Employee Rewards and Benefits News
Balancing reward with risk-taking
In the financial sector, firms are seeking to manage reward while discouraging potentially imprudent risk taking. Standard Chartered works within (UK) Financial Services Authority principles, and has already had a bonus deferral system for almost a year. The bank uses risk-adjusted profit measures as its main funding driver for much of its discretionary bonus calculations. Foreign banks are using similar methods. Most have kept base pay components steady, but staggered bonus payments over three years. So, if a dodgy deal bounces back, bonuses can be cancelled. Some companies have fixed salaries against industry benchmarks, but consider giving employees shares as part of their total reward.
Some companies say another vital consideration is the tasks asked of staff. Many realise the value in their jobs can be defined by more than their salaries. You can give staff a global, entrepreneurial career without extra pressure on compensation costs. Sounds good, but will deferred bonuses and higher fixed components bring permanent change to compensation packages, or will memories fade as the economy takes off?
