst you will loose them all and your critical
systems update will fail and the company will not be able to function any longer.

2 - Alternatively, hire the IT engineers in grade 5 with a basic pay of 11,000 (core job value) + 6,000 as
hot skills or market premium. Make this premium clearly temporary and subject to regular revision up or
down based on market conditions in the contract of the engineers you hire. Extend the same premium,
with the same conditions, to your in-house engineers. You have some cost increase, but it is under control
as it is time-conditioned. And there is no job grading inflation in your organisation.

In the past, many organisations in the GCC have opted for the first solution. They hired employees in
over-graded roles. This happened for example during the real estate boom in the UAE, where project
managers, service delivery managers and other real estate and construction experts received packages that
were made of allowances and benefits that were higher than the actual job responsibilities should have
commanded as per a normal job evaluation exercise.

Then, when the global crisis hit the country, these people became too expensive and had to be made
redundant. Maybe if they had been paid on a normal basic + hot skills premium, this drastic decision
could have been spared, at least for a few of them.

Today, some organisations face a somewhat similar challenge when recruiting local Nationals. The
Nationals demand and command higher salaries than their expatriate peers. In most private companies,
the Nationals are not put in higher grades than the job requires, but their basic pay is significantly higher
than that of their expat colleagues (as well as some of their allowances).

I would challenge companies to adopt the hot skills approach, pay a "normal" basic for Nationals and
grant them a nationality premium.

Even if you can't do that because of the potential impact on their pensions, you can definitely
communicate that their basic is calculated based on 2 components. This will help educate them and set
their expectations as to what their pay would be irrespective of their nationality, and that one day if
market conditions change, this is what they would receive as a package.

What do you say ? Is this something that you could consider introducing for your organisation ? How do
you think this would be received by the Nationals as well as by management ? Please share your thoughts
in the comments section !

Related posts :



The UAE 40th National Day and the Compensation manager

page 21 / 28



_______________________________________________

page 22 / 28


Create the best rules in Outlook to boost your productivity
http://compensationinsider.com/create-the-best-rules-in-outlook-to-boost-your-productivity/

Beginning of the year, we all come back full of good intentions. In today's Sunday Skills, I want to show
you how to easily set up rules to manage the inflow to your Outlook inbox.

The steps are very simple and explained in this presentation :

What matters really, is how you can use these rules to help you manage your compensation work.

So let me share some examples :

1. Assign your boss' emails to a high priority category with a flag for follow-up when you are in to To,
not cc: line of the message.
2. Automatically delete meeting acceptance and refusal messages when you organise meetings (you
can also get into the event itself and track attendance).
3. Move messages sent to the HR distribution list to a specific "communications" folder
4. Send RSS feeds to a special "reading" folder to catch up upon at a later date
5. File messages from your team member about a specific project (eg : "compensation survey", "Oracle
update", "LTIP" is in the header or subject) where your name is in the To line as these are probably
for information only. You can even make an exception if the word "help", "advice" or "support" is
mentioned in the text or subject line and flag these messages for action to keep them in your inbox
for special review. Any message from anyone else with the same subject will still show up in your
inbox, allowing you to check them when they get in.

Now get your imagination running and get your inbox organised !

week ?

Related posts :

How RSS Feeds and News Readers can help Compensation & Benefits
4 skills to master for influential Compensation and Benefits

_______________________________________________

page 23 / 28


Get laser-focused Compensation information with Alerts
http://compensationinsider.com/get-laser-focused-compensation-information-with-alerts/

In today's edition of Sunday Skills, I want to complement a recent post I made about RSS and how
subscribing to different blogs, online newspapers / magazines and other websites can help a
Compensation manager maintain their skills and industry knowledge - for free, in a just a few minutes per
day.

Google Alerts complement your subscription to certain feeds. With Alerts, you don't receive info based
on the source of the news, you receive info based on the specific content you are interested in. You
receive this content every day, as it shows up on the net, or once a week, either direct to your inbox or in
your Reader.

This very powerful as you can monitor multiple things, for example :

Any news article related to your competitors if you are a Compensation consultant
Blog posts pertaining to a topic you want to increase your knowledge of, for example if you work on
a certain project
Monitoring a news story of interest to you (for example, I used an Alert to follow-up on the Zynga
stock scandal a little while back)
Tracking comments about a product you are considering buying etc...

Alerts are technically easy to create, as you can see in the quick presentation below :

Of course, the first alert you should create is one about yourself (your name, your company name if
relevant) and it should cover all types of information. You want to know if someone is using your name,
in good or in bad, so that you can react if needed.

Then, you need to be a bit creative in order to get the most relevant results for your needs. If you are like
me, at first you will probably be a bit too vague and you will receive tons of irrelevant information, with
one nugget here and there.

Don't give up, simply work on refining your query and alert so that you get to what you really want to
know about. It is better to receive fewer but well targeted alerts, than too many results - unless you like
sifting through mud in order to find your gold !

Here is one example. Imagine you are interested in receiving information about legislation on minimum
wages in country ABC, the Alert could be something like :

((New OR recent) AND (law OR decree OR legislation) AND ABC AND ("minimum wages" OR
"minimum salary" OR "minimum income" OR "minimum pay")

page 24 / 28


Unless the country is adopting new legislation on this topic and there is a lot of commenting about it, it
won't return results every day. But the results will be the ones that are useful to you.

