The document discusses making total rewards work and outlines Girish Kohli's experience and qualifications. It provides an overview of total rewards, including compensation philosophy, implementation, and tracking success. Specific topics covered include developing pay bands and compensation processes, implementing career frameworks and benefits/work-life balance programs, and measuring the impact on employee and business outcomes. The presentation aims to help organizations optimize their total rewards programs.
1. Making Total Rewards Work
18 DECEMBER 2012
Girish Kohli
Consultant
Email: off- girish.kohli@mercer.com , personal – girishkohli@gmail.com
Mobile - +91- 9971092805
India - Gurgaon - Infinity Towers
2. Preface
Dear All,
It was a pleasure interacting with everyone yesterday. Please find in the following
slides the discussion point of yesterday. Some of the points in the slide I couldn’t take
up because of paucity of time. There are other sub-topics related to comp which
couldn’t be included this time.
Please feel free to reach out to me for any aspect that you’d like to discuss related to
comp, organization design, employee engagement, etc. My contact details (personal
and professional) are shared on the cover slide and my profile on the following slide.
Additionally am attaching the in the annexure slides which introduce Mercer and its
service offerings. You may find something of interest to your organization there.
Again thank you for the opportunity and for being a wonderful Audience
- Girish
MERCER 1
3. About Girish
Present Responsibilities
Girish Kohli is a consultant at Mercer’s Gurgaon office and part of the Human Capital
Advisory Services (HCAS) business. His role encompasses project delivery and business
development across industry segments
Experience Details
Within Mercer, Girish’s latest project has been with an Indian automobile major where they
have helped the client redefine their compensation philosophy, restructure compensation and
redesign the annual variable pay program as part of its initiatives to retain its preferred
employer branding.
He has been part of and led a number of organization structure redesign initiatives for firms in
Key Work Areas: the FMCG and Automobile sector.
• Organization He has also worked on an assignment with a German luxury automobile company wherein
Design the team evaluated the roles within the organization based on the role profiles developed by
• Total Rewards them and used the evaluations as an input for compensation benchmarking and related
Design advisory.
• PMS Design He has worked on various projects on HR diagnostics like Employee Engagement surveys,
HR Audit and HR process redesign. He has also worked on role clarification and position
• Employee evaluation, organization design and long term incentive design.
Engagement
Girish’s experience on these projects have been spread over diverse industries like Auto,
• HR Process FMCG, NGOs and Financial, Logistics, and others.
Design
He has worked with clients like Hero MotoCorp, BMW India, Hindustan Coco Cola Bottling,
• Job Evaluation Tata Motors, SOS Children’s Villages, ONGC, New Holland Tractors, GRFL and others.
Academic Qualifications
Girish has an MBA in Marketing and Human Resources from NMIMS, Mumbai. He also holds
a B.E. in Computer Engineering from the Army Institute of Technology, Pune.
MERCER 2
4. Total Rewards Redesign – Large Multi-location Manufacturing Co.
A large manufacturing co. that prided itself about being employee centred
saw extremely low scores on its employee engagement scores on the area
of compensation
• Partnered with organization to redesign its rewards framework
– Compensation Philosophy
– Compensation Structure Simplification
- Benefits Design
– Pay Range Design
– Transition of Salaries to New Pay Ranges
– Redesign of Comp Processes
- Governance
- Empowerment of Line Managers
MERCER 3
5. Contents
• Total Rewards
– What’s ‘Total’ Rewards
– Building a Compensation Philosophy
– Implementing the Philosophy • Some challenges/ opportunities for
– Tracking Success of your Rewards organizations
Design – Internal Parity
– Location Differences
– Employee Wellness
– Rising Medical Costs
MERCER 4
6. What constitutes Total Rewards
What would I like to “earn” from my work…
Salary Benefits Careers Work/Life
Basic Retirement Quality of role
Quality of role Time off
Time off
Allowances (HRA, CDA Medical Job Stability
Job Stability Workplace facilities
Workplace facilities
etc) Learning and skills Workplace flexibility
Life and accident Learning and skills Workplace flexibility
Performance Pay insurance Development
Development Status and recognition
Status and recognition
Car Career growth
Career growth
Housing Employer Brand
Employer Brand
My value today My lifestyle, financial My future value My quality of life
security and protection
…What employees across companies have told us
MERCER 5
7. Building a Compensation Philosophy
One Population Separate Groups
Segmentation
Business Peers Talent Competitors
Market Definition
First Quartile Fourth Quartile
Market Competitiveness
One vehicle Multiple Vehicles
Reward Elements and Roles
Fixed Variable
Compensation Mix
Homogenous Differentiated
Internal Equity
MERCER 6
8. Articulating a Reward Philosophy for TML
To be effective, a reward philosophy must include these elements
Total Rewards Philosophy must define the role of monetary rewards, career
opportunities, employee welfare in the overall compensation philosophy
1. Workforce segmentation – One size does not fit all. Rewards need to be
targeted and managed based on different workforce segments in order to optimize
spending.
