The survey found that the top three issues keeping reward professionals awake at night were: (1) the pressure to drive performance while cutting costs, (2) problems attracting the right people, and (3) not having a clear reward strategy. Respondents indicated that having up-to-date best practices would most help them in their day-to-day jobs. Career development opportunities and long-term incentives were seen as most motivating for employees. However, many respondents felt their reward strategies were not well aligned with organizational strategy or culture. Benchmarking pay was still viewed as the main way to measure success of a reward program.

1. What‟s keeping reward
professionals awake at night?
Global reward pulse survey results
MARCH 2013

2. “Reward managers tend to
follow the market when
deciding pay. But as the
pressure to perform grows,
they need to support the
business strategy more”
Nick Boulter, managing director,
global reward services

3. Raising performance while lowering
costs is a worrying balancing act
1. Which of these reward issues is most likely to keep you awake at
night? (Respondents chose one answer)
The pressure to drive performance while cutting costs 19.74%
Problems attracting the right people for the organization 17.11%
Not having a clear vision behind your reward strategy 11.84%
Falling employee engagement 10.53%
Worries about over- or under-paying your people 9.21%
Managing change and complexity 7.89%
Good people leaving the organization 7.89%
Not enough good leaders and potential leaders 6.58%
Getting access to the right data, and interpreting compensation data 3.95%
Other 2.63%
The management of job evaluations 1.32%
Not being as innovative as the competition 1.32%
Growing regulatory demands 0%
0% 5% 10% 15% 20% 25%
Other:
Scarcity of skills
Retention
© 2013 Hay Group. All rights reserved 3

4. Knowing what‟s best practice still
gives people the edge
2. Of the following options, which one would most help you in
your day-to-day job? (Respondents chose one answer)
Being up-to-date on best practice 29.87%
Supportive leadership 15.58%
Having the right skills and expertise 12.99%
Enough time to look at the bigger picture 11.69%
Access to market data 11.69%
Clarity about organizational roles and responsibilities 7.79%
Knowledge about new trends around the world 7.79%
Other 1.30%
I‟ve got everything I need 1.30%
0% 5% 10% 15% 20% 25% 30% 35%
Other:
Self-driven team members
© 2013 Hay Group. All rights reserved 4

5. “In these difficult
economic times, offering
good employees a
clear career path is
a very strong part
of total reward”
Shaun Barnes, reward practice leader for
Southeast Asia, Pacific, Middle East and Africa

6. Developing people‟s careers motivates as
much as a well communicated total reward program
3. In the current economic climate, which aspects of a total reward
program do you think would best motivate and engage your employees?
(Respondents could choose more than one answer)
25.00%
20.44% 20.44%
20.00%
15.47%
15.00%
11.60%
11.05%
10.50%
10.00%
6.08%
5.00% 4.42%
0%
0.00%
A good Annual Benefits, Long-term Career Flexible Other All of it – well Other
base salary performance eg a car incentives development working non-financial communicated (tell us more)
-related pay allowance opportunities arrangements rewards and aligned to
business
strategy
© 2013 Hay Group. All rights reserved 6

7. Four out of 10 respondents think their
strategy isn‟t in sync with the organization‟s
4. How aligned would you say your current reward strategy is to the
strategy of the organization? (Respondents could choose more than
one answer)
50.00% 46.67%
45.00%
40.00%
35.00% 33.33%
30.00%
25.00%
20.00%
15.00%
9.33% 9.33%
10.00%
5.00%
1.33%
0.00%
Very well aligned Quite well aligned Not very aligned Not at all aligned Other
Other:
Unknown
© 2013 Hay Group. All rights reserved 7

8. And almost half say their strategy isn‟t
in sync with the desired work culture
5. How aligned would you say your current reward strategy is to the
desired work culture of the organization? (Respondents chose one answer)
50.00%
44.44%
45.00%
38.89%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00% 8.33%
6.94%
5.00%
1.39%
0.00%
Very well aligned Quite well aligned Not very aligned Not at all aligned Other
Other:
Unknown
© 2013 Hay Group. All rights reserved 8

9. “People increasingly
need to make the
business case for reward
– and that means looking
at cost-effectiveness as
well as benchmarking”
Carlos Siqueira, reward practice leader
for Latin America

10. Benchmarking pay is still seen as the
most obvious way to measure success
6. How do you know that your reward program is working?
(Respondents could choose more than one answer)
Pay levels compare favorably with the competition‟s 21.97%
We attract, motivate and keep good staff 21.21%
Employee engagement has gone up 18.18%
Higher productivity, sales or profits 15.15%
We don‟t really know 11.36%
People see our brand more positively than before 8.33%
Other 3.79%
0% 5% 10% 15% 20% 25%
Other:
There is lots to do, the comp and ben area is new for the company
We have gone through a significant period of change with the integration of two businesses, so it is still early days with regards to reward aspects
We lose to companies that are out of the comparator sphere
Value for money
© 2013 Hay Group. All rights reserved 10

