Compensation Insider - April 2012 posts

Compensation Insider - April 2012 posts
Compensation and Benefits with a Middle East flair - http://compensationinsider.com

Compensation Insider
Posts published in April 2012

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Table Of Contents

Don't like handcuffs ? Join Netflix ! .......................................... 3
The Netflix Employee Value Proposition ....................................... 5
3 factors influencing the promotion rate for your organisation ....................... 7
Relocations : do you offer cash or services ? .................................... 9
The value of post-mortem analysis for Compensation projects ....................... 11
The 5 questions to test the validity of a statistical analysis .......................... 14
Two Excel functions to save time in compensation files ............................ 15
A practical tip for your Compensation files .................................... 18
A view on emiratisation from the Abu Dhabi Tawteen Council ...................... 19
An update on the project on expat retirement schemes in the UAE ................... 21
Feedback from the Arabian Society for HR Management (ASHRM) conference 2012 ...... 24
How to be a Compensation leader - even without a title ........................... 27
Earth Day - Will you care ? ............................................... 30
A double celebration .................................................... 32

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Don't like handcuffs ? Join Netflix !
http://compensationinsider.com/dont-like-handcuffs-join-netflix/

Reed Hastings is the co-founder and CEO of Netflix, which provides live streaming TV and video shows
from the internet on a monthly subscription basis in the USA, Canada, UK and Ireland. A great concept
and one that led to the ultimate doom of the local video/DVD rental business (think Blockbusters).

In How to set your employees free, an interview with Bloomberg BusinessWeek, he talked about the
culture in his organisation. Of course, he mentioned their "no policy on vacation" approach. Their view is,
it should not be how many days you work that matters, but how great your work is - and you should be
mature enough to make the right decision.

I guess it depends on the company culture. If you have controlling, "little" line managers who think they
show power by refusing your leave, this approach can't work.

And what about the opposite ? Some companies or governmental organisations in the region have very
generous vacationis policies - on paper. Yet they may remain largely un-delivered, as the 50 days off or
more are sometimes never granted by management. What kind of message does that deliver to employees
? "We say we care about your work-life balance and put it in writing but don't actually intend to enforce
it. Just take the leave encashment and be happy. We don't care if you don't feel that you can trust the
company and we do not worry about employee (dis)engagement" ? But I digress.

What grabbed my attention the most was this statement (emphasis is mine) :

"We care about great work. This requires thoughtful, mature high-performance employees. One way we
attract top talent is with top-of-the-market compensation. We do no stock vesting or delayed
compensation. Many firms give a bonus or stock grants that vest over a number of years. That’s
sometimes called “golden handcuffs.” I’ve always been put off by the handcuffs part of that. It’s the
wrong imagery. We want people who want to work here because they are well paid, challenged, and
excited. Employees can leave here at any time without losing compensation."

I find this approach to long-term compensation (or rather, the lack of it) interesting. In a world where
more and more companies are trying to tie compensation to long-term results, this philosophy is radically
different.

There is maybe more direct cost to the company through higher wages but less deferred cost. It shifts the
emphasis from pay as a motivator, to "challenge and excitement" as the main drivers of motivation. Dan
Pink would agree !

I am not against long-term compensation, but have always wondered about its motivational impact below
the Executive level. In middle management and expertise positions, the payouts are more of the "golden
handcuff" nature that Reed Hastings so clearly does not like, rather than a motivation to look at the
long-term impact of one's decisions. These employees probably have more difficulty than top executives
in identifying the line of sight of their actions on the results of the organisation a few years down the

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road.

What do you say ? Do you agree with Reed Hastings's position or do you think companies should provide
long-term compensation to their employees to keep them motivated ? Share your views in the comments
section !

Liked this post ? Why don’t you share it on LinkedIn or Facebook ? Simply click on the link below and
help your friends and connections benefit from it too !

Related posts :

The Netflix Employee Value Proposition
High Pay Commission report tackles excessive high compensation
One lesson from the Zynga stock scandal
A follow-up on Zynga

Image courtesy of Netflix.com

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The Netflix Employee Value Proposition
http://compensationinsider.com/the-netflix-employee-value-proposition/

When I was preparing for my previous post on Netflix, my attention was drawn to a small part of Reed
Hastings' interview. He said : "We care about great work. This requires thoughtful, mature
high-performance employees." (emphasis is mine).