2. Market definition – Selecting a comparator group(s) that represents companies
from which TML sources talent or to which the company may lose talent assures
that the target set is relevant.
3. Market Competitiveness – An assessment of how competitive TML needs to be
considering intensity of competition, growth plans, availability of talent, hiring and
attrition costs.
4. Reward Elements and Roles – Different elements of total rewards can be used
to play various roles, such as hygiene factor, attracter, retainer, performance
driver and should be designed accordingly.
5. Compensation Mix and Differentiation– Ensure that the mix of compensation -
fixed, short-term incentive, long-term incentive – is reasonable and consistent with
market practice
6. Internal Equity– How much differentiation are we comfortable with?
MERCER 7
9. Sample Total Rewards Philosophy – Company ABC
• ABC’s total reward philosophy is simple: our employees deserve to be
compensated fairly and competitively in return for their contribution to ABC’s
success.
• The company benchmarks its competitive position in the relevant labor markets
in establishing competitive pay and benefits programs.
• ABC strives to be an employer of choice around the world. Wherever practical, ABC
believes in emphasizing a strong pay for performance perspective in each
employee’s total rewards package through merit based pay increases and variable
bonus programs based upon company, business unit and individual
performance.
• In many ABC locations around the globe, considerable workplace flexibility has
been employed on a local level to provide employees and management with the
ability to adapt company-wide programs to fit local environments.
– For instance, our ABC Hours program provides for compressed work schedules
at the beginning of the work week that allow for half work days on Fridays and
alternative work schedules to accommodate family commitments.
– ABC’s unit in Renton, WA, U.S. offers an on-site child care facility.
– Other locations, including both Rhode Island locations, offer on-site exercise
facilities.
Source: Data shared in public domain
MERCER 8
10. Implementing the Philosophy - Salary
• Basis of salary
• Define Job equivalence - Develop work levels
• Develop pay bands
• Develop compensation process and guidelines
• Track Parity
MERCER 9
12. Basis for salary: 3 P Model
Person premium, typically based on
• Competency assessment
• Skill/ qualification/ credentials
• Market worth (e.g. Demand-supply)
PAY FOR
PERSON
Mixed on the basis
Position Pay typically
of multiple factors like TOTAL
based on PAY FOR
COMPENSATION
• Nature of industry/sector
POSITION OF AN EMPLOYEE
• Position evaluation • Work profile
• Market pay level for position • Organizational philosophy
PAY FOR
PERFORMANCE
Performance award, typically based
on
• Individual performance
• Organization performance
MERCER 11
13. Defining Job Equivalence – Define Work Levels
Prior to the Position Evaluation Post the Position Evaluation
exercise exercise
L L
L-1
Band 1 L-2
L-1 L-1 L-1 L-1
L-1
L-1 L-2
L-2 L-2 L-2 L-2 L-2 L-2 L-2 L-2
Band 2
L-2 L-2 L-1
L-3 L-3
L-3
L-2 L-2 L-2
Band 3 it
L-2 L-3 hib
x
E
MERCER 12
14. Developing Pay Bands
• Key Design Parameters
• Number of Structures
Range Spread
• Number of Ranges
• Range Spread
• Mid Point Progression
4
• Parameters Impact
• Range Overlap (extent
3 of overlap between
Mid Point Progression values across ranges)
• Headspace (number of
2 years it will take an
employee to reach from
range min to max)
Range 1
Number of ranges
MERCER 13
15. Developing compensation process and guidelines
• Qualified with significant experience
Pay Ranges assist in monitoring and
Premium
• Exceeding expected contribution comparing employee compensation
• Hiring zone for hot skills and help guide the decision making
in the following processes:
Market Pay
• Qualified with a fair bit of experience
• Fully contributing to the role • Recruitment
• Hiring zone for specialized skills
Developing
• Increment
• Qualified but relatively inexperienced
• Not yet fully contributing to the role
• Hiring zone for regular new hires • Promotion
Three Zones in a Pay Range
MERCER 14
18. Why are Career Frameworks Important?
• Employees value and look for career advancement over and
above base pay*
PAY CAREER • Pay and benefits are replicable; Career and Work-Life policies
provide competitive advantage
• In uncertain times companies need to look at more cost effective
BENEFITS WORK-LIFE
and sustainable ways to build the employee value proposition
• Given the employability gap, career frameworks would facilitate
identifying, developing and deploying in-house talent to bridge
capability gaps
MERCER 17
Source: Mercer’s What’s Working research
19. Mercer’s Point of View
What are Career Frameworks?
Role family career progression
iv
t rat
Illus e
Career Frameworks Employees Organization
Understand Capabilities
Transparency
opportunities visibility
Control Career direction Best talent
Velocity Right speed Fill talent pipeline
MERCER 18
21. Benefits – Work Life Balance
Focus: Medical costs, Employee Wellness, Employee Productivity
Across the Asia Pacific Region, 35% of the 899 companies that
participated in a the Mercer Marsh Benefits survey spent over 6% of their
annual payroll on health benefits in 2011, with 10% of those spending in
excess of 15%
• According to the American Journal of Health Promotion’s in-depth analysis,
employers with work site health promotion programs see on average:
• a 27% reduction in sick leave absenteeism
• 26% reduction in health costs, and
• 32% decrease in workers’ compensation and disability claims.
• But the most important finding has to do with all-around wellness ROI. For
every dollar invested in wellness, employers saw an average savings of
$5.81 due to improved employee health and reduced medical claims.
Source: http://www.hrmorning.com/massive-study-shows-true-wellness-roi/?goback=.gde_113026_member_191470058
MERCER 20
http://www.mercer.com/press-releases/wellness-programs-combat-rising-healthcare-costs
23. Tracking the Success of your Rewards Program
SAY DO
What employees and employers How employees and employers
say as measured through actually behave as measured through
Management interviews Individual employee records of
Recruiter interviews performance, retention, etc.
Employee surveys Organization performance
Focus groups Exit interview feedback
Company policies
Complete, verifiable
understanding of the interplay
between perceptions, behavior and
retention
MERCER 22
25. Marsh & McLennan Companies
Who We Are
One of world’s elite business enterprises — the
preeminent provider of professional services
Who We Are
Risk and Insurance Services
One of world’s elite business enterprises — billion in revenue the
• $10.6
• Marsh
preeminent provider of professional services
• Guy Carpenter • 140 year history
• Clients in more than
Consulting Services 100 countries
• Mercer
• Oliver Wyman
• 51,000+ colleagues
MERCER 24
26. Marsh & McLennan Companies
What We Do
Provide advice and solutions in the areas of risk, strategy
and human capital
Marsh Mercer
• Services 87% of Fortune Global 500 • #1 health & benefits consultant/broker
• Manage 3+ lines of coverage for 92% of • #1 investment consultant
Fortune 100 • Leader in retirement, risk & finance consulting
Guy Carpenter Oliver Wyman
• #2 global reinsurance intermediary • #1 financial services strategy consultant
• Fastest growing global reinsurance • Fastest growing strategy consultant
intermediary
MERCER 25
27. Mercer
Who We Are
The global leader in human resource consulting,
outsourcing and investment services
Who We Are
• $3.5 billion in revenue
The global leader in human resource consulting,
• 65-year history
outsourcing and investment services
• 8 lines of business
• 27,000+ clients
• Offices in over 40 countries
• 20,000+ colleagues
MERCER 26
28. Mercer
What We Do
Help clients optimise the value of their
