By Nicol Mullins, Chartered Reward Specialist and Exco Member, South African Reward Association(SARA)

COVID-19’s most lasting effect may be prompting us to think differently. For me, this global crisis provides a heaven-sent opportunity to rethink the way we look at remuneration and, more broadly, work.

Some companies are already thinking differently, as shown in a dipstick survey recently conducted by SARA (our COVID-19 Remuneration Actions Survey). It shows that 41% of respondents have implemented senior staff pay cuts, and some companies are cutting short-term (27%) and long-term incentives (23%).

Twenty-five percent of respondents have still not made a decision about short-term incentives, and 43% are pondering long-term incentive cuts, so presumably some of these might also elect to cut executive pay or put incentives on hold.
These are prudent measures designed to preserve cash against an uncertain future, but they also send a powerful message to the whole organisation: We are in this together, and we will make sacrifices to keep everybody’s job safe for as long as we are sustainably able to.

But there’s also plenty of increased news report frequency around organisations considering, or implementing retrenchments. Bizarrely, this approach is often welcomed by the market, and stocks often rise when retrenchments are announced.

I would argue that this is simply indicative of the short-term thinking that bedevils our economic system, a finite mind-set opposed to an infinite mind-set.

If you think about it, retrenchments are negative because they result in a catastrophic loss of institutional memory and valuable skills, amongst several other negative knock-on effects. The company is weakened, and ill-placed to take advantage of more favourable economic conditions when they come.

We are always hearing about the war for talent and how long it takes to get people trained and productive. Getting rid of the people so laboriously acquired and trained can never be positive if one takes a long term view, as any board and exco must. It also sends a highly negative message that people are expendable in the quest for short-term gain.

What if, rather, the approach evident in our survey was taken further? What if the company’s leaders levelled with staff and said, “We need to cut still more costs”? Retrenchment and employment are not alternatives, they are the ends of a long continuum. Most people would take a pay cut of some kind to retain their job, and the sense that the company is a family that looks out for its members would be enhanced. Such a company would come out of the lean times with the skills it needs to grow—and, more important still, a workforce with the right attitude.

This question of attitude is crucial. Companies spend millions surveying “employee engagement” and trying to improve it because an engaged employee is a productive employee and one who will willingly volunteer additional discretionary time and effort towards company success. The way companies approach this crisis—retrenchment or coming up with a shared solution—will play a large part in driving better employee engagement and ultimately long-term sustainability and success.

Playing the long game
In fact, wouldn’t it make sense to rethink our whole approach to remuneration? One thing that’s struck me forcibly over the past months is the role of medical and nursing staff in fighting COVID-19. They are performing an essential role at great personal cost with a high risk of infection and stressful working conditions.

In terms of the conventional approach to remuneration, assumed to be governed by supply and demand, they should be commanding higher pay. But those working on the COVID-19 frontline are not being paid extra (Cuban doctors excepted, perhaps) because, at base, they and their employers have a shared purpose: saving lives.

Compare the conventional, friction-filled remuneration negotiation in which employees negotiate the highest possible pay, while companies seek to get the skills they need to fulfil their strategic objectives at the best possible price.

But when there’s a shared purpose between employees and their employers, the remuneration discussion takes place on a different level.

In fact, if people feel that their purpose in life is aligned with what their employer wants them to do, or that their job gives them a purpose, their primary focus will not be the size of their salary but rather the satisfaction they get from doing their jobs.

Such employees will “go the extra mile”, will apply their minds to improving the business and, yes, will take pay cuts when necessary to preserve the company—and the jobs of themselves and their colleagues.

Organisations and employees that align themselves around a shared purpose rather than financial targets are in a better position to adapt to what everybody agrees is a highly volatile, uncertain, complex and ambiguous (VUCA) business environment.

They have resilience built into their DNAs because their people are united in pursuit of a common goal. Such companies will survive COVID-19 and prosper again; for the rest, the future is not so certain.

ENDS
 
MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za 

For more information on SARA please visit:
Website: www.sara.co.za 
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association

Internationally, there is a growing trend to reduce executive pay in response to the current COVID-19 crisis.

South Africa is following the trend, with several private sector companies voluntarily announcing reductions and donations in executive pay, among them Woolworths, EOH, FirstRand, Vodacom and Sibanye.   

