Redefining the traditional approach of Compensation & Benefits
Most companies have redefined the HR functions of talent acquisition through employer branding or re-engineering; HR operations through shared services or data analytics; and performance management through no ratings & ranking systems. However, no company has yet attempted to redefine the most controversial HR stream of “compensation & benefits”.
Most HR streams have become transformational in nature but from time immemorial compensation and benefits has been transactional – “you do good work you get salary; you do great work you get bonus”
It is about time we take a stand to revolutionize the most controversial segment in the HR space and gravitate towards giving our people “WEALTH & WELLNESS” that equates to “you do work, you get a return for your hard work and you don’t get benefits but a work-life full of wellness and wellbeing.”
- How would you feel if you don’t get a salary slip but a passbook that shows how your money has multiplied while doing your best work with a company?
- How would you feel if your benefits not only give you a secure workplace but take care of your long and short-term needs, your family’s needs and your personal goals?
- How would you feel if your family vacation is funded by your company?
- How would you feel if your next house is commissioned by your new employer?
- How would you feel if your meal vouchers convert to restaurant vouchers, making dining out with your loved ones even more pleasurable?
This blog has some ideas that will prompt you to think differently about your salary and relationship with your employer. Read on…
- People who work at XYZ build Wealth as opposed to drawing salaries
- They don’t draw bonuses but draw a lump sum amount of money at 3, 5, and 10-year tenures (a la wealth management plans style)
- We don’t give benefits to our people; we work on their wellness and wellbeing.
- It positions you as a pioneer in the industry looking to reinvent staid HR programs and policies
- Comp and Ben is transactional in nature (you do work, you get salary) however wealth and wellness is transformational in nature (you do work, you get a return for your hard work)
- This program acts as a retention program as people become interested only if they complete the term, else they just get the lump sum money or sum assured w/o interest
- It is a program that cares for our people’s short term (everyday expenses, dining & travel) and long term needs (car, house, pension, child insurance etc.)
- No yearly bonus payouts are required. Only an incremental increase in current account salary depending on inflation and tax structure. So no fuss of who gets what, because everyone’s money is multiplying!
- Current account passbook for the money they need to meet monthly expenses
- Reimbursements should be tied to need-based credit cards like Petro cards that give them cash back, payback, gifts as further redemption on money spent (again compounding the returns they draw from your company!)
- Wealth account passbook with the money they want to be invested for 3, 5, 10 years.
People will get Passbooks and not salary slips:
- This program would need Finance teams’ intervention, they will have to tie up with solid/credible wealth management firms like ICICI Prudential Life and Citibank that will help channelize our people’s investment into. The advantage over individual investment is that the sum assured of our people in totem will be in millions so the return on this investment will be higher and more rewarding.
- Companies could further tie-up with housing projects by HDFC, Indiabulls or housing.com to create homes specifically for your people a la car lease style.
- Or build child investment plans with leading players like ICICI that cater to the budding needs of your employee’s
- People these days are spending a ton of money on vacations. Therefore MakeMyTrip or Cox n Kings can be roped into providing company-specific vacation plans. Where people can create a recurring deposit account and save money on a monthly basis for their travel. Our people can then redeem family holidays any time of the year (without waiting for their bonuses).
- The possibilities of this approach to rewarding your people are endless!
The crux of this new approach is putting the changing needs of your people, millennials, and consumers at the core of redesigning the compensation and benefits program.
I would urge HR leaders on this forum, reading this blog to rethink the most important aspect of “why people work for an organization?” If people are hired for their passion, craft, attitude and the impact they can make, then we need to find ways to reward and recognize their efforts in equally desirable and pleasant ways.
This concept is bold, radical and a very novel of looking at rewarding our people. No one in the industry is talking about it yet and true to its philosophy it will break many boundaries in HR.