human and financial resources
What We Do
Mercer’s Services Mercer’s Clients
Help clients optimize the value of their US
• 80% of the 500 largest
Consult
human and financialpublic companies
resources
• 70% of FTSE 100 companies
Invest Design
• 70% of CAC 40 companies
• 65% of Nikkei 225 companies
• 80% of clients <5000 employees
Administer Implement
MERCER 27
29. Mercer
How We Make a Difference
Enhance the health, wealth and quality
of the global workforce
How We Make a Difference
Enhance the health, wealth • 27,000+ Mercer clients
and quality
of the global workforce
• 9 million+ benefit plan
participants
• 110 million+ employees
of Mercer clients
MERCER 28
31. The Mercer Advantage –
Brand / Intellectual Capital
Mercer Brand Prestige Intellectual Capital
• World Economic Forum –
Consulting Firm Rankings*
Practising Talent Mobility for
2011 2010 Economic Growth study
McKinsey & Company 1 1
• Mercer India Monitor
Boston Consulting Group 2 2
Bain & Company 3 3 • AIMA Management Capability
Booz & Company 4 4 Index
Deloitte Consulting LLP 5 5
Mercer 6 8 • NASSCOM Mercer Inclusivity
-------------------
Report
Towers Watson 17 14
• CII Mercer Talent Survey
Aon Consulting 32 35
* vault 2011 rankings
MERCER 30
32. Mercer in India
Mercer Business Lines
Retirement
Information Health & Benefits
Human Capital Benefits
Product Solutions Consulting
Consulting
Product and Service Offerings
Service Offerings Service Offerings
Service Offerings
Benefit Design
Board Governance Plan Design
Compensation Co- Financial Analysis &
Broad Based Funding
Sourcing Plan Funding
Rewards Accounting
Compensation Risk Carrier
Executive Standards
Surveys Selection
Remuneration Legal Compliance
Benefits Surveys Benefits Broking*
HR Transformation Vendor
Corporate Communication &
Leadership Management
Benchmarking Administration
Development Mergers,
Performance Employee Mobility
Acquisitions and
Measurement Services
Restructuring
Sales Effectiveness Mercer PayMonitor
Multinational Issues
Workforce Strategies Asia Monitor
Communication &
Employee Global Publications
Education
Engagement
•In collaboration
with Marsh India
MERCER 31
34. The Mercer advantage
1
Experience of working in large complex projects with multiple clients across sectors. Mercer provides
support to 50% of the Fortune 100 companies and over 40% of the Fortune 500 companies.
2
Experience of working in most industry verticals to deliver solutions suited to their context
3
Mercer starts each project with the primary goal of understanding the unique challenges and priorities
of the client
4
Experienced team with ability to execute and manage assignments of such scale and complexity
5
Mercer is strongly positioned in the areas of culture, job evaluation, leadership and rewards
6
Mercer follows a consultative and collaborative approach to understand the changing priorities and
complexities of client organizations and is flexible, nimble and open to new ideas
MERCER 33
35. Our extensive experience: We have worked with industry leaders, start-ups
and the government sector in diverse areas
Experience in
large complex
assignments
Experience
with start-up
assignments
Understanding
of the
government
sector
MERCER 34
36. Here is what our clients have to say about us…
A few client testimonials
"Mercer did a thorough research into the working of our
organization, its mission, vision , objectives and existing structure,
- Mr. Rajeev Ranjan
before coming out with their recommendations. They have been Deputy National Director – Human
very systematic and interactive in their approach, obtaining Resources,
feedback from staff members across all levels. Their
recommendations formed the basis for our new organization SOS Children’s Villages
structure, PMS policy, recruitment & selection policy and
compensation policy , among others”.
- Mr. Rajiv Arora “ The project was managed exceptionally well and was
completed within the stipulated timeframe. The
Head – People Team, recommendations have been implemented within our
organization successfully with adequate support from Mercer
Virgin Mobile India Pvt. Ltd.
Consulting”.
