Flexible Compensation Packages

crop doctor showing pills to patient in clinic

I ran a poll recently on Linkedin and asked if people would prefer to have a flexibility in customising their compensation packages. An example would be that the company would provide a total compensation amount, e.g. $ 100,000 and let the employee choose how they would like to split it into base salary, bonus and equity.

The post received more than 2000 impressions however the voting ended with only 36 votes. 75% of participants voted for “yes” and the rest was either maybe or no.

This shouldn’t mean that I’m advocating for this type of approach. At least yet. However, it’s interesting that people would love to see that flexibility and individualisation. But…
(of course, there will be a but!)

What are the implications of such a practice?

Pay equity

The first and foremost challenge it’s going to create is the pay equity. As employees will choose different splits, this would create an unstandardised approach to base, guaranteed compensation.

Although it’s maybe less relevant internally as part of the organisation culture (of course, if communicated effectively), it would definitely impact employer/company branding when it comes to regulatory reporting.

Pay for Performance Management

That’s somehow the continuation of the above. As the individual selection of splits, it’s going to be extremely hard to implement a standardised pay for performance methodology as performance is “relative” and the benchmark is peers. Imagine the peers have no standard in their pay as the baseline: How can you effectively assess performance, and even if you do, how do you translate it to pay without disrupting that fairness?

Administrative load

Well, this is probably one of the most important reason that makes things complicated in this sense. Administrative load will be extremely high due to requests to customise employee pay data and it will definitely require quite flexible HRIS systems to accommodate that. There should be some gatekeeping to manage the customisation frequency, too.

Market volatility

Well, it’s going to be super disruptive to the market. Well, this might not be your problem in the short-term but it’s going to be hard to explain things internally down the line if there would be any competitiveness issues despite this approach.

Linkage to business strategy

Well, this is the main challenge. How is it possible to enable people to work towards the vision and mission of your organisation is through a solid total rewards strategy and its implementation.

If you allow people to customise their packages, technically you’re allowing them to play with that “linkage” as they want and this makes the organisation lose that control.

It’s extremely hard, if not impossible, to connect people with the broader strategy if their short- and/or long-term variable compensation is not or not enough linked it.

As an example, you have a bonus program which has a multiplier that’s decided based on the company’s success in terms of revenue growth and that’s a company priority. If the employee chooses to minimize the bonus portion in their package, how would it be possible to keep this person engaged and (to an extent) accountable if you don’t hit that revenue growth?

Overall, this sounds like a cutting-edge approach to rewards management. If the challenges that I mentioned above could be sorted, it might be an amazing lever to pull when it comes to talent attraction, motivation and retention. In the meantime, I do not expect the companies would disrupt the current portfolio of programs but it’s a good food for thought.

Photo by Karolina Grabowska on Pexels.com

Recertified by WorldatWork!

It’s that time of the year when I had to submit all my activities in the Total Rewards field to get my recertification renewal from WorldatWork.

To be honest, I was a bit skeptical to get my recertification approved. Given the pandemic and how it impacted -especially- the social aspect of collaboration with other professionals in the field, I found it hard this time to submit enough credits. However, it didn’t turn out that bad!


Up and onwards! I will share more updates as I get ready for the next one!

Tips to ace WFH

As a strong believer of working from home (WFH) during my career, I observed few habits that would make your life easier during these days.

I hope these will be helpful for you. They are based on my experience and nothing is scientifically proven unless data/source provided.

Get used to calendar & tasks being your best friends

I benefit from a GTD (Getting Things Done) approach a lot.
Creating tasks and blocking respective times in your calendar is essential. This will force you to work as you see your work calendar is full with time blocks and with a deliverable linked to them.

I would also recommend that you definitely block time and try to prioritize if you think that task is not creating any pleasure for you – if you’re less motivated to do it. This will also avoid procrastination.

If you don’t get overwhelmed with a busy calendar, I also try to squeeze my meetings in certain time blocks to avoid that “free time syndrome” — staying home and having free times in between doesn’t distract me when I’m home.

Book your time for errands

Again, calendar will be your best friend. In addition to the first point, blocking your time for errands is also important.
In an office set-up, you’d already have resources/teams for cleaning, food etc. which you don’t need to worry about. That doesn’t work at home.

I do book my time if I need to exercise during morning, or need to cook for lunch and even need to feed my cat.
For effectiveness (and obviously for your health), having those covered is essential so they are in your work calendar when WFH.

Be transparent for potential interruptions in meetings

We can share at the start of a VC meeting if we’re waiting for a grocery delivery, plumber or that you need to feed your dog in 15 minutes etc.
As I said earlier, always try to book time for such tasks in advance. Somehow, if you cannot, working from home is a bit more complicated as your home and work life are becoming integrated. We should be flexible with the daily tasks and tell our stakeholders in advance for courtesy and also efficiency.

Create your own separate workplace if possible

This is important – Even if you’d like to work from your couch – try to separate that part of your apartment as workplace and try to avoid working from places where you spend your off-time at home.

Don’t feel obliged to stay online longer/in front of your screen if you’re done for the day

One advantage of WFH is the non-existent commuting time so use it but not always for work. If you’re done for the day and you don’t need anything else to do; give that time back to your personal life.
You can use that time for work but don’t feel obliged – especially, like I said, if you’re done for the day. You need to keep yourself motivated for WFH. Staying online will not help you for that; it can add more stress. and can become a very unsustainable habit of “being always online”.

Get your meals ready in advance (even if they’re sad)

If you have the chance to cook everything in advance, this will boost your efficiency.
Personally, I realized that if I don’t do that, I started skipping meals. This is not healthy so take good care of yourself.

Have fun, be creative

At the end, companies are looking for ways to keep their employees motivated in an office space. One of the major action is that they’re trying very hard to create a place where you can feel comfortable. And guess what? — The most comfortable place for a human-being is their home. 😉

That’s why, if you try to have fun while doing your best at work, why shouldn’t you avoid that at home? It’s important that you still do VCs with your colleagues, just chatting, virtual gatherings are very fun.

If you’re a multitasker, you can even talk to your parents/friends etc. while working on some easy tasks. For example, if you’re into cycling like me, it’s extremely fun to read your e-mails while spinning on an indoor trainer.

let’s start again.

i’m going to try again to revive this blog as i have received a lot of comments about why i don’t write anymore. there’s a good amount of information i shared previously about my area of expertise and i thought it might be a good timing with the pandemic and the weird times we live in.

i’m planning to come up with some quick posts about triathlon, my passion beside my daily work and try to kick this habit of posting at least one post per week.

hope this is going to go well. let’s start again, folks.