Human Resources October 2013

October 2013

The smart HR professional’s blueprint for workforce strategy

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Incentives vs recognition Is one better than the other for engagement?

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Opinions Getting big with data Unlocking HR’s value with analytics

Essence of youth How to best leverage younger staff

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October 2013 « CONTENTS

Features 18 Incentives versus recognition Which works best to motivate staff along a quicker path to engagement?

Sabrina Zolkifi speaks to HR leaders to find out whether incentives or recognition comes out on top.

28 The new blended learning Blended learning can maximise training and development, but some organisations are unsure about how to best leverage Learning Management Systems (LMS) to manage this. Amos Seah reports.

ON THE COVER: Art direction: Shahrom Kamarulzaman; Photography: Stuart Jenner – stuartjennerphotography.com;

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EDITOR’S NOTE

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ATTRACT.REWARD.ENGAGE.RETAIN. The war on talent is far from over, and employees are demanding a holistic benefits package that includes both monetary and nonmonetary rewards. To remain competitive in this highly volatile environment, what are the best C&B strategies HR professionals can leverage on to ensure their workforce continues to be engaged, motivated and productive?

Benefits Asia 2013 conference is here to answer all your burning C&B questions and equip you with the strategy and framework to drive excellence in total rewards. This conference will bring together C&B and HR professionals across Asia Pacific for two full days of insightful presentations, intriguing debates and more than 15 hours of networking opportunities.

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Get into the boss’s head

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How likely would you be to recommend your employer to a friend or colleague as an employment opportunity?

Global

29%

Americas

42%

EMEA

24%

APAC

28%

Source: Kelly Global Workforce Index: Employee Engagement and Retention, September 2013

What factors have contributed towards your concerns around cash flow?

Singapore Slow paying customers

56%

Higher business expenditures

67%

Lower revenue

50%

Customer/client insolvencies

30%

Higher taxes

19%

Competitive pricing/low margins

30%

Employment growth by sector

3Q12

4Q12

1Q13

2Q13

Higher cost of short-term financing

17%

Manufacturing

3,700

900

-1,200

2,300

Difficulty securing financing

15%

Construction

9,700

11,100

8,400

8,500

Rapid growth/new investment opportunities

9%

Services

12,700

31,200

21,100

22,700

R&D/new product development

9%

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FEATURE » Employee Incentives

In a world where companies must extract the best from their employees, or fall behind, which method of motivation leads them along a quicker path to engagement?

Sabrina Zolkifi speaks to HR leaders to find out whether incentives or recognition comes out on top.

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Employee Incentives « FEATURE t’s easy to put a carrot at the end of the stick, but what happens when employees decide the carrot is no longer enough, or desirable in the first place?

Over the past few years, particularly with younger and more opinionated employees entering the workforce, companies have been forced to re-evaluate what works and what doesn’t when it comes to employee motivators.

And in doing so, leaders have had to distinguish between the merits of providing employees with incentives and recognition.

“HR experts have generally differentiated the two by timeline, classifying incentive as the pre-achievement reward wherein employees are given an incentive (normally additional pay for performance) to motivate them to perform better going forward, and recognition as the post-achievement reward where employees are given prizes, be it monetary or non-monetary,” says Phan Yoke Fei, group head of HR at Auric Pacific Group.

Both strategies have worked well for organisations thus far.

Phan says for either to be successful, HR has to be able to “recommend the correct reward strategies in line with the business strategies to drive correct motivation and behaviour among different groups of employees”.

This is a sentiment shared by Regina Koh, head of HR at 3M, who says the company has an incentive programme called the sales performance club, which rewards outstanding sales performers based on the percentage of their sales achievement.

“In contrast, recognition programmes are a form of appreciation and acknowledgement of a person’s achievement. This typically applies to a wider group,” she says.

“The 3M Merlion Awards, for instance, recognises employees from different functions in the company for having gone beyond their call of duty.”

The art of communication A survey by Towers Watson of 1,066 employers in the Asia Pacific region found a positive correlation between the perceived value of benefits and effective communication.

In fact, 91% of employers who believe they have succeeded in communicating effectively in this aspect believe their benefits were sufficiently or highly valued by staff.

Therefore, it seems clear the first step in

identifying which will be more effective for an organisation lies in understanding the employee demographic.

“Experienced employees may be more motivated by recognition of their seniority and may prefer to be rewarded with formal mentorship or coaching responsibilities to develop and help young and upcoming employees progress and help them succeed in the organisation,” Phan says.