Mr. PV Ramana Murthy
“I would like to place on record my appreciation for the quality
and thorough work done by Mercer”. Head – Human Resources,
Hindustan Coca Cola India
MERCER 35
37. Here is what our clients have to say about us…
A few client testimonials
“It has been an extremely enjoyable and learning experience working
with Mercer Team on the assessment of our high potential employees. Dr. Sunil Kumar Singh
They bring with them a complete dedication and a sound research
experience at each stage of the work and none are given lesser Group GM – HRD
importance. The result was amazing as the tool and was extremely
Punj Lloyd
contextualized and all assesses recognized this fact along with all
other stakeholders. Overall, I personally find them never
compromising with basic concepts”.
- KRN Moorthy “Before our PMS re-design , we were targeting a laundry list of
objectives. Consequently, we were losing focus on what we really
Dy MD needed to do to achieve more growth and better performance. Mercer
Wanbury Ltd. helped us in redesigning the PMS system. The project has been
implemented successfully, and we would recommend them as a
consulting partner in designing and implementing Human Capital
Solutions
MERCER 36
39. Actuarial valuations and retirement benefits consulting
• Actuarial valuation services covering: • Mercer’s strength:
– Gratuity – Qualified actuaries with rich experience across
– Leave encashment related liabilities different client situations
– Ex gratia plan – Strong experience with retirement benefit plans of
– Voluntary retirement plan private and public sector organizations in India
– Experience with defining financial and demographic
– ESOP
assumptions
– Post retirement medical plans
– Support for transition from previous actuary
– Provided fun
– Global actuarial support
– Other long term employee benefits like long service
awards
• Retirement benefits consulting services
– Review of retirement benefit schemes and re- Plan Design &
Govt. approvals
Support in Fund for trust fund
engineering Manager selection
Other Labour
Law services
– Retirement plan design
– Government approvals on retirement benefits fund
Actuarial
trust set ups Valuation
– PF registration & obtaining of exemption/relaxation
– Analysis support for selection of fund managers for
retirement benefits
– Labor law support for retirement benefits
MERCER 38
40. Compensation benchmarking and planning
• Service offering includes:
Position specific
– Compensation and benefits benchmarking across 13 compensation data
industry segments including Asset Management,
IT/ITeS, Consumer, Pharma, Medical Equipment,
Chemical, Hospitality, Oil & Gas etc
– Customized survey options
– Job specific benchmarks
– Surveys and data for expatriates moving out of India
and expatriates moving into India
– Pay range development and compensation planning
• Mercer’s strength Detailed benefits
benchmarks
– Ability to provide off the shelf reports from a database
of 500 plus companies across multiple industry
segments
– Detailed compensation & benefits data available
– Ability to provide online access to reports for unlimited
generation of benchmarks
– Customized survey options
MERCER 39
41. Organization structuring and manpower estimation
• Service offering includes:
Sample Structuring
– Organizational diagnostics to recommend structure Design Criteria
Mercer’s Single Frame
aligned to business context, objectives and strategy Expert Process
– Structure support mechanism development (review
forums, permanent/ temporary teams etc.)
– Workload analysis and manpower requirement
modeling
– Implementation planning/ roadmap development to
help organizations roll out proposed structures
– Communication and change management support for
effective deployment
• Mercer’s strength
– End-to-end value chain offering: from diagnosis to
design to implementation support
– Structured and robust methodology based on analysis
of organizational data like processes, value chain etc.
