Hay Group’s global research, The changing face of reward, looks at the factors driving changes in reward, and how companies are responding to those changes to meet the challenges of the new business environment.
Across all sectors and regions, organizations are struggling to rebuild profitability following the recession. With revenue growth hard to come by, organizations are focusing on cost containment and performance improvement as the paths to profit growth. This requires them to balance four, often conflicting, challenges:
- Cost containment
- Performance improvement
- Talent engagement
- Risk management
So how are companies using reward to tackle these challenges?
Hay Group’s latest research, The changing face of reward, is based on interviews with over 230 organizations in 29 countries. It looks at the factors driving changes in reward, and how companies are responding to those changes to meet the challenges of the new business environment.
Reward is no longer the province of compensation and benefits experts. Representing anywhere between 10 and 70 per cent of a company’s total costs, reward is a top management issue, with the CEO and the board closely involved. The study shows that reward is now more than ever under the microscope, with CEOs asking:
- How does what and how we pay impact on performance?
- How effective are all our reward programs, not just base pay and bonuses?
- What is the return of investment on our reward costs?
The role of the compensation committee is also undergoing radical changes, with a much greater remit to oversee all reward programs and understand their impact on costs and risk. Developing and delivering reward programs that are cost effective, drive performance, build talent and avoid undue risks - these are the challenges ahead. Getting reward right is mission critical for all organizations.
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