Hewitt Associates Report Reveals Organizations in Asia Pacific are Gearing up to Manage Employee Performance and Rewards

Hewitt Associates Report Reveals Organizations in Asia Pacific are Gearing up to Manage Employee Performance and Rewards

August 07, 2007

    SHANGHAI, China, Aug. 7 /Xinhua-PRNewswire/ --
Organizations in Asia are progressively realizing that
their critical assets are fast evolving into their most
expensive assets and are evincing a greater interest in
developing clear metrics that measure returns on
compensation, according to the Managing Compensation in
Asia 2007 report released by Hewitt Associates, a global
human resources services company.  Although such metrics
are yet to be universally established and adopted,
organizations are clearly focusing on increased use of
market input to determine the `right' levels of pay and
developing an accurate judgment of employee performance and
potential. 

    Where this approach was earlier evinced by markets such
as Singapore, Hong Kong and China, emerging markets such as
Vietnam and Indonesia are fast taking the same route.  This
newly launched report also reveals that though organizations
are spending time and effort in understanding market data,
measuring employee performance and linking the two to
compensation decisions, they are however failing to achieve
the desired objectivity.  This gives rise to key highlights
to managing compensation in Asia.

    Competitive benchmarking on the rise

    The growing pressures on retaining talent has steered
an increasing number of organizations to study competitive
practices by keeping a closer eye on market movements.
Hewitt's Managing Compensation in Asia 2007 reports that
over 80% of organizations use market information to
determine pay decisions. While 81.1% of organizations use
`Line of Business' or direct competitors as a parameter for
comparison, `Geographical location' and `Talent pool' are
also commonly used.  Majority of the organizations use
multiple parameters when it comes to deciding the
comparator group.  32.7% of organizations use three
parameters for choosing a comparator group, while 28.6% use
two parameters. A mere 18.6% of organizations use a single
parameter. 

    Nishchae Suri, head of Hewitt's Talent and Organization
Consulting Analytics practice in Asia said,
"Organizations in Asia are slowly making the
transition from being `market aware' to being `market
driven'.  There is a clear indication that more and more
organizations are benchmarking and are willing to share
compensation data in order to attract and retain talent as
well as manage costs.  In a region that is plagued with new
talent challenges, higher market orientation and increased
performance consciousness ensures that broader business
goals are achieved."

    Focus on Performance Increases

    "Organizations also need to ensure fair
distribution of compensation, in order to increase healthy
competitiveness.  Compensation must be commensurate with
employee capabilities and should accurately reflect their
level of contribution and differentiate them accordingly
from average performers", adds Suri.

    In a region where performance is the strongest factor
in determining pay decisions, organizations are trying to
forge a stronger buy-in of the plans by directly
correlating an employee's performance to rewards.  98.5% of
organizations use performance as a criterion to drive pay
levels.  According to the report, an `Outstanding'
performer gets two times the increase than that of an
`Average' performer, reflecting the performance
consciousness in the region. 

    Transparency in Pay Communication Lacking in Asia 

    Pay communication continues to be an imposing issue in
Asia. Suri elaborates, "Despite the best intentions,
the key challenge that organizations face in implementing
market-driven and performance based pay programs is the
lack of transparent communication and poor understanding of
the schemes. In fact, more than half of HR professionals in
Asia are not satisfied with the way their organization
deals with pay-related communication.  There is clearly a
huge gap between what employees want to know and what
organizations are currently sharing."

    The largest gap between current practice and HR
expectation is seen in the areas of communicating benchmark
positioning, explaining total benefits package and
disclosing total number of bands or levels within the
organization. Significant gaps are also evident between
HR's desire and employee expectations in the areas of
communicating salary range. There is a half and half split
between employers who are comfortable with the level of
transparency that currently exists, and those who are not;
and approximately 75 percent agree there is room for
improvements in this area. Factors that inhibit more
transparent communication include lack of maturity on the
part of employees, their lack of understanding, and a lack
of understanding among managers, which inevitably leads to
an inability to help employees understand the `total
package' and difficulty in communicating career progression
and movement to employees.

    About Hewitt's Managing Compensation in Asia 2007
Report

    Founded in Hewitt's groundbreaking research and backed
by world-class data, Hewitt's Managing Compensation in Asia
2007 report provides invaluable insights on the emerging
trends and best practices in compensation across 11 markets
in Asia.  It helps HR and Compensation and Benefits
professionals gain a thorough understanding of performance
and rewards around the region by providing accurate and
up-to-date information to aid future decision-making.  The
report features in-depth analysis of compensation across
several pre-defined job levels in each market in Asia,
highlighting absolute pay scales, mix of compensation, and
prevalence of benefits, perquisites, and variable pay
including long-term incentives.  The report also provides
insights into performance and rewards not only at a market
and regional level, but also across the five prime industry
groups in Asia Pacific, namely IT/High Tech,
Pharmaceuticals/Medical, Consumer Products, Hotels and
Banking and Financial Services.

    For more details contact [e-mail].

    About Hewitt Associates

    With more than 65 years of experience, Hewitt
Associates (NYSE: HEW) is the world's foremost provider of
human resources consulting and outsourcing services.  The
company consults with more than 2,300 organizations and
administers human resources, health care, payroll and
retirement programs on behalf of more than 340 companies to
millions of employees and retirees worldwide.  Located in 35
countries, Hewitt employs approximately 24,000 associates.
For more information, please visit
http://www.hewittasia.com .


    For more information, please contact:	

     Chaiti Sen
     Tel:   [phone]
     Email: [e-mail]

     Merlissa Elvin
     Tel:   [phone]
     Email: [e-mail]