– Strong experience in organization structuring related Process Analysis to
projects across diverse sectors like Automotive, Organization Structure
FMCG, Manufacturing, Telecom, Hospitality etc
MERCER 40
42. Responsibility mapping and workforce levelling
• Service offering includes:
Mercer’s 3-P Management Model
– Responsibility identification and mapping within an
organizations through a structured process and
documentation
Mercer’s RC document
– Role evaluation using Mercer’s International Position
Evaluation methodology (IPETM)
– Identification of work levels/ bands based on natural
progression of roles within the organization
• Mercer’s strength
Mercer’s IPE system
– Structured and robust Role Clarification methodology
based organizational business processes
– Globally implemented proprietary International Position
Evaluation System (Mercer IPETM)
– More than 350+ licensed Mercer e-IPETM clients globally Banding Sample
– Strong experience in India; conducted 6,000 evaluations
in the last 5 years across more than 80 companies
– Linkage to Mercer’s strong compensation database
– Strong on ground support with trained, certified and
experienced consultants
MERCER 41
43. Performance management and rewards plan design
Three Pronged Rewards Strategy
• Service offering includes:
– Rewards strategy and design Total Rewards Strategy Framework
– Variable pay and short term incentive plan design
– Performance management system aligned with
reward programs
• Mercer’s strengths
– Experienced team of reward experts
– Consistent methodologies and frameworks,
Incentive Framework
– Proprietary tools and global data resources,
– Tailored solutions that strategically allocate total
reward resources and link employee rewards to
business performance
MERCER 42
44. Competency design and assessment
Competency Themeing Process
• Service offering includes:
– Behavioral competency frameworks design
– Technical competency frameworks design
– Role profiling
– Assessment centers
– Creation of feedback reports and individual
development plans
• Mercer’s strength
– Vast experience in designing behavioral and Sample
Competency
technical competencies across sectors Framework
– Strong database in the area of behavioral
competencies
– Trained and experienced assessors
– Conducted approximately 5,000 assessments
since 2000
Sample
Role
Profiling
MERCER 43
45. Career management frameworks
Career Management: The Career Joint Venture
• Service offering includes:
– Career Progression framework: which includes:
- Defining Career Streams
- Developing integrated Career Paths/ Lattices
- Defining Career Progression criteria
– Succession Planning framework
Career Paths/ Career Progression criteria
• Mercer’s strength Lattices
– Experienced consultants as a result of deep
understanding of business imperatives and
linkage with HR
– Expertise to integrate career path architecture
with other HR systems and processes
– Consistent and well defined frameworks
– Global data resources and experts
Sample Career Maps
MERCER 44
46. Leadership assessment, development and succession
Leadership Development Process
• Service offering includes:
– Success profiles design
– 360 degree assessment
– Action learning process design and conduct
– Coaching and mentoring workshops
• Mercer’s strength
– Experience of working with diverse clients from Action Learning Process
educational institutions to multinational The Learning Journey
organizations
– Mercer experts are certified leadership trainers
with acclaimed degrees from international
universities like Harvard University
MERCER 45
47. Executive remuneration
Mercer’s four Quadrant Framework
• Service offering includes:
– Executive remuneration strategy to support
business strategy, reward for performance, and
attract / retain talent
– Long term Incentive plan design and
implementation
– Equity strategy development, including grant
guidelines and management of share reserves
– Implications of tax, accounting, and other regulatory
developments on executive remuneration programs
– Board of director remuneration strategy and design
Mercer’s Performance
• Mercer’s strength Sensitivity Analysis (PSA)
– In-depth knowledge of local market through annual tool
compensation and other benchmarking surveys
– Significant global and local experience in executive
remuneration design and implementation
– Analytical tools and data
– Depth and breadth of regulatory and technical
expertise
– Capabilities/credentials of individual consultants
and subject matter experts
MERCER 46
48. HR effectiveness
Mercer’s HR Design Process
• Service offering includes:
– Diagnosis of current HR systems and processes
– Process redesign and improvement measures
– HR policy design
– Service delivery model design and
implementation
– Sourcing strategy development and
implementation
• Mercer’s strength
– End-to-end value chain offering, from diagnosis to
design to implementation support
– Specific focus on the HR function; expertise and
knowledge behind consulting HR Operations
Scanner Samples
– Global reach and resources Process Manual
Sample
– Quantitative approach; supported by best-of-
breed methodologies
MERCER 47
49. Employee engagement
Mercer’s Six Factor Framework and drivers for engagement
• Service offering includes:
– Mercer’s employee engagement survey based on
the ‘Cause-Effect’ model of engagement. (Mercer’s
Proprietary Six Factor Framework based on 13
drivers of engagement)
– Aimed at gaining a deeper understanding of
employee perceptions on various aspects within an
organization.
Four phases of Mercer’s Employee Engagement Model
• Mercer’s strength
– End-to end solution provider: survey conduct-
analysis- action plan design- implementation
assistance
– Experience of conducting engagement surveys
with large scale as well as small scale
organizations
– Over 3,000 employees surveyed till date in India
– Benchmarking survey results with Mercer’s What’s
working database and Mercer BT survey
MERCER 48