Post by SSG..The world of benefits...

Sunday, August 17, 2008

Dear All,

It is interesting to note from the posts of Sourabh Bhatia and Bijen Pattnaik that there are different challenges in front of established corporates and start-ups when it comes to benefit management. The posts really emphasize the need for an innovative approach to benefits management at start-ups where entrepreneurs like Sourabh Bhatia always need to look for an opportunity to surprise their employees by making them experience small moments of joy by capitalizing on the religious and cultural diversity of employees.

But such practices, do they help the companies build a cohesive teams which appreciate diverstity? and what extend such practices enable them to be more collaborative in their tasks and assignments?

Looking at Debajoyti's post we get the feeling that Laptops can motivate employees. The only practical theoretical problem we face is, "where do we place laptop in Maslow's hierarchy?" The prices of laptops have fallen so sharply over the years and the fact that they occupy so little space compared to a desktop, every organization would like to provide a laptop to save costs (read "space" is cost for organizations).

However, this post brings us an important question as why do companies have differential benefits treatement to different categories of employees?

Many companies realize that the cost of providing a bouquet of employee benefits is increasingly high for the organizations to the extent that it is one third of payroll costs for many organization.

Although employee benefits have gained currency in corporate world, there are several questions remain unanswered.

1. Do organizations give much importance to benefits management because of the cost of employee benefits have raised significantly?

2. In what way "employee benefits management" provide competitive advantage to organizations?

3. Do employees place "high value" on the benefits received or do they merely look at them as entitlements or just feel good factor as stated by our anonymous marketing executive from Forbes Marshall?

Posted by SSG at 6:44 PM Links to this post

Post by Pallavi..

Pallavi said...

With the retirement of baby boomers, shifting attitudes of younger workers and increasing dominance of women in the workforce - coupled with the potential labor shortage - companies today face escalating demands to better attract, retain and develop high-potential and high-performing talent.

Compensation alone will not retain and attract top talent. The emerging strategy is a combination of benefits including compensation, benefits, performance and recognition incentives, work-life and career development opportunities.

Because benefits help support the corporate business strategy and create the desired culture, it’s critical for companies to define a total benefits philosophy that articulates the objectives and priorities for each of the benefit components. An effective total benefits program includes a variety of monetary and non-monetary recognition programs. The key emerging practices that companies adopt fall into the areas of retirement benefits and performance management.

Five years ago, broad-based equity compensation — like stock options — was widely used, but with the stock option expensing rules, companies have been limiting their use. However, for executive levels, non qualified deferred compensation plans and supplemental executive retirement plans (SERP) are often used to reward executives for the long-term success of the company or as a retention vehicle. As companies are looking for ways to develop their internal talent, some are adding formal career planning, while some are considering adding competency-based performance management and the use of multi-rater feedback.

The one-size-fits-all approach is no longer applicable in the development of benefit programs. With the multi generational workforce, companies need to design benefit programs that retain and motivate a diverse employee population. For example, the present generation wants to feel empowered to challenge thinking and express their own ideas. They thrive on change, value entrepreneurialism and are independent, multi-taskers. So what can companies offer to retain and motivate them?

• Provide more flexibility in work hours, compensation, benefits and attire

• Establish formal career paths• Reward for learning new skills or competencies

• Provide multi-rater performance feedback

Companies conduct various surveys in which they take a feedback from the employees on the various policies in place. These are the surveys, which frankly speaking, most of the employees do not genuinely fill in and reflect their ideas in. These surveys serve as the ground for framing policies in the organization. The HR , based on these surveys, comes up with new initiatives. Company Survey responses indicate the following incentives to be most effective in retaining employees:

• Cash bonuses

• Supplemental benefits such as dental insurance or a pharmaceutical plan

• Flex time

• Long-term incentives

Understanding the workforce and the current trends in benefit programs can lead to better communication, improved recruiting and recognition programs and increased retention of satisfied employees.

August 12, 2008 8:52 AM

Post by Mr. Tushar Dilip Paralikar

Tushar said...
In this world of cut throat competition, definitely attracting the talent and retaining it has been one of the herculean tasks for the corporate sector.

As I am associated with IT Sector for past 3 years now, I would have certain level of comfort to speak about the role of services & benefits in IT.

Following are the basic Services and Benefits which a common IT Professional expect from the company:

* Provident Fund and Gratuity

*Medical Facilities for Employees and their dependants by providing Insurance Coverage and fixed amount for medicals expense.

