Get access to the exclusive HR Resources you need to succeed in 2018.
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 14 cities across the U.S. this fall.
Gain the skills you need to rise to the next level in your career. Jon us at SHRM's Leadership Development Forum, October 2-3 in Boston.
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
CHICAGO—Managing total rewards globally has become a challenging and complex exercise. The multitude of issues to contend with include:
The scarcity of highly skilled talent.
Global demographic changes.
Fewer available resources for pay increases.
The increasing costs of health care and retirement.
The decline of the defined benefit paradigm around the world.
“Those of you who work in global benefits, my heart bleeds for you,” HR expert John Rubino, president of Rubino Consulting Services, said at a June 17, 2013, session at the Society for Human Resource Management (SHRM) Annual Conference & Exposition.
At the same time, global HR trends are challenging employers as they seek to attract the services of top performers, Rubino explained. Those trends include the breakdown of the traditional base pay structure, less emphasis on internal equity, and more variable pay in the compensation mix.
“This is just an inkling of how highly complex it is to do global human resources,” he said. “It’s tough enough doing it in one country. Ratchet that up by about a thousand and you have an idea of what it’s like to do this around the world.”
The Exchange Relationship
In today’s competitive global environment, there is a new exchange relationship between the employer and star employees, Rubino said. The employer provides valuable total rewards, and the employees provide their time, talent, efforts and skills. “None of this is dictated in a command-and-control environment anymore. If you’re a young person with the valued skills, you can dictate to the organization what you want.”
Attracting the Talent You Want
So what are you offering in your total rewards package to attract and engage the talent you seek?
“You aren’t going to do it with just a paycheck,” he said. “Total rewards motivate star performers.”
Traditional compensation systems don’t work in a competitive global employment environment where talented workers are looking for “true pay for performance,” Rubino observed.
“Base-salary merit increases are just absolutely useless. They are, in fact, de-motivational.” Thus, employers should consider eliminating this type of compensation, which recognizes the job instead of the person in the job, he said.
There are several problems with the practice, according to Rubino. A meager 2 percent to 3 percent increase is not motivational. Then, pay movement is accelerated for those lower in the range and decelerated for those higher in the range. For those who have reached the range’s top, generally, there’s no increase. “You’re actually encouraging your talent to leave the organization,” he explained.
“In my estimation, you have to give at least 20 percent of your employees zero to have enough money in your budget to truly reward your top performers.”
If you don’t personalize rewards for your star performers, they will leave, he stressed.
“They know they’re good. They’re employable. They don’t understand what “loyalty” means, and I don’t blame them. Personalizing rewards now is key.”
Roy Maurer is an online editor/manager for SHRM.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Join SHRM's exclusive peer-to-peer social network
SHRM’s HR Vendor Directory contains over 10,000 companies