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While Hong Kong employers claimed they have developed a salary scheme to drive higher individual performance (58%) and differentiate individual performance (56%), Willis Towers Watson’s recently published The Getting Compensation Right Survey revealed their actions in the preceding nine months did not match with their intentions.
The average base salary increase for a mediocre employee in Hong Kong is 3.65% while the average top performer is only 2.7% higher than that. This small discrepancy is concerning as top talent may misinterpret that as them being undervalued which ultimately leads to resignations.
“Top performers need to believe that they are paid more than average employees, since it is part of how they experience value and fairness in pay,” said Trey Davis, regional leader for executive compensation at Willis Towers Watson Asia Pacific.
As base pay budgets are often limited, Hong Kong employers tend to adapt short-term incentives: individual incentive programmes (65%) and organisation-wide incentives (54%) in order to differentiate talent.
However, while more than half of the company assets (54%) are eligible for the organisation-wide incentive plans, only one-quarter (25%) of employees will be able to join individual incentive programmes, which are often targeted at specific employee segments such as executives or sales forces.
“Organisation-wide incentives, where funding and performance measures are typically tied partially or wholly to organisation-wide results offer reduced incentive differentiation,” Davis said.
The insufficient differentiation on incentives based on performance is alarming, but there is little that can be done about it because of a lack of money.
Half of Hong Kong business are considering exploring ways to show their appreciation and integrate the employee experience such as preventing bias and inconsistency in hiring and promoting (79%), emphasising maternity support (36%) and flexible work arrangements (35%).
ALSO READ: How to get compensation right
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