So I went on a path of discovery to try and find more information about the employee value proposition at
Netflix, and along my way came through these pieces :

How Netflix pays its employees is dated back to 2010 but I believe it to be still mostly accurate as I did
not find anything at a later date indicating major change in their pay philosophy. It details the pay policy
at the company.

Other companies should have to read this internal Netflix presentation explains the following : "Early on,
a lot of it [a specific presentation on employee value proposition from Netflix CEO Reed Hastings] deals
with workplace efficiency, and not being afraid to let someone go if they’re not doing their job. The idea
is that if someone just wants to do mediocre works, that’s fine, they’ll get a nice severance package. It
extends this into an emphasis on effectiveness over effort — the company doesn’t want to necessarily
reward people who stay late versus those who don’t, but get the same amount of work done. It then turns
to some internal policies including management best practices. And then to retention practices — making
sure the company pays the top people a high enough salary that they’ll never want to leave."

Netflix' unique culture, beautifully defined, looks at the same presentation but analyses it mostly from the
(you guessed it) company culture perspective. On their corporate website, Netflix themselves explain why
to work with them in a few bullet points which include in position 3 : "We pay top of market to attract
and keep the high performers every company wants". Simply stated, and, importantly, not placed as the
first of the top reasons they want people to join them for.

I understand Netflix pay at the 95th percentile of the market. Of course an organisation that pays at the
top of the market will want to ensure a good ROI on its financial investment in its talent. So people who
don't contribute enough are weeded out very regularly.

What I like in the Netflix employee value proposition is that everything is clearly defined : the
expectations from the employees (be an outstanding performer), what happens if you don't meet
them (Unlike many companies, we practice "adequate performance gets a generous severance package")
and what happens if you do. There is also a section on the crucial role of the managers in establishing and
maintaining the appropriate context for that high performance to take place.

My favourite slide ? Page 23 : " We're a team, not a family. We're like a pro sports team, not a kid's
recreational team. Netflix leaders hire, develop and cut smartly so we have stars in every position".
(emphasis is theirs).

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I would like to encourage you to read the presentation, it is 126 pages long but a fast read. And as HR or
Compensation manager you will find it compelling. I hope it inspires you to write something equally
persuading for your organisation. So here it is - have a good read !Culture

View more presentations from Reed Hastings


Related posts :

Don't like handcuffs ? Join Netflix !
One lesson from the Zynga stock scandal
A follow-up on Zynga

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3 factors influencing the promotion rate for your organisation
http://compensationinsider.com/3-factors-influencing-the-promotion-rate-for-your-organisation/

As we got into salary review time or mid-year reviews, colleagues have asked me, almost every year, the
same question about the promotion rate : "What is a reasonable benchmark for the number of employees
to be promoted each year ?"

Now, bear with me please because my answer is one that usually is not very well received : "It
depends".....

Here are three of the factors that influence the numbers of promotions that can be reasonable for your
company.

The first and most obvious factor is related to your company history.

What is the size of your organisation, its growth and its culture ? In a startup for example, promotions can
be frequent and rather informal as existing employees take on expanded responsibilities in the same field,
building teams as the company grows, or even taking on entirely new jobs together when the position gets
created. There are multiple and frequent opportunities for promotion given the growth rate of the
company.

In a mature organisation, the systems are more codified. You will need more layers of approvals, there is
often a minimum length of tenure in the current grade, the number of opportunities may decrease (as a %
of headcount, not in absolute numbers)... In short, a more mature organisation will often offer less
frequent promotions.

The second factor is your employee repartition.

Usually junior staff can have promotions on a more frequent basis, while senior staff will stay on the
same grade for extended periods of time. It makes sense, doesn't it ? A Manager will not get promoted
every 2 years, while a junior HR person at the beginning of their career for example, may.

It takes more time for a senior level to be "fully in the job", up to one year if the position manages annual
cycles. The manager needs to demonstrate vaue at his/her level. Projects span a much longer time.
Handling change and turnarounds is done over a period of years, not months. And the higher you get in
the organisational pyramid, the fewer job opportunities at the next level up there are. So, promotion rates
vary based on the current grade of the employee.