* LTA, Facility of Company Guest Houses at different tourist destinations.

* Learning Opportunities to grow personally as well as professionally.All major IT companies now provide ample learning opportunities. Many technical certifications are now company sponsored. Foreign Language Sessions. All IT majors have tie-ups with reputed educational institute for part time courses like MS/MTech/ MBA

* High Performance reward in terms of perks or Employee Stock Options.

* Profit sharing with all the employees in terms of different variable pays.

Apart from all above mentioned services and benefits, from HR perspective, Talent should be categorized as per different age groups.

Young professionals would always get attracted towards higher pay packages and onsite opportunities. Young professionals would hardly care about Provident Fund and Gratuity. Younger professional in age group of 22-30 would always have more inclination for onsite exposure. In order to retain the young talent, they should be given pay packages as per the industry standards and onsite exposure on a short term basis if long term is not possible. Obviously but some contractual binding is necessary so that the employee can not resign from the companmy immediately after the onsite trip. This could be a win-win situation for both employer and employee.

Well, if you want to target middle aged IT professional, they would seek for stability and responsible positions. In order to attract and retain Middle aged professionals, they should be given benefits like Children Health Care Program, Family Medical Checkups with concessional rates. On a professional front higher positions with appropriate skill sets should be given. If necessary some new positions based on different types of skill sets should be devised.

August 12, 2008 6:58 AM

Post by Bijen Pattnaik

Bijen Pattnaik said...

It's nice to know that people like Saurav Bhatia are doing something new which we don’t get in a big corporate. This I am saying because I ve worked before and with many people like Saurav..In our snacks session one the most important topic to discuss among us was abt the company policies, benefits.. and all the time we found our company in a deficit side and other companies better than ours. But As the grass always looks greener on the other side the benefits of the other companies are like a GAZAR....wh attracts u then u r trapped...People like us dont bother abt the gr8 benefits like insurance, LTA, Reimbursement, etc cuz these things are offerd in almost every company. so in what way we as a company is different from others!!!

As Madhu said earlier those benefits are good but they are very generic in nature...Now my congratulation to Saurav not only for his success in establishing a company of his own but also for implementing the small small things which we were deprived while working together in a big corporate. Taking the teams to a movie together ll give us tremendous belongingness than the hi fi insurances...Yesterday I attended one session by one of the prominent person of Infosys...What I heard frm him was quite interesting but dont know how much this is liked by the employees...For example they organize various events (rangoli,football match, cricket match, n many competition, etc) but can somebody tell me how many are truly interested to participate in these kind of events. Did we take a consensus from the employees who are the ultimate stakeholders for whom these things are done for organizing these events!!

Why people like Saurav are not happy with the "So called pen n paper" policies/benefits of big corporate!! n now they are implementing these things in their small but growing organizations!! Or is it the agreement between the big corporate to offer the same n generic benefits... When they ll differentiate themselves...Now its time to get some practical experiences of people who can site about some differentiating factor...abt their organization....I ve no offence against ne of these big organizations but my only concern is when they ll come frm the top of the ladder to listen the employees who are at the bottom of the pyramid to listen what exactly they want!! there are many good things to say abt all abt these organizations....I too respect Saurav for respecting the cause for which I left my old organization...that to go for higher studies...wh is highly discouraged in these organizations for their opportunistic behavior n bounded rationality...when they ll also make policies which ll make the employees feel like they belong(truly not only in Payroll) to the company....This is really a serious issue to think over n discuss...where we can know abt the prevailing benefit structure across all the corporation starting frm small to big...IT to manufacturing....At the end this is for the people like us who are the employees and base of these big companies....

August 10, 2008 2:17 AM

Post by Saurabh Bhatia

Saurabh Bhatia said...
In small companies like mine, the as the average age is 23, my policies are all inline with the kind of target Audience. Group Insurance, Provident Funds are although important, but are not seen by them in the big picture.Apart from the mentioned long term benefits, they get many short term benefits from time to time.Some of them which I work out is:

"One Movie Per Month"
"A Team Outing, can be lunch or a picnic"
"Travel Allowance, like Bus Pass or Train Pass"

There are several other things like training, attending knowledge sessions, for which I give them ample time to attend and grasp new concepts. This helps them with their personal growth.