11. Nearly four fifths see a clear link between
reward, recruitment and retention
7. In your organization, how strong would you say the link is between
reward and attracting/keeping the right people?
(Respondents chose one answer)
40.00%
33.33%
30.00% 28.00%
20.00%
20.00% 17.33%
10.00%
1.33%
0%
0.00%
Very strong Strong Quite strong Not very strong There‟s no Other
noticeable link
© 2013 Hay Group. All rights reserved 11

12. “Organizations can get
huge benefits – in cost
and engagement terms
– by tailoring their reward
to the needs of different
employee groups”
Nick Boulter, managing director,
global reward services

13. Tailoring reward programs to suit different
generations remains a minority pursuit
8. Does your organization tailor its reward programs for different
generations of employees (eg baby boomers, generation X and Y?).
Respondents chose one answer
No and we‟re not planning to 40.54%
No but we‟re planning to 24.32%
I haven‟t heard of that approach before 13.51%
We try to but we‟re not there yet 13.51%
Yes we do 5.41%
Other 2.70%
0% 10% 20% 30% 40% 50%
Other:
Differentiate for some categories on years‟ experience
Unknown
© 2013 Hay Group. All rights reserved 13

14. Six out of ten respondents are happy
or fairly happy with their incentive plans
9. How happy are you with your incentive plans (eg bonus and
share plans)? Respondents chose one answer
Very happy:
Very happy: we need them, and they‟re
we need them, 17.65%
aligned to performance
and they‟re …
Fairly happy: we need to have them from a market perspective,
44.12%
and we get what we can out of them
Not very happy:
Not very happy: they aren't really working for us and
they aren't really 27.94%
we'd like to review them
working for us and…
Not at all happy:
Not at all happy: we're not sure we
we're not sure we 4.41%
need incentives at all
need incentives at all
Other
Other
5.88%
(tell us more)
0.00% 10.00% 20.00% 30.00% 40.00% 50.00%
Other:
Needs more work
The owner of the business is happy but from a reward perspective I don't think it delivers what it should
We don't have incentive plans
As an NGO incentives schemes are not that relevant
© 2013 Hay Group. All rights reserved 14

15. Traditional expat packages are still as
popular as globally consistent bonus schemes
10. If you work for a global organization, which of these do you offer
employees? (Respondents could choose more than one answer)
Traditional expat packages, where the expat‟s salary issalary is based
Traditional expat packages, where the expat‟s based on their
25.40%
home currency, currency, plus a standard standard incentives
on their home plus a range of range of incentives
A bonus scheme based on the same percentage of salary, wherever
A bonus scheme based on the same percentage of salary,
25.40%
people workwherever people work in the world
in the world
A „local-plus‟ package packagesalary with fewer benefits,benefits, or
A „local-plus‟ (a local (a local salary with fewer or benefits 17.46%
converted to cash allowance) to cash allowance)
benefits converted
A global long-term incentive program 15.87%
A global salary policy, where paywhere pay is benchmarked against
A global salary policy, is benchmarked against the same 11.11%
market position, regardless of country
the same market position, regardless of country
Other 4.76%
0% 5% 10% 15% 20% 25% 30%
Other:
A global variable bonus scheme where target per cent is determined for each country
Global compensation philosophy benchmarked against market position in each respective country
Global pay policy, benchmarked against the unique markets to provide fair and responsible base salaries and benefits with focus on health and allowances
© 2013 Hay Group. All rights reserved 15

16. Respondents are hungry for information
about a wide range of topics
11. Which of these reward issues would you like to know more about?
(Respondents could choose more than one answer)
How rewards can help you engage and keep your best people 10.83%
Creating a reward strategy that reflects and supports your business strategy 10.83%
How to evaluate the effectiveness of an incentive plan 10.56%
How to see reward as an investment (and measure its returns) 8.89%
The link between pay and organizational culture 8.06%
How to know if your reward strategy‟s working 7.50%
How total reward can enhance your employer brand 7.22%
Why communications can make or break your reward strategy 7.22%
Linking rewards to individual and company performance 6.67%
The changing face of global reward 5.83%
Executive reward and corporate governance 5.83%
The implications of different types of incentives 5.56%
How to keep employment costs down in a recession 4.44%
Other 0.56%
0% 2% 4% 6% 8% 10% 12%
Other:
The role of rewards in an NGO for national staff
Something on where benefits can/should go next
© 2013 Hay Group. All rights reserved 16

17. And there‟s a healthy appetite to hear
more about executive reward, too
12. Which of these areas of executive reward would you like to know
more about? (Respondents could choose more than one answer)
Linking pay to performance 19.35%
Designing short- and long-term incentives 17.97%
How to simplify executive reward 13.82%
Corporate governance and executive reward 10.60%
Making the business case for executive reward 10.14%
Executive pensions 7.83%
Managing reward during and after a merger or transaction 7.83%
Keeping a lid on executive pay 6.45%
Managing executive reward through a stock market launch (IPO) 5.07%
I‟m not interested in executive reward 0.92%
Other (tell us more) 0%
0% 5% 10% 15% 20% 25%
© 2013 Hay Group. All rights reserved 17

18. Want to know more?
Email your question to
rewardservices@haygroup.com