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Why the communication from manager to employee is such an important step in the salary increment cycle

Why the communication from manager to employee is such an important step in the salary increment cycle

This step helps employees understand how compensation is determined and what compensable factors are being evaluated in order to set salaries, affirms Ching Li Chew, Director of HR, KONE Malaysia.

Ching Li Chew, Director of HR at world-renowned escalator & elevator company, KONE Malaysia, has more than 20 years of HR professional experience in outsourcing, shared services, consulting, and corporate HR leadership roles. She brings experience in both strategic business partnering and total rewards across various industries, including one of the Big Four audit firms, banking, insurance, FMCG as well as the escalator and elevator industry.

Presently driving the 'Empowered People' strategy in KONE Malaysia, in this interview with Lester Tan, Chew talks about compensation trends such as pay equity, rewards segmentation by workforce, and more, to distil how these apply to the current organisation. 

Q Keeping in mind that business earnings are still impacted, salary as a lever of retention will not be enough, so what are other modern and creative methods ways of retention out there? How can we find that balance to the budget while meeting the demands for growth in salaries?

It is a constant challenge in many companies and industries to manage salary costs in tandem with business growth and market dynamics.

Every challenge is an opportunity to explore and for us to look for ways to retain employees.

Extrinsic motivators such as compensation and benefits are important, however they are not enough to motivate employees for the long run. No doubt that employees will need to be paid fairly for the job and performance, intrinsic motivations such as personal/career growth, conducive working environment and recognition are all directly linked to motivation, job satisfaction and retention.

Hence, KONE Malaysia’s 'Empowered People' strategy, focuses on five (5) key themes to attract, develop and retain our talent as part of our 'Sustainable Success with Customers' company strategy. We want to:

  • Offer the best employee experience throughout the employee’s career journey,
  • Develop a strong culture (care, collaborate, customer, and courage, as well as inclusive and diverse workforce as part of the company’s sustainability agenda),
  • Upskill our workforce with critical competencies to be future proof,
  • Provide employees flexibility and wellbeing, 
  • Build talent capacity and capabilities.

Q As we know, talking about money has always been taboo, especially in an Asian context. Is pay transparency something KONE Malaysia has been exploring?

In my view, it is more common practice for an open publishment of the salary scale in the public sector compared to the private sector. Companies in the private sector are still able to achieve pay equity and beyond. For example, one of the important steps in the salary increment cycle is the effectiveness of the communication from the managers to the employees. If employees understand how compensation is determined and what compensable factors are being evaluated in order to set salaries (such as efforts to ensure both internal and external equities and performance outcomes), they are more likely to feel satisfied with their salary.

At KONE Malaysia, we emphasise on and drive the importance of salary review communication/dialogue between the manager and employee in our effort to engage and recognise employees. In addition, the career development discussion forms part of the dialogue between the manager and employee. We encourage our employees to grow within the organisation through job rotation within the country, regionally and globally. Our overall efforts have helped to improve our talent attraction and retention within the organisation.

Q How can we identify the different types of segmentation in the modern workforce and then create a programme that appeals to different segments of workers?

The first step to workforce segmentation is to analyse and identify roles according to two skill dimensions i.e. (a) Skill value and their impact; and (b) Skills uniqueness.

Depending upon the skills quadrant in which a role falls in, differentiated HR policies, reward strategy, and talent management programmes may apply.

For example, in an airline industry, pilots are assessed as a critical workforce segment as the job requires unique skillsets and qualifications. They are the ones that significantly affect key performance measures such as revenue, quality or customer-engagement metrics, or are critically important to the business. Hence, a differentiated reward strategy, learning and talent management policies are tailored to attract, develop and retain this critical workforce segment.

At KONE Malaysia, we constantly review our various workforce segments and customise our HR plans, initiatives, and spend effectively.

Q Before we conclude the interview, what, in your opinion, is the next big thing in the rewards space? How are you – and the organisation – preparing for it? Share some advice to your peers

In the near future, many corporate strategies will embed the diversity and inclusion (D&I) agenda as part of the HR strategy and sustainability efforts. In the overall HR strategy, it will be eminent that the total rewards space in the future will emphasise on:

  • The importance and need for equitable salary by deep diving into salary offers, increments and promotions with some key comparisons e.g. gender,
    Recognising the importance of inclusive and purpose-driven benefits that meet employees' needs from various segments and different phases of their lifecycle. It will became clear that a one-size-fits-all approach will fade in the future.
  • Focusing on wellbeing specific to safe workplaces i.e. psychological safety, as well as increasing emphasis on employees’ emotional, health, social and financial wellbeing.

As part of KONE’s vision to be a sustainability leader, we have aligned our local 'Empowered People' strategy and D&I plans to the global strategy. We have D&I KPIs in place to increase women in our workforce as well increasing varied and diverse experiences by hiring from outside the elevator and escalator industry.

To further drive and embed inclusive culture, we believe it starts from the leadership team to walk the talk and therefore have made it compulsory for all of our people managers to go thru the D&I training this year.

Image / Provided (featuring the interviewee)

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Follow us on Telegram and on Instagram @humanresourcesonline for all the latest HR and manpower news from around the region!

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