Plus we also hold small parties on all the festivals as there are people from all the religions in here, so people feel at home. All in all we have been affected by attrition but we respect that because it was for higher studies, which is something which we cant stop.

However, I have faced many bad policies in Satyam, where everything is only on paper.

August 10, 2008 1:05 AM

Post by Madhurima Acharya

madhurima said...
Towers Perrin is a global professional services firm that helps organizations around the world optimizes performance through effective people, risk and financial management.

The firm provides innovative solutions to client issues in the areas of human resource strategy, design and management; actuarial and management consulting to the financial services industry; and reinsurance intermediary services.

The firm has served large organizations in both the private and public sectors for over 70 years. Our clients include three-quarters of the world’s 500 largest companies and three-quarters of the Fortune 1000 U.S. companies.

Starting from business plan to the performance, the Towers Perrin Total Rewards Effectiveness Blueprint talks about attracting and retaining talent on a broader organizational level. One read through the pictorial representation would make you feel that this is mostly same in one and all companies.

So, From Understanding to Action Plans: what do multinationals do differently? That would, and will be, a debatable topic.

Some points I could lay my hands on are :

Organise HR to support§ an integrated approach to Talent Management: dedicated TM function or senior professional within corporate HR, ensuring process visibility and status in the organisation

Establish Leadership Competencies and a clear definition of§ talent to build common language and a favourable environment for talent development

Core Talent Management requirements lived in the same way by§ all operating units in multinationals (timeline, process, tools).

Talent§ Management Councils (cross functional, cross regional) owned by senior line management supported by HR to share talent information in an integrated way.

Utilising Technology as a Talent Management Integrator (to combine and§ record consistently performance management and potential evaluation, succession planning and reward) Measure Talent Management Effectiveness (scorecards,§ employee surveys, metrics)

The IT industry being people-oriented, what differentiates the best from the rest is the “quality of human capital” in every organization. While there is plenty of talent available, the difficulty comes in finding the talent with the “best fit” to the organization. Potential employees would like to associate themselves with companies which have a “brand” of success, leadership, people development initiatives and also instill a deep sense of pride and commitment.

With increasing global competition and a more mature work environment, Indian IT companies have also started looking at this facet of branding.

This branding, called Employer branding is all about the company’s value in the market, a timeless process that, in today’s scenario has gained even more significance. It is essentially a combination of the reputation of the organization, the career offer and the corporate culture existing in the company.
August 9, 2008 8:58 PM

Post by Mr. Debajyoti Chatterjee

Debajyoti Chatterjee said...
In our organization too, off late the HR has started some Fun activities amongst emloyees, to break the monotony of work/work pressures and provide the employees with a more relaxed/encouraging R&D environment.

Moreover many of the employees have been given Laptops, which was earlier given only to the high level managers, all of it just to motivate employees. Also as part of the HR policies all employees of our company are covered under a Mediclaim policy of 2 lakhs and an Accidental policy of a minimum of 45 lakhs, all this paid for by the Co, this is something which i haven't seen in many Cos.

All this have been successful in retaining employees, and controlling the attrition rates.

Debajyoti
PTC Softwares India Ltd.

July 31, 2008 4:41 AM

Post by Anonymous

Anonymous said...
In my organization, which is purely a Sales and marketing driven company a lot of benefits viz a viz a laptop, car and accommodation are now being doled out.

Attrition rates are quite high and there is fear of poaching from more reputed business houses like Thermax. Keeping competition in mind the HR is taking extra pains to ensure that attrition levels are kept as low as possible. A bus service which was previously absent was started recently to ensure further employee satisfaction.

Benefits which brings in a feel good factor, to a large extent do help in retaining talent though it must be coupled with a good working environment which fosters leadership.