In short, creating Alerts allows you to receive the information you need as it comes up on the web, even
from sources and places you have never heard of. It focuses on content you are interested in, versus
getting (indiscriminately) all the information from the sources that you like as per your Reader RSS
subscriptions.

What about you ? Do you use Alerts ? Do you have tips you want to share in the Comments section ?

week ?

Related posts :

How RSS feeds and News Readers can help Compensation & Benefits
Create the best rules in Outlook to boost your productivity

_______________________________________________

page 25 / 28


Share the knowledge - January 2012
http://compensationinsider.com/share-the-knowledge-january-2012/

Like every month, here are some of the best or most relevant Compensation & Benefits,
performance management, HR and/or global mobility articles that I came across recently :

Dave Ulrich's ebook for HR Magazine (free download) looks into "What is Leadership ?", another
must-read from the most influential HR thinker.
Also from him and his partners, a preview of the results of the survey they conduct regularly,
defining the 6 core competencies for HR professionals to be personally effective and have an impact
on business performance, as explained in HR Magazine (look for the January edition to see these
results in full)
… and here is another analysis of these results.
A blog post article written at Huffington Post by a US teacher on teacher's compensation. Very
interesting to see how what looks like great compensation from the outside (short working hours,
long holidays, great benefits and fair pay) is actually not perceived so well from the inside due to the
lack of pay for performance and no recognition of the impact of each teacher individually. Replace
teacher by "civil servant" or "government employee" and you have a classic article on the
shortcomings of tenure based pay progression.
An interesting article on why profit-sharing can be perceived as an entitlement, which is not what a
bonus is about as it is supposed to reward extra effort and not be expected.
This article (in French) resonates with my recent post commenting on the High Pay commission
recommendations in the UK. It touches on high pay from a public expense standpoint and argues for
a better distribution of total wages (read : less differential between average and highest pay in
companies). Beyond taxation as a means to redistribute wealth, they argue against the "closed circle"
of remuneration committees deciding Directors pay and often being composed of members who
cumulate board memberships : they propose to have the General Shareholder Meeting vote on Exec
pay, and to limit the number of Boards one can be a member of at the same time. They also propose
more long-term compensation as well as closing certain fiscal advantages. Whether we agree with
the specifics or not (some of these proposals are very specific to France), it is interesting to note that
2 independent commissions in France tend to propose some similar ideas regarding high executive
pay. I would not be surprised if this European legislation were passed in that direction in the coming
years…
Total distributes some of the largest salary increase budgets in France, boosted by record profits… yet
sometimes numbers aren't always what they seem, as some of the comments (clearly written by
people privy of the situation) highlight. Article in French.

For those of you who are interested in GCC and MENA articles, here are some regional pieces :

A contract is a contract and a company is bound by it - I am glad that UAE courts maintain this
principle alive and kicking :
UAE firms wising up to retirement acounts

page 26 / 28


Abu Dhabi will bear the cost of the pension hike to AED 10,000 for former federal employees and
military :
Some details of who will be impacted by the salary increases announced for federal government
employees on the UAE 40th National Day:
UAE manufacturing workers’ wages among lowest in the world. Average worker wage is $3.38
against $45.5 in Norway – the highest.
Talent shortage threatens Gulf retail banking expansion
Prospects for salary increases brighten in the Middle East
http://gulfnews.com/business/economy/prospects-for-salary-rises-brighten-in-middle-east-1.957919
An analysis of the main benefits of being an expat with a particular slant on the Middle East, through
the Expat Economics table from the HSBC Expat Explorer Survey 2011 which was published
recently.
The Council of Ministers has approved the Unified System for the Extension of Insurance Protection
for all Gulf Cooperation Council (GCC) citizens working in Saudi Arabia. The system provides
pension coverage for GCC citizens in all member states.
Saudi unemployment benefits may hinder Nitiqat scheme
6,000 health graduates refuse to work in the private sector - KSA
Egypt increases social insurance pension plans

Best of the rest :

Say on Pay leading to better compensation communication - Comments from the SEC Chairman.
An interesting example of representation of employees in the remuneration committee at John
Lewis.
The British government has announced plans to help control and understand executive pay. The
measures focus on four key areas: greater transparency; increased shareholder power; more diverse
boards and remuneration committees; and best practice led by the business and investor community.
Reactions have been varied, from institutional investors welcoming them to Unions finding them
rather "underwhelming"
In Incentives may not trump culture over at i2i (one of my favorite blogs), Paul Hebert argues that if
we want to change a culture, we could be "better off, over time, recognizing and rewarding
behaviors than trying to motivate them". I really encourage you to read this thought-provoking
article on culture, change, reward and recognition.

... And this month I would like to give you a special : a fascinating review of one of the most famous
speeches of all times, "I have a dream" by Martin Luther King. Nancy Duarte skillfully analyses the
different parts and rhythms of the speech in a short video (less than 8 minutes) and calls for everyone to
become great communicators. Or at least listen to Dr King again….

_______________________________________________

page 27 / 28


Compensation and Benefits with a Middle East flair

PDF generated February 01, 2012 at 3:45 PM by Kalin's PDF Creation Station WordPress
plugin

page 28 / 28

Powered by TCPDF (www.tcpdf.org)

Compensation Insider January 2012 posts

Recommended

Recommended

More Related Content

Recently uploaded

Recently uploaded (20)

Featured

Featured (20)

Compensation Insider January 2012 posts