Asia – A lack of specific and streamlined compensation processes is one of the major challenges that affect compensation in Asia today.

After interviews with regional heads of leading MNCs, Hewitt found that there are high variability and inconsistencies in compensation processes. The Managing Compensation in Asia 2008 report said compensation professionals spend almost 80% of their time doing administrative jobs when they should actually be involved in more strategic tasks.

The most important requirement for creating a successful compensation plan is keeping on top of changing business requirements and the drivers behind them. The lack of alignment with business needs is another challenge facing compensation strategies in Asia.

To overcome these challenges, report predicts that organisations in Asia will stray away from traditional, one-size-fits-all compensation programmes for the next generation of talent management. Nishchae Suri, principal of Hewitt Associates predicted, “Organisations will increasingly offer workers customised rewards menus, giving employees their total cost of remuneration and allowing them to design the specifics of their rewards packages.”

Companies will also distinguish their best and worst employees in more visible ways to motivate top talent. Besides pay, the other types of reward for high value employees include promotions, privileges, special projects or training and recognition in the form of praise or certificates.

Such compensation strategies catch the attention of top performers and send a signal to mediocre performers. The organisation’s compensation investment is also optimised by using variable pay incentives instead of focusing on base pay increases.