The third factor is linked to your organisational structure.

How many grades are there in your organisation ? Is it a traditional grading with 20 or more levels, in
which case prmotions can take place relatively often ? Or do you have a broadbanding system in place,
with 4 or 5 levels and therefore more focus on lateral moves and skills growth rather than traditional

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promotions ?

Or maybe your company has a system such as the one in use at many professional services firms (law
firms, accounting companies, consulting organisations...) with one,two or 3 subgrades such a Associate
junior, career and advanced or Principal I, II and III. The level within the grade changes on a regular
basis, for example it takes one year to move from junior to career, but the move from Associate to
Principal is what is considered a "real" promotion and it takes more time to achieve that change of status.

As you can see, your company maturity, the composition of your employee population, and your grading
structure, all have an influence on the frequency of potential promotions for your staff, and therefore on
the promotion rate ie the number of employees promoted / total eligible employee population.

Does your company set a target promotion rate at review time ? Are there other factors which are of
strong influence on the number of promotions available at your company ? Please share them with us in
the comments section !

Related posts :

How to decide how many promotions to grant each year
The best order in which to apply salary increases in any organisation
Merit increase or bonus, how do you reward performance ?

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Relocations : do you offer cash or services ?
http://compensationinsider.com/relocations-do-you-offer-cash-or-services/

In essence, this question was recently asked on LinkedIn and addressed corporate relocation policies for
candidates from one part of the USA to another, and whether companies provide money or support
services.

I'll transfer it to the situation that a lot of us are faced with in the GCC : dealing with middle to high level
candidates and moving them to Dubai, Abu Dhabi, Doha, Manama, Kuwait City, Riyadh or Muscat.

Cash is, well, a cash payment covering the expenses related to the relocation of the candidate. It can be a
lump sum or a series of lump sums /allowances or reimbursements of a certain type of expenses such as
household goods removal and insurance, flights for the candidate and her family, covering the ealry rent
cancellation in the home country etc.

Cash has many advantages :

it is easy to use for cost anticipation,
clear to understand for candidates,
and, especially if a fixed allowance not a reimbursement,
hassle-free within the company
and very flexible for the candidate to allocate as they see fit based on their specific
circumstances.

On the other hand, the services that a company provides to a candidate relocating abroad also have very
distinctive merits :

pragmatic support in the hassle linked to a move abroad (for example no need to spend hours trying
to find the cheapest or most convenient flights to the new country or to select household goods
removers as they are provided by the organisation)
reduce the stress related to the move as things are taken care of concretely (for example when a
relocation agency helps the candidate figure out schools for the kids)
provide immediate productivity gains through a smoother integration and less time wasted, and
longer term retention rates
create a positive image about the company in the mind of the candidate/employee : if the company
cares enough to help me look for a new home in this strange new country, then it will care about me
even more once I have demonstrated my value.

Personally, I believe in a mix of both, with a bit of cash thrown in to allow for personal flexibility, and a
lot of personal service especially upon arrival in the new city.

I am speaking mostly out of personal experience as I relocated abroad 6 times so far. The help you get in
identifying the right area to live, finding a new home, settling down through things such as setting
electricity, phone and internet and enrolling in the local medical system if needed is the one that makes

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your move so much easier.

And at a certain level of seniority, you start to value your time and reduced stress level more than getting
a bit more cash, and truly appreciate the peace of mind that the support gives you.

So what does your organisation do ? Provide cash to its new employees relocating from abroad, or
provide support and actual services to them and why ? Do you think your company provides the best
approach for the profile of employees it targets and hires, or does your relocation policy need a little
revamp ?

Enjoyed this post ? Why don't you subscribe by email to receive my posts direct to your inbox 3 times per
week ? Simply enter your email in the box at the top of the column on the right !

Related posts :

2 reasons why it is more difficult to attract expats to GCC
Temporary reasons why expats are less attracted to the GCC
3 tips to help attract expat candidates

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The value of post-mortem analysis for Compensation projects
http://compensationinsider.com/the-