On the other hand, Millennial employees may prefer developmental opportunities, or even simpler rewards such as travelling and project opportunities within the geographical presence of the organisation they work for, he says.

But it’s not enough that leaders know what employees expect when it comes to both incentives and recognition.

Organisations also need to make sure they are effectively communicating these rewards to their staff.

Pauline Chua, general manager of human capital and corporate social responsibility at Fuji Xerox, says employees are usually informed in advance of the kinds of rewards, be it monetary or otherwise, they will receive upon reaching a predetermined goal.

“As such, incentives are effective in getting results, especially in instances where the goal is specific in nature,” she says.

Chua adds the same is done for its staff recognition efforts, where the reward is usually in the form of a public display of appreciation of an individual or team effort well done.

“A proper recognition programme helps to improve employee morale, creates more pride in their work and promotes a positive work environment,” she says.

“Every employee can do with some affirmation.”

The perks of recognition The highest accolade an employee at Fuji Xerox can receive is the annual MD Award, “where we recognise individuals or teams who have displayed exceptional performance or contributed significantly to the success of Fuji Xerox Singapore”, Chua says.

“There is no upper limit to this award as this is the company’s way of saying ‘thank you’ to each deserving employee.”

This culture of providing recognition to employees is also applied at Heinz ASEAN, where Laurent Low, the company’s director of

October 2013 « Human Resources « 19

FEATURE » Employee Incentives HR for Asia, Middle East and Africa, says “in some situations, recognition goes a very long way”.

“For example, in Heinz, we select top performers and talent and provide them special one-on-one time with our global CEO and his senior leadership to share ideas on the business.

For the CEO to know these employees personally, it is a big recognition,” he says.

“The ‘appreciation’ effect is very much achieved in recognition, as it strengthens the emotional connectivity between the individual and company.”

However, Low is quick to point out he believes both incentives and recognition have to “work hand-in-hand to retain talent, amidst all things”.

“Incentives are almost essential and necessary to drive employees and teams towards their objectives and performance, while recognition builds on incentives to further enhance the ‘reward and recognition’ power of both.”

Laurent Low, director of HR, Heinz ASEAN

“Incentives are almost essential and necessary to drive employees and teams towards their objectives and performance, while recognition builds on incentives to further enhance the ‘reward and recognition’ power of both,” he says.

Another important consideration when implementing both incentive and recognition programmes is tracking.

“It is definitely important to have clearly defined objectives and metrics,” Koh says.

“This is to ensure that we are rewarding the right kind of behaviours for the results.”

Chua adds it is also critical to remember that gaining feedback from employees of a programme’s effectiveness is “key to keeping the programmes relevant to the organisation”.

“This is journey and over the next few years, I see incentive and recognition programmes gaining prominence over the traditional methods of rewarding and motivating employees as organisations gain sophistication

in employing these programmes successfully,” she says.

Phan says he sees incentives, which are perceived to be diluting in value over a period of time, will become less preferred, unless organisations can assure their employees of their long-term commitment and continuity as a growing business.

“It is quite entrenched in many Asian cultures where tradition and reputation are highly valued,” he says.

“As organisations strengthen themselves and build solid footprints in their businesses, one may find increasingly, achieving milestones and being recognised as successful in such organisations to be cherished and valued by employees, far superseding any form of monetary incentives required in ordinary circumstances.”

Game on Addressing the Asian context, Low says managers have to also continue being less hesitant to use recognition more frequently.

“Some of them are just too busy, while others are not aware,” he says.

“In many cases, a gentle reminder or some coaching usually opens up their awareness of this powerful motivational tool called recognition.”

Does that mean recognition will be a more effective staff motivator than incentives in the workplace of the future?

“I’m afraid there is not a clear answer as to who the winner will be in a contest between incentive and recognition, but it is safe to say both are normally present in organisations I’ve worked with to ensure the organisation can thrive as a whole,” Phan says.

Chua agrees, saying at the end of the day, for the most powerful connection between positive reinforcement and the action that is required to earn it, it is important to be able to reward and recognise quickly.

“Empowered managers and employees who are supported in their efforts to acknowledge a job well done greatly enhance an organisation’s ability to attract, engage and retain talent that is critical in today’s workplace,” she says.

“Finding new ways to inspire our people, move them to action and make seemingly impossible goals attainable are what makes incentive and recognition programmes all worthwhile.”

