With a silver win for Excellence in Total Rewards Strategy at HR Excellence Awards 2020, Singapore, Sharon Ong, Avaloq Sourcing APAC Singapore’s APAC Head of HR shares how the team has leveraged on its total rewards strategy to achieve the fundamental pillars of its HR priorities. She goes on to explain the team’s approach in harnessing design thinking as a tool to meet future demands including agility and more.
Q What is your organisation’s winning HR strategy, and what are some milestones you’ve accomplished along this journey?
Avaloq’s winning HR strategy is in our courage to critically assess and challenge our status quo and the rigour in our implementation efforts. Our innovative total rewards programme is built on the premise of driving a culture of strong collaboration and exceptional performance among our employees. We are delighted that it has helped us achieve it.
Along this journey, we have accomplished the following milestones:
- A revamped Position-based-Framework (PbF) which, in essence, is our job classification and grading system.
- A newly developed salary bands per country & grade resulting in a consistent base pay structure that minimises any existing pay disparity.
- The introduction of two (2) innovative tailor-made variable compensation plans namely the Success Share Unit (SSU) and Extraordinary Achievement Rewards (EAR) as part of our total rewards strategy.
These plans allow the employees to directly participate and be duly rewarded in our company's success.
Q How has this strategy helped you achieve your HR priorities, and what role has the leadership played in helping make this initiative a reality?
The total rewards strategy has helped us achieved the following HR priorities:
- Fostering greater collaboration by incentivising employees to deliver on team outcomes, thereby triggering the right behaviours to jointly reach the overall company goals, effectively moving from individual to collective intelligence.
- Empowering leadership to recognise good performance and take risks to encourage innovation as any line manager(s) can nominate deserving Individuals and/or teams for Extraordinary Achievements.
- Facilitating international growth and ensuring competitiveness. SSU replaced the standard bonus programmes. It was designed to share the company's success with the employees. When everyone has a stake in the company, it allows for greater collaboration to grow and compete internationally.
The leadership has played a critical role in supporting the transformation of our total rewards programme through active ambassadorship and advocacy.
Q Unexpected roadblocks are part and parcel of executing any initiative. What were some of the barriers that you and your team experienced while rolling this out, and how did you successfully get past them?
One of the challenges was to ensure that all stakeholders (participating line managers and incumbents in focus group) provide their timely inputs in revamping our PbF job classification and grading system. The PbF forms the framework that harmonises and standardises the base pay remuneration of similar roles globally and across the region. The rigour of regular follow-ups and status updates of this sub-project has kept us on track.
Also, when the general market compensation landscape was fragmented, there was no one-size that fit all. And I must credit our C&B team for thinking out of the box to eventually design a total rewards programme that suits us and helps us achieve our objectives.
Then there was a general scepticism among employees that the newly designed total rewards programme might decrease individual bonus pay-out opportunity as it is now based on shared success of the company.
In actual fact, the total rewards programme gets employees to have one common goal for all to drive towards overall company success and eventually towards successful annual SSU/bonus payout. In addition, the other variable component of the rewards programme, the EAR empowers and provides added flexibility to any LMs to recognise extraordinary achievement by specific individuals.
These two variable components of the total rewards programme fundamentally help drive collaboration to achieve overall company goals and encourage innovation with real performance.
Communication was most critical to the success of the programme. We needed to ensure that people understood why we made these changes and how it was going to affect them. We adopted a multi-step approach by first educating and training the management team, who in turn served as ambassadors and we held roadshows to directly communicate these changes to all our employees.
Q As evidenced by the win, this initiative clearly delivered some amazing results. What was your gameplan for measuring ROI? What are some proud achievements you can share with us on this front?
As with all initiatives that we rolled out, it is important that are able to measure ROI. This was done by way of an anonymous rating of our total rewards programme via our quarterly online engagement survey. Over time, we see improved ratings on the total rewards programme and it has become a key driver/strength of our company as evidenced in the survey findings.
In tracking exit interviews, Compensation was rarely mentioned as main reason for leaving the company.
I am proud to share that Strategy and values are lived and supported through our programs e.g. network culture & collaboration through one common goal in the SSU component and any outstanding achievements in the EAR program must be justified through at least one of our Core values.
We see more engagement and interaction by the management to identify and reward those with outstanding contribution. The possibility that managers can nominate any employee in the organisation (not only from their own area) contributes to a strong collaborative culture. Managers also feel less pressured as they need not rank & rate employees into a bell curve but rather feel empowered through the EAR to be able to reward their best performers.
Finally, our total rewards programme is used in our recruitment activities to demonstrate our innovativeness, promote our culture and distinguish ourselves from the competition.
Q Given that the world of work has essentially been overturned, how do you expect the HR function to evolve one-two years down the line? In line with that, what are some steps you have put in place to remain future-forward and agile
We see a clear shift to employee experience and that is why we not only use agile, but also design thinking as a new tool to meet the future demands. The Avaloq HR team is trained in agile methodology to understand end-user profiles and their needs. It is in our plan that all project planning and implementations be conducted in an agile way, actively involving users from the beginning, proposing prototype and making adjustments to improve it continuously. We are determined to embrace being agile and create ‘moments that matter’ for our employees.
We should expect automation for most HR functions to be the norm in the near future. HR interventions would be heavily focused on strategic planning with insights gained from data analysis.
We will continue to develop our IT capability in data analytics and reporting. Through data analytics, we hope to identify hidden problems and explore alternatives to help us improve the way we work and our employees’ experience.
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