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Willis Towers Watson Total Compensation Management
© 2016 Willis Towers Watson. All rights reserved.
Today’s Speakers
2© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Carole HathawayPractice Leader, Rewards
https://uk.linkedin.com/in/carole-hathaway-
9247826
Sarah VarneySenior Consultant,
Communication and
Change Management
Derek BeebeDirector, Data, Surveys &
Technology
https://www.linkedin.com/in/derek.beebe
Agenda
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 3
• Growing trends in compensation management
• Developing a competitive compensation strategy and design
• Best practice in communicating reward to employees
• How Willis Towers Watson HR Software can help
Willis Towers Watson: A Truly Compelling Combination
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A strong client focus, an emphasis on teamwork, unwavering integrity, mutual respect and a
constant striving for excellence are the values at the core of the new Willis Towers Watson
organization.
39,000 colleagues
in 120+ countries
Scale, diversity and financial strength
$8.2 billion revenue
A deep
historydating back to
1828
Upcoming Events
© 2016 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 5
Event Dates Location Details
HR Technology Conference and
Exposition October 4-7 Chicago, IL Booth #622
HR Tech World Congress October 25-26 Paris Booth #219
Follow Willis Towers Watson on Social Media
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https://twitter.com/WTWhr
https://www.linkedin.com/company/willis-towers-watson
The Business Case for developing an aligned human capital framework
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A superior Employee Value Proposition drives desired outcomes
Source: 2014 Towers Watson Global Talent Management and Rewards Study
3xas likely to report
their employees are
highly engaged
1.5xas likely to report achieving
financial performance significantly above their peers
And less likely to report
having difficulty attracting
and retaining employees
particularly those in key
employee segments
Companies with a highly evolved employment deal are:
Integrate Total Rewards strategy, design and delivery for
a superior EVP
Total
Rewards
Career & Environmental Rewards
Performance-Based Rewards
Foundational Rewards
Program Delivery
Program Design
Philosophy & Strategy
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EVPEmployee Value
Proposition
Base salary is an increasingly critical driver of attraction and retention
ADDRESS TOP DRIVERS OF ATTRACTION, RETENTION AND SUSTAINABLE
ENGAGEMENT IN CONTEXT OF SPECIFIC BUSINESS STRATEGY
Global
Attraction
Drivers
Global
Sustainable
Engagement
Drivers
Global
Retention
Drivers
Sources: Employee view of drivers as captured in the Towers Watson Global Workforce Studies, 2012 to 2014.
Top five most frequently cited reasons by employees globally to join or leave an organization from a list of 27 possible reasons
Base salary
Job security
Career advancement
Learning/development
Challenging work
Base salary
Career advancement
Trust/confidence in senior leadership
Supervisor / managerrelationship
Job security
Leadership
Goals/objectives
Work load and work/life balance
Image
Empowerment
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Total Rewards Themes for 2016 and beyond
Total
Rewards
1. Review
effectiveness of
short-term
and long-term
variable pay
2. Rethink merit pay
3. Employ best
practices in
performance
management
4. Broader use of
social recognition
5. Wellness
incentives
Performance-Based Rewards
Key themes:
Optimise program value
Pay attention to segmentation
Streamline processes through technology
Invest in engaging employees and managers
Technology-enabled analysis, design and administration
1. Update programs designed before recession
2. Review peer group due to rapid market changes
3. Focus benchmarking and preference analysis on
critical skill talent and key employee groups
4. Health, financial and engagement issues cluster
together (integrated health and financial well-
being strategies and programs)
5. Shift to more choice and consumerism
Foundational Rewards
Career & Environmental Rewards 1. Focus on Career
Management
programmes
2. Enhanced focus on
Inclusion &
Diversity
3. Expansion of
contingent
workforce
4. Expansion of
flexible work
arrangements
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Willis Towers Watson HR Software: Overview
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Willis Towers Watson HR Software
© 2016 Willis Towers Watson. All rights reserved.
Product demonstration – Willis Towers Watson Compensation Software
Merit increases are not working
on two dimensions:
Short-term incentives are
not consistently delivering
• Only 20% of employers in North
America say merit pay is effective at
driving higher levels of
individual performance.
• A mere 32% say merit pay is
effective at differentiating pay
based on individual performance.
• In fact, roughly a third (30%)
report that annual base salary
increases are not at all effective in
this regard.
• Only half say short-term
incentives are effective at driving
higher levels of individual
performance
• Even fewer (47%) say that these
incentives are effective at
differentiating pay based on
individual performance.
• 30% of employers pay bonus to
those who fail to meet
expectations.
Performance- based rewards - more lip service than reality…
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Paying for
Performance?
Currently, highly prevalent pay for performance design
and implementation tools are broken
Source: 2015 Towers Watson Talent Management and Rewards Pulse Survey #1 (U.S.) and #2b (North America)
COMMUNICATION PROCESS TECHNOLOGY GOVERNANCE
Manager
readiness to
communicate &
support Total
Rewards
decisions
Employee &
manager
understanding
of and trust in
Total Rewards
processes &
outcomes
Accurate &
efficient
delivery
processes
Alignment with
other HR
programs, with
EVP as the
compass
Decisions
informed by
understanding of
what
employees
actually value
Efficient and
effective
decision
making
Robust analysis
and reporting
Enhanced
employee
experience
Clarity on
decision
making
Local vs. global
Defined
success
metrics and
proactive course
correction
Leadership that
stands behind
Total Rewards
principles and
decisions
And is the issue strategy, design … or delivery?
Program DeliveryTotal
Rewards
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Willis Towers Watson HR Software
© 2016 Willis Towers Watson. All rights reserved.
Product demonstration – Willis Towers Watson Talent Management Software
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Best practice in communicating
reward to employees
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Only 52% of
employees think
their organization
does a good job
of explaining
their pay
Only 45% of
employees say
their managers
are effective at
reflecting
performance in
their pay
decisions
Less than 50% of employees
report a clear
link between pay
and performance
Why companies need to pay attention
Towers Watson 2014 Global Talent Management & Rewards Study
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Help HR to better
support line
managers and
employees through
reward activities by
embedding your
reward philosophy
and principles,
clearly articulating
roles and
signposting key
actions required
Equip leaders with
messages that link
reward to business
strategy and equip
line managers with
skills and tools to
help them talk about
how reward works so
that they can have
better, more effective
conversations with
their teams about
what is expected of
individuals
Drive employee
engagement by
increasing their
overall
understanding of
their reward
package, how
it relates to business
strategy and how
employees can
influence reward
decisions
What experience are we trying to create?
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Show how your reward
approach helps you deliver
your business strategy and
continue to demonstrate
consistency in how you make
and communicate reward
decisions
ALIGN
FEEL
LINK
UNDERSTANDSHOW
BELIEVE
Align your reward
philosophy with your
broader HR strategy,
EVP and consumer
brand
Explain what business
factors determine your
reward philosophy, linking
back to your business
strategy and individual
performance goals
Draw on real examples
to illustrate the
connections between
reward and other
business initiatives and
recognise local context
Harness the power of
your brand to create
emotional buy-in and give
employees a framework
and context in which to
process the reward
messages that will follow
Use simple graphics,
animations or films
to bring to life the different
elements of reward
Principles for helping people understand reward
Creativity &
branding
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Access
Positive
reinforcement
Segmentation
Learning
preferencesPeer
influencing
Consumer-driven marketing tactics maximize message impact
Willis Towers Watson HR Software
© 2016 Willis Towers Watson. All rights reserved.
Product demonstration – Willis Towers Watson Total Rewards Portal Software
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Discussion and Questions