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SPONSORED RECRUIT ADVICE HOW TO THIS ARTICLE WAS BROUGHT TO YOU BY AIA SINGAPORE

GET A HEALTHIER BOTTOM LINE BY TAKING CARE OF YOUR EMPLOYEES’ HEALTH By decreasing absenteeism and medical claims and by improving productivity, Alcon Laboratories secured a return of nearly 50% through the use of an incentivised science-backed wellness programme for staff. (1) Did you know that the health status of a company’s employees has been proven to directly impact its bottom line?

Singapore is currently faced with a rapidly ageing workforce, which should be a cause of concern for local employers, given that older employees are more likely to develop chronic diseases of lifestyle. In addition, limited or poor management of employee health often has a detrimental effect on the individual, business and macro-economic development.

However, a healthy workforce will in turn increase productivity, competitive advantage and allow re-employment of older employees while managing to keep healthcare costs under control.

It is encouraging to see recent trends in Singapore suggesting there is an increase in the number of workplace wellness programmes. However, only 30% of Singaporean workers are engaging in these programmes. (2) When choosing a programme, it is essential to consider those which have the tools and capability to promote and track engagement.

A successful example of this is the implementation of a science-backed wellness programme called Vitality, which helped Alcon Laboratories to successfully promote and facilitate a culture of health and wellbeing. The Vitality programme by Discovery Holdings from South Africa, integrates activities and incentives to encourage healthy behaviours and smarter choices about employee health.

Alcon Laboratories secured a return of nearly 50% through the use of an incentivised science-based wellness programme for staff. (1) This was one of the findings from the case study.

In 2008, Alcon implemented the Vitality programme with the main goal of promoting and facilitating a culture of health and wellness and, at the same time, measuring the impact of promoting engagement in healthy choices and activities through incentives. Vitality provided Alcon with comprehensive, verifiable data that empowered the company to regularly and accurately monitor engagement, effectiveness and return on investment (ROI).

The programme was designed to make staff accountable for their health decisions, and Vitality provided Alcon staff with the education and tools necessary to do this. A key component of this personalised journey was the initiation of the Vitality Champs programme – a group of employees who encouraged and led their peers in wellness engagement by co-ordinating and managing contests, developing bulletin boards and conducting testimonial interviews.

The programme had numerous positive results, including nudging staff towards healthy behaviour and engagement. By 2010, Alcon had noted a 50% increase in the number of participants involved in verified fitness events. This was one of the findings from the case study, but this relates to the ROI of 1:483 (1) After changing the programme in 2010 and by tying a contribution discount on their medical plan to members’ participation, Alcon managed to increase member utilisation of online courses and tools by 80% and participation in verified activities by 24%. From 2009 to 2010, the average amount of activities performed per engaged member increased by 48%. (1) Through the programme, Alcon also realised an improvement in modifiable risk

22 » Human Resources » October 2013

factors. Findings suggested there was not only a reduction in those categorised as high-risk, but that employees who were more engaged in the programme had a greater decrease in all their risks when compared to those who remained inactive.

In addition, Alcon enjoyed numerous cost-savings for staff members who were highly engaged in the programme. An analysis revealed savings in pharmacy and medical claims, productivity and short-term disability and workers’ compensation resulted in a favourable ROI 1.483. (1) Based on these proven results, AIA partnered with Discovery to bring AIA Vitality to companies in Singapore to help them encourage employees to make real improvements in their health. We know that employees in Singapore are increasingly exposed to various health risks, and AIA Singapore is committed to helping companies see the real benefits of implementing a science-backed wellness programme to improve health, productivity and performance.

(1)

Please refer to http://www.thehealthproject.com/past_winners/year/2011/AlconLaboratories/index.

html for all results (2)

Please refer to Singapore Business Review, http://sbr.com.sg/hr-education/news/70-singapore-

workers-not-using-company-wellness-program-survey

This article is contributed by Darryn Lifson, Head of Wellness, AIA Vitality Company Limited

AIA Vitality Company Limited is a joint-venture between AIA Group Limited and Discovery Limited, innovator of Discovery Vitality – the world’s largest wellness programme with more than five million members worldwide and over 17 years of experience – to offer the science-backed wellness programme AIA Vitality in the Asia Pacific region. AIA Singapore Private Limited is the first market to launch AIA Vitality, as part of its broader efforts to provide customers with innovative products and services that not only meet their protection and savings needs, but also to motivate and enable Singaporeans to lead healthier lifestyles by promoting real and sustainable change in behaviour.

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Employee incentives « FEATURE

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