Anonymous
Marketing Executive, Forbes Marshall

July 31, 2008 3:14 AM

Post by Mr. Mansoori Lal Kesarwani

Mansoori Lal Kesarwani said...
the process of attracting an employee starts from the release of an advertisement inviting candidates to join an organisation. at this stage the profile of the organisation, nature of job responsibilities and an assurance for performance linked and industry matching compensation together with opportunity for career growth opportunity are the most important points to an aspiring candidate.

besides direct monetary compensation (like salary and bonus etc) and indirect incentives having monetary value for the employee (like medical facilities, insurance cover, etc), non-monetary facilities (like flexi work schedule, training opportunities, etc) also matter very much because they go a long way to enable an employee to balance his job and family responsibilities.

loyalty of an employee to his organisation does go a long way to retain him within the organisation. for this the ability of the superior to identify the skills of his subordinates (say by asking him to work independently), groom him for higher responsibilities (say by asking him to analyse and solve a problem) and get him exposed to more challenging opportunities (say by rotating him to more complex job role) is very important. the higher management is also equally responsible to structure the organisational systems for identification of such employees. periodical competency tests, group discussions and conferences are some of the tools to be used by the higher management.

a human resource executive would definitely like to ensure the above in his organisation.
July 30, 2008 12:13 PM

Post by Bijen Pattnaik

Bijen Pattnaik said...
I would like to agree with the hard fact that all organizations are providing the same type of benefits. If I look as a neutral observer, I find these benefits like Medical, Life insurance; travel, Hotel facility etc are very generic in nature. All organizations provide more or less the same. As I have worked for a couple of years in a company of IT industry I find my old organization in no way different from rest of the organizations on the basis of Benefits.

I believe the only thing matters while switching a job is the salary hike at the time of switching. It’s a 33% hike generally. Currently I am in touch with many of my friends who have already switched n few who are still in the same old organization. The experience of both these categories is same regarding benefits. Some lucky guys got some good projects and few poor fellows got some horrible projects, as in the sense of work culture (late night work, team mate behavior, superiors’ attitude).

As I have experienced one of an IT industry I would like to comment on this industry in specific. I have seen many people staying in my old organization for a long time. Several times I had tried to find out the reason of their loyalty. Is it the horse riding club or the swimming pool facility or the club facility or the free ac multi gym facility making them stays in the organization for so long years? As a fresher these things have obviously fascinate anyone but later when he/she ll find out these things are available in all the other companies, the only differentiating factor will be package or salary or onsite opportunity. Apart from these benefits I believe the organization culture matters a lot in deciding the long term stay. I can say this after experiencing a company of some other industry like manufacturing. The kind of culture you develop around you will be like the benefits you are having. The freedom in working or independent working style matters a lot. Many companies provide or facilitate the regular get together, arrange some games, provide the opportunity to explore your topic of interest. This may be considered as the part of the benefits.

Again I will say after few or some ten fifteen years of working in any organization money of compensation will not matter a lot for anyone. At that point of time people will look for long term employment. If at that point of time they will be provided some good facilities which no other organization provides them (individually) the obviously these people will stick to the organization.

So my question at this point is if for the new joinees these companies providing any special kind of benefits like fringe benefit tax which some other company may not be providing, which is becoming the cause of their long term stay in the organization. So if any one can say about these differentiating factors on the basis of benefits then it will be nice to know the true facts.
July 18, 2008 7:55 AM

Post by Byzantine

Byzantine said...
Although organizations, specially those in the services sector, began to sit up and take notice of the increasing rate of attrition from quite some time ago, it is only a select few that have moved beyond the almost "standardized" benefit plans (the ones which every Tom Inc, Dick Inc and Harry Inc provide) and have come out with innovative ones of their own.

A leading IT/ITES organization based out of Gurgaon did a profile study of their employees and found that a majority of them were in their 20's and early 30's and with partners (married or otherwise). One of their benefit plans involved dishing out two tickets for a weekend show in PVR Priya. Similarly, another one based out of Bangalore found that many of their managers had young kids, and hence the organization started with a creche facility of its own.

One can find such examples in the corporate world, however surprisingly the number of instances of organizations adopting such innovative benefit plans, though on the uprise, is still few and far between, specially in India.

A friend of mine was recently looking to book a car in order to save some tax, but his organization's policies didn't let him book one that was priced beyond 6 lakhs. Apparently, this limit had been in place for a couple of years. Now 6 lakhs might have been decent two years ago, but in today's condition of spiralling prices, it might not be enough. Failure on the part of the organization to raise that limit left my friend with a below par car and a peeved wife, and the organization with a dissatisfied employee.

I believe that organizations have to be innovative now, not just in their marketing strategy for their external customers, but in their marketing strategy for their internal customers as well. Today, if an organization tells me "Come to me, I have medical benefit plans and insurance plans for you", I would probably just yawn and show it the door, coz the last organization told me the same thing, as did the one before that.
July 14, 2008 8:55 AM