The Find: For compassionate managers looking to avoid lay-offs and retain key talent through the slowdown, one consultancy is offering tips on how to hold down compensation costs without cutting staff levels.- The Source: 10 principles for managing employee reward in 2009 from consultancy Watson Wyatt.
The Takeaway: The NY Times is reporting today that an array of firms including Dell, Cisco, Motorola and Honda are attempting to cut costs without resorting to layoffs. If you are likewise facing reduced revenues and limited options, but want to avoid losing staff, Watson Wyatt had ten tips to help you keep your team together (and profitable) through tough times:
- Focus on key talent: Focus limited resources on keeping and rewarding your key talent. These are the people you need most now to get you through the difficult times and later when the economy recovers.
- Be careful what and who you cut: Don't make harmful short-term cuts.
- Ensure performance management is understood: Ensure your performance management process is effectively understood by your employees and delivered well by line management. It should not be seen as simply a process for identifying and culling under-performers, but instead as a way to raise performance throughout the organization.
- Don't abandon bonuses: Don't abandon performance pay and bonuses but instead target them on your top performers and refocus them on realistic but stretching targets.
- Review sales targets: Review sales targets and territory strategies to focus your sales force on the largest opportunities.
- Look for cost savings: A review of business processes, HR policies and tax and administration could reveal untapped efficiencies. Examples include shorter working weeks, changes to travel policies, and salary sacrifice for pensions contributions.
- Promote the total reward message: Keep communicating the value of your total rewards. A tendency to focus on base salary means that employees generally underestimate the full value of their total reward package.
- Review executive reward: Review executive compensation to ensure the package is aligned to shareholder requirements, but still retains key executives.
- Don't damage your employer brand: Don't harm your employer brand by not delivering on your employee value proposition the moment things get tough.
- Keep talking: Be as open as you can with employees about your current HR and reward strategies.
The Question: Number four says "don't abandon bonuses" - between the bad PR Wall Street has been getting for its compensation structure and the nosedive in profitability at many firms, this looks to be a bad year for bonuses - is your company cutting them or keeping them?
(Image of scissors from batega, CC 2.0)
Jessica Stillman
Jessica lives in London where she works as a freelance writer with interests in green business and tech, management, and marketing.