The South African Reserve Bank’s Prudential Authority, the banking sector regulator, has asked banks to avoid paying ordinary dividends or executive bonuses this year and of course, our President announced in his more recent addresses to the Nation that cabinet members will take a 1/3 pay cut and contribute this to the Solidarity Fund.

Martin Hopkins, President of the South African Reward Association (SARA) and Master Reward Specialist, says getting executives to lead by voluntary example by accepting pay reduction at this time is the appropriate thing to do from several viewpoints.

“As a gesture of solidarity at this time, executive pay sacrifice can be a powerful morale booster and could provide a way to repair some of the damage caused by the perception that executives are over-rewarded” he says.

“Executive pay cuts, along with dividend freezes, also make sound business sense because, in uncharted waters like these, conserving cash is going to be key to survival - and thus to keeping as many jobs as possible.”

Dr. Mark Bussin, SARA executive committee member and Master Reward Specialist, says: “If there is one thing that the Corona Virus crisis has done, it has united us against a common enemy. I have seen so much goodwill between communities. I almost want to be thankful that we got this wake-up call. Perhaps we can explore this comradery further by each organisation seeing all employees in the same boat and showing more sympathy and empathy towards each other. This should include a deliberate effort to narrow the wage gap. Let’s not waste a perfect crisis”.

As Mr Hopkins points out, executives are likely to be able to better weather a significant reduction in their income than low earners who subsist from pay-check to pay-check.

He expects that most variable pay, which makes up a significant portion of the remuneration of top executives, would be curtailed—although most performance targets are in any event unlikely to be met if the economic fallout is as bad as predicted.

He suggests that executives could be incentivised to lead their business to survive the crisis and thrive in the future by means of restricted share awards rather than cash incentives, even though these would have the effect of diluting the assets of existing shareholders.

​Any such awards should be granted prudently to mitigate the perception that executives are taking undue advantage of currently depressed share prices.

Looking beyond the short to medium term, Mr Hopkins says he does not foresee that these emergency executive pay cuts will necessarily translate into a permanent reduction in the wage gap between a company’s executives and its lowest paid employees.

He believes that ultimately pay is governed by supply and demand, as well as the imbalance in negotiating skills between executives, company remuneration committees and shareholders.

These factors will not disappear, and shareholder activists will continue to have limited room for manoeuvre given that shareholder votes on remuneration are typically non-binding.

He speculates that if enough companies close down, there might be a glut of top executives looking for jobs, and this could bring down executive salaries.

Mr Hopkins also comments that the issues of poverty and unemployment may be more pressing issues and drivers of fundamental inequality and suffering than the corporate wage gap.  “At the end of the day, human dignity and well-being is highly dependent on the ability to earn a living wage. We should be focusing our efforts on ensuring the maximum number of people have a job and are earning a living wage,” he says.

Nicol Mullins, SARA executive committee member and Master Reward Specialist says: “There is an incredible opportunity for organisations to unite and build trust.  The call to reduce compensation and contribute to assist others in need is not only answerable by executives, but by all to the level of where it makes sense.  Nothing stops the rest of a workforce to contribute voluntarily.  What we need right now is not the money of a few, but the collective action of many – meaning financial, and through other means.”

“The recent proposal by 65 economists, academics and business analysts for a universal basic income grant of R1 000 for four months also has merit to protect the vulnerable whilst we reboot the economy”.

The work that organisations have done is admirable, specifically around the sacrifices executives are making, but this can be short lived once the crisis is abated if the focus falls away.  The result could mean that the after-effects of COVID-19 is that the wage gap will not shrink because some segments of the population will be affected disproportionately. “Many lower skilled jobs may start to fall away as time progresses and ways of work evolve”, says Muhammed Goolab, SARA executive committee member.

ENDS
 
MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za  
For more information on SARA please visit:
Website: www.sara.co.za 
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association
​

Successful business leaders know they need a solutions-driven mindset to overcome business challenges and to strategically solve problems, but individuals in South African along with the Private Sector are not optimally using their skills collectively to help solve the country’s problems, says Nicol Mullins, Chartered Reward Specialist and Executive Committee member of the South African Reward Association (SARA).

“It’s easy to complain about fraud and corruption – and thereby contribute to the wave of negative messaging that makes people so despondent – but it takes critical thinking, creative problem-solving and innovation to overcome many of the challenges we face. South Africa already has these skills centred in its people. SARA is calling on the private sector to start pooling its intellectual resources and collaborate to solve issues of national importance,” says Mullins.

Don’t look for safety. Create it.
Mullins quotes author and motivational speaker, Simon Sinek, who famously said that instead of looking for the perfect place to work, you should create the perfect place to work.

When it comes to politics and government, says Mullins, contributions made to the solutions in South Africa have – for the most part – been lacking, with many individuals sitting on the fence and taking an outside-in view on the country’s problems.

He says this approach isn’t going to contribute to a better South Africa, and that instead of looking for safety, we need to start creating a space of safety in South Africa. We can all do so, and through our action create pockets of excellence.

“The electricity crisis, for example, isn’t an Eskom problem – it’s a South African problem. The sooner we face that it’s going to take more than a single organisation or the government to get the country back on track, the sooner the road to recovery can begin,” says Mullins.

Stretching resources will lead to innovation
Many companies currently have limited financial resources with which to compensate their staff. As a Total Reward Professional, Mullins says he knows how far and wide these resources need to be stretched to engage staff, but this is the sweet spot where innovation happens.

The effect that COVID-19 will have on the global economy will be long-lasting, South Africa is not insulated from this impact. This unprecedented time in South Africa will bring with it uncertainty but allow people to think out of the box.
Our future will be shaped by our ability to stand together in unity and our ability to solve problems with fewer resources, in a smarter manner.

“When you have limited resources, you are driven to innovate and think within the boundaries forced upon you. With unlimited resources, however, you tend to squander and drift from your strategy. South Africa’s current situation is an opportunity for all of us to be a part of the solution. Collectively, we can solve our country’s problems and make things work again,” says Mullins.

Mullins concludes by saying that enabling and mobilising the country’s skilled resources will unlock the collaboration that is needed to start acting locally instead of waiting for the situation to change.

“Many people are talking about immigrating, but my question to them is: where in the world are things going great at the moment? South Africa has its challenges, but also so many things going for it. The change needs to start with us on an individual level.

We need to shift our energy from criticism to collaboration. Instead of looking towards other people or government to solve South Africa’s problems, we need to start thinking about what we can do.

How can each one of us contribute meaningfully to an already incredible place? Let us work together to #LiftAsWeRise as a collective.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za  

For more information on SARA please visit:
Website: www.sara.co.za 
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association
​

Is it time to sit with your employee for a face-to-face discussion on how well (or poorly) they are performing?
Often, both managers and workers are not overly excited by the prospect of this sometimes awkward event.

“Dreading a performance conversation is generally a sign of a poorly designed performance management system or a manager who needs to be coached on delivering assessments,” says Muhammed Goolab, Exco Member at the South African Reward Association (SARA).

Performance and reward
According to Goolab, there is a strong link between performance and reward, and most organisations adopt a pay-for-performance approach.

So the performance conversation plays an important role in achieving corporate outcomes. It allows managers and workers to engage mutually on what results are expected of the latter and how they are to be achieved.

Typical mistakes
When hosting a performance conversation, managers often make several common mistakes.

The first is mixing the discussion around corporate objectives and career development with that of reward determination. These distinct topics should be dealt with separately to ensure the specific result of each type of conversation is achieved.

The second is approaching the conversation as a top-down evaluation, something that may be intimidating or come across as overly critical of the employee.

Engagement should be a two-way process to promote a mutual understanding between both participants.

Thirdly, managers may be too vague in their communication, using non-specific examples as feedback. This can create dissonance between their intended meaning and what the employee perceives they have achieved or must pursue.

Whether giving feedback, setting objectives or determining rewards, every conversation should follow the SMART principle, that is, outcomes must be Specific, Measurable, Achievable, Realistic and Time-bound.

Lastly, carrying out appraisals as an annual formality without a systematic performance development plan in place renders the exercise meaningless. Performance management is not a once-off event and performance conversations should be held regularly throughout the performance period, and should include informal feedback where necessary. 

Improving the conversation
Having established that the performance conversation is an ongoing dialogue between the manager and the employee, it follows that good communication and assessment skills are essential.

Companies can improve their managers’ capabilities through a rater training programme, where they receive instruction on rating employees and providing feedback in a professional and appropriate manner.

It’s also important to give the employee a voice by allowing them to first engage in a self-assessment of their performance. This will reduce defensiveness and serve as a basis for productive discussion.

While formal appraisals will still take place, informal feedback should be immediate, especially if it is in the form of correction. “If negative feedback has been ‘stockpiled’ for the formal performance conversation, it will only serve to break down the trust relationship between the manager and employee.” says Goolab.

A conversation culture
Handled correctly, a performance conversation can result in enhanced performance, based on shared respect and understanding of expectations between managers and their staff.

“Every organisation should foster a culture of performance among its employees, punctuated by regular frank but sensitive appraisals, as an integral part of their reward programme,” says Goolab.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za 

For more information on SARA please visit:
Website: www.sara.co.za 
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association
​

Research from Grant Thornton and PwC shows that women represent only 20% - 29% of senior management in South Africa, even though they are half the population.

Lindiwe Sebesho, Executive Committee Member of the South African Reward Association (SARA) and Master Reward Specialist, says societal perceptions continue to hold women back from taking up more seats at the boardroom table.
​
“These beliefs may be subconscious, but many people are still of the opinion that men are natural leaders and some even believe that women aren’t biologically wired to be as good at men at certain subjects. All of these perceptions have been proven wrong,” says Sebesho.
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Mandatory quotas to increase female board participation
A recent study published in the peer-reviewed journal “Science of Learning” showed that girls do just as well as boys in elementary- and middle school math tests.

College-educated women now make up the workplace majority at 50.2%, but across the globe, countries have had to adopt mandatory quotas to increase the representation and participation of women on boards.

“In many countries, companies are required to report on the pay disparities between men and women. While South Africa doesn’t yet have mandatory disclosure policies, the government sector has progressed faster than the private sector with efforts towards improved gender diversity at senior management level,” says Sebesho.

She says companies who aren’t focused on transforming will lag in terms of both innovation and profit.

“A 2018 McKinsey report showed that Diversity and inclusion are concepts that correlate to a company’s value and profitability, with growth in sales and earnings at diverse firms outperforming less diverse firms. There’s a reason why the diversity training industry is a USD$8-billlion-per-year market – as having diverse teams pays off.”

The self-promotion gap
Requests for self-assessments are pervasive throughout one’s career from school and job applications to performance reviews, but women fare poorly at this when compared to men. 

A study found a large gender gap in self-promotion – with men rating their performance 33% higher than equally performing women.

“As women, we are conditioned to not draw too much attention to ourselves by downplaying our contribution and achievements. We wrongly assume that our efforts at work will always be recognised and rewarded in a fair and equitable manner and that our hard work is enough. These assumptions contribute to why we’re often overlooked for leadership positions,” says Sebesho.

She illustrates this point by highlighting that men are generally good at seeking out feedback on their work. They do this even in informal settings i.e. they don’t wait for the formal review process. They are also good at forming professional connections that enable them to gain confidence in the workplace.

She makes an example of her own experience where as the formal head of a function, she has worked hard and has often downplayed the effort and contribution she knows she has made.

She has, however, observed how her male counterparts, some of whom she has led through key projects, have made sure that their efforts and contributions are known by the right people and in some cases even going as far as claiming recognition for the work done by others.

She concludes by advising women to be more assertive at the office, provide more favorable assessments of their contribution, performance results and potential future ability, and to master the art of networking.

Women need to stop shying away from seeking feedback and talking about their achievements.

ENDS


MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za  

For more information on SARA please visit:
Website: www.sara.co.za 
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association

The proliferation of freelancing and gig work has seen employers witness a massive shift from traditional nine-to-five jobs to part-time work and independent contracting, known as the gig economy.

Muhammed Goolab, Executive Committee Member of the South African Reward Association (SARA), says employers will need to rethink their reward programmes to align with the digital economy and the disruption it has brought to the employment landscape.

“92% of millennials want to work remotely, and millennials make up 40% of the workforce. Many companies now employ gig workers, but few of them have thought of what it means to include giggers in their overall People Strategies.

If companies want to appeal to millennial and Gen-Z talent, they will need to evolve how they include giggers in their company’s People offering,” says Goolab.

Why include giggers in your company’s Reward Strategy?
Very often, giggers provide experienced and qualified skills on-demand and, according to Forbes, 42% of both large and mid-size companies use contingent workers to meet seasonal demands or project-specific goals.

Not only will a reward strategy geared towards giggers make an employer more appealing, but it will boost the employer’s bottom line.

 “A Reward Strategy that includes tailored benefits for gig workers can form an important part of an employer’s value proposition for the talent they’re looking to recruit. In turn, gig workers at their organisations will feel an increased sense of belonging and mutual achievement, which in turn boosts productivity,” says Goolab.

How to create a Reward Strategy for giggers
Before benefits can be defined, a performance management system needs to be put in place.

“Performance management is just as important for giggers as it is for permanent employees. An example of a performance management system that a major gig economy employer uses is Uber’s rating system for their drivers.

To establish a performance management system for giggers at your company, companies would need to establish performance metrics based on the usual criteria of productivity, quality, customer satisfaction or financial metrics,” says Goolab.

The Reward team would then need to review the non-perm benefits offerings in line with the flexible nature of the gig economy, as the usual benefits of medical aid, life cover and pension contributions would be inappropriate.

Benefits to giggers would need to be well defined and clearly articulated as a value proposition that is different to that of a permanent employee and attractive to a gigger.

 “An example of a financial reward geared towards giggers is a project completion bonus that could be offered if a gigger completes a project on time, within budget, and per a defined quality standard.

One of the gig worker’s most valuable commodities is the skills they bring to the table, making learning opportunities another great incentive.

An even more innovative approach would be to develop technology that connects gig workers with available work within the business or even the wider industry.

The companies who connect with giggers and reward them in smart ways will be the ones benefiting the most from the gig economy in 2020 and beyond,” says Goolab.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za  
​
For more information on SARA please visit:
Website: www.sara.co.za 
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association
​

At the recently held 2019 Reward Awards ceremony hosted by the South African Reward Association (SARA), Clicks Group won the Reward Project of the Year award for the second consecutive year while Nedbank won the Remuneration Report award. Sue Tosh won the prestigious President’s Award.

Attracting, retaining, motivating and engaging employees relies on the innovation and technical expertise of rewards professionals.

The annual awards celebrate the professionals who design reward structures that make a difference in their companies.

Reward Project Award
The 2019 SARA Reward Project award recognised the team from Clicks Group that enabled the company’s aspiration of providing medical aid benefits to all staff, especially their most vulnerable employees not covered by a medical aid scheme.

Clicks Group was congratulated for enrolling over 9000 semi-skilled employees onto a comprehensive medical aid plan, with their membership paid in full by the company.

Since implementation, labour turnover has reduced by 29% and there has a been a significant improvement in overall staff morale.

In this project, Clicks demonstrated how they addressed a core staff need and used their bargaining power to provide a key  benefit for their employees and their families.

The other placed nominees of the 2019 SARA Reward Project of the Year award were MultiChoice in second place, and Investec in third place.

Remuneration Report Award
The winner of the 2019 SARA Remuneration Report of the Year award, amongst an excellent number of nominees, is Nedbank.

Tiger Brands received 2nd Place and Sasol received 3rd place for their submissions.

This award recognises organisations for how well they have demonstrated compliance with the King IVTM principles through clear and concise disclosure of the company’s remuneration philosophy and its application.

Submissions were evaluated by a panel of judges and specific focus was given to how organisations report on the remuneration detail such as fixed and variable pay.

President’s Award
A special President's Award that honours outstanding achievement in the field of reward was awarded to Sue Tosh.

Throughout her career, she has been a highly respected remuneration practitioner at large listed companies and has contributed personal leadership as well as building effective and valuable reward teams within her organisations. 

Sue has built and led a team of highly engaged and dedicated professionals that are part of the Group’s Centre of Excellence in Human Capital, providing advisory services on all aspects of remuneration, benefits, recognition and cross-border mobility enabling the Group’s talent plans. 

During her seven-year tenure at Standard Bank Group, Sue has been instrumental in improving remuneration governance and has made significant improvements to the Group’s remuneration report. 

In this regard, Standard Bank has become the benchmark in the financial sector and was recognised by SARA, winning the award for the Best Remuneration Report in both 2014 and 2018. 

Through the Reward Awards, SARA aims to recognize and celebrate companies who create reward structures that are transparent, fair and responsibly reward employees and executives for their effort.

The association hopes to inspire industry best practice and rewards that help companies and their employees achieve success.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za  
​
For more information on SARA please visit:
Website: www.sara.co.za  
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association
​

In this article, Muhammed Goolab, Executive Committee Member of the South African Reward Association (SARA), answers frequently asked questions about your pay:

Why do my friends get paid more than me if we do the same work
Several factors determine individual pay levels. Some industries pay more for a specific skill or may even pay a premium for skills that they place more value on.

A company’s financial performance, as well as the individual’s performance, can also contribute to different salaries for the same skill.

How do I get more cash out of my salary?
Most organisations in South Africa offer Cost to Company packages, which indicates the total direct and indirect (e.g. pension and medical aid benefits) pay that an employee receives in a year.

Cost to Company packages generally allows employees to adjust some of the benefits of their package, such as pension fund and medical aid contributions.

Lowering your contributions can lead to more cash in your pocket each month, but employees who do this often sacrifice some of the benefits that they were contributing towards.

It is important to understand the benefits that you want to receive and make sure you are making an appropriate contribution towards your retirement and healthcare each month.

Why is my salary increase less than the medical aid increase?
The drivers that determine salary increases within a business are different from the drivers behind medical aid increases.

Medical aid inflation is defined as the annual increase in claims received by medical schemes and has generally increases greater than CPI.

This is driven by the costs for medical services rising, as well as the demand from clients on medical services. 

Salary increases are driven by company performance, individual performance, union agreements, industry trends and salary market movements.

Why do I have to be on a company appointed medical aid?
Whether or not an employee must belong to a company appointed medical aid depends on the company you work for.

Companies that make medical aid compulsory for their staff are typically able to admit new members without paying late joiner penalties or being subjected to waiting periods.

Medical aid schemes would typically not grant automatic membership to new staff without underwriting them unless membership is compulsory.  

What medical aid/retirement fund should I choose?
SARA often gets asked what medical aid plan employees should select. This will differ depending on your individual needs.

Companies that offer medical aid benefits as part of their employment contracts generally have an appointed advisor within the scheme to guide employees on the most appropriate plan for their circumstances and family situations.

Speak to the advisors to make an informed decision. Similarly, retirement fund contributions will differ depending on your needs.

Discuss your retirement goals with a financial advisor to make sure you are on track to meeting your retirement goals.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za  

For more information on SARA please visit:
Website: www.sara.co.za  
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association
 

The days of living like a king or queen off back-to-back foreign assignments are diminishing, and expatriates - or international assignees as they are now called - may receive reduced rewards in the future.

“Companies are increasingly focussed on expense management, and costly assignee lifestyles are susceptible to cuts,” warns Nicol Mullins, Chartered Reward Specialist and Executive Committee Member at the South African Reward Association (SARA).

So what can aspiring and veteran assignees expect in terms of a reward package and will it meet their needs? “It depends,” says Mullins.

Destination unknown
Whether or not an assignee’s package is sufficient will be determined by their eventual location, relative to their lifestyle expectations. The base of departure should be to place international assignees in a similar position, not better or worse off, than what they are currently in.

Those working in developed countries would likely enjoy good public transport, shopping, dining, entertainment, housing, schools, medical care and other conveniences.

But only if their remuneration makes these affordable. Conversely, assignees arriving in emerging market countries could find themselves stationed in remote areas or less-developed cities where, even if they earn well, the quality of life available to them is much lower than what they are accustomed to.

Of course, quality of life is subjective. Middle Eastern cultures may be too restrictive to many female assignees regardless of rewards, while people from sunny climates might expect better compensation to endure bitterly cold regions for extended periods.

Outcomes are pivotal
Ultimately, the worth of a foreign assignment package hinges on what the assignee and the organisation wishes to accomplish from it. Do they like experiencing other cultures or will their earnings go towards early retirement? Are they willing to “rough it” for a few years or do they expect better than what they had in return for uprooting themselves?

Mullins advises those considering international assignments to establish their goals up front and decide if the package offered will help them achieve these goals.

The first red flag is whether or not their prospective employer has an international assignment policy at all. A policy assists in providing transparency, clarity and certainty.

A comprehensive policy
For any foreign assignment to be successful, it must be mutually beneficial to both the employer and the assignee.

Companies should deal with assignees transparently and honestly from the start. They can begin by having a comprehensive policy document in place for each assignment destination, one that articulates the total rewards package, the company’s commitment and what costs it covers.

Astute assignees will ask if this policy document exists and obtain a copy to ensure it clearly lays out how their package will be structured from the moment they accept until their eventual return. This includes what they can expect after they are repatriated, such as continued employment and benefits.

Counting the cost
Then it’s up to the candidate to weigh up the total package against their desired outcomes, not just in terms of lifestyle costs, but also any perceived sacrifices they will make when entering and adapting to their new environment. They should also evaluate the impact of the stay on an accompanying partner or children.

“The business and assignee must consider that any amounts saved or earned will be nothing compared to the cost to both parties if the assignment fails,” says Mullins.

He encourages organisations to engage the services of a professional reward specialist when developing international assignment packages and policies.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za 

For more information on SARA please visit:
Website: www.sara.co.za 
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association
​

“The right balanced total reward programme can assist in reducing absenteeism,” says Nicol Mullins, Executive Committee Member at the South African Reward Association (SARA).

The number of employees taking days off work has risen so much over the last decade that Absence Management is now a standard HR function.

Companies can even buy purpose built software to help them track and contain rampant absenteeism.However, according to Mullins, it is a problem that needs to be solved, not controlled.

“When absenteeism is rife across an enterprise, it may be the tip of the iceberg, indicating a more general dissatisfaction among employees, which might be intrinsic or extrinsic in nature” he says.

Regardless of the cause of absenteeism, researchers of the topic across various industries agree on its detrimental effects to an organisation’s morale, productivity and profitability.

To name a few consequences, not only do employers not benefit from labour they’re paying for, but costs rise as present employees work overtime to catch up, quality is sacrificed, consultants are engaged for specialised tasks, or strategic opportunities are missed because key personnel are not at work or working.

A stressful environment
A 2009 study by researchers Halkos and Bousinakis concluded that absenteeism is related to workplace stress which results in low levels of job satisfaction.

In 2002, researchers de Boer, Bakker, Syroit and Schaufeli offered two theories for absenteeism. Withdrawal theory suggests that absentees are withdrawing from adverse working conditions while stress theory says employees develop stress symptoms because they are unable to cope with these conditions.

How rewards can help
The importance of a meaningful total reward programme in curbing absenteeism cannot be overstated.

“‘Meaningful’ means it must create value for the employees it targets,” say Mullins. That value can be financial, but where workplace stress is the culprit, rewards should be aimed at removing negative catalysts and promoting job satisfaction.

Two approaches suggested by Mullins are to develop clear opportunities for career progression and to foster a sense of ownership in the business.

“Employee-owned and family businesses experience much lower absenteeism simply because there’s a strong sense of belonging and growth potential amongst workers - a sense of ownership.” he says. “A company that can create this reality will experience a reduction in worker absence and improved productivity.”

Companies should also reward the behaviours they want to see. Recognising workers who have been present for a high number of consecutive days sends a clear message to their colleagues that this behaviour is desirable.

However, Mullins warns that any such initiatives can only be effective if they are part of a larger, carefully developed total reward programme, which is both monetary and non-monetary in nature.

Getting rewards right
Engineering the optimal total reward programme for a given corporate environment or culture is a complex task, and today there is a specialised profession that has evolved around the process.

“Companies who throw a few benefits together and expect employees to automatically respond are wasting their time,” warns Mullins.

Reward practitioners are trained in multiple disciplines, enabling them to develop sophisticated total reward packages that promote desirable employee behaviours while supporting corporate strategy.

Organisations wishing to minimize absenteeism can contact SARA for more information on how to engage a certified practitioner.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za 
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