COMPENSATION   EMPLOYEE SALARY   HEWITT 

Singapore - When it comes to unfreezing salaries, Samir Bedi, performance consulting lead for Hewitt Southeast Asia says there are certain considerations managers must first think through before they disseminate the news to their employees.

"For instance, what kind of message would unfreezing salary send?" Bedi says. The other issue is how much must the increase be in order to meet employees' expectations.

And as managers are the bridge between the company and employees, managers need to be equipped with the right tools, messages and information in order to have a constructive discussion about changing budgets and pay opportunities with employees. Thus, Bedi says that improving managers’ capability in communicating rewards structure and pay philosophy of the company will be the key in successfully unfreezing employees' salaries. 

It would also be in organisations' best interests to be transparent in the company's performance and share the news accordingly. "At the same time, it is also the best time to clarify on the pay philosophy of the organisation and how pay would be driven by performance," Bedi adds.

While unfreezing employees' compensation tool that is adopted by companies now, Bedi says another conservative approach companies may adopt is to unfreeze other benefits which were affected during the downturn instead, such as variable pay or annualised allowance.

For one, using variable pay as a tool can help relieve pressure from overall compensation spending while providing the flexibility in managing fixed costs. "Such flexibility will be useful, should the expected economy upturn progresses at a slower rate than expected," he says.

But in all, Bedi advises HR practitioners to be prepared in using compensation as a strategic and tactical lever to attract and retain talent. "As the battle for talent is ready to begin, organisations must be more aware of the value of their talent in the external marketplace and must proactively manage expectations in order to retain their talent as well as to attract the best talent to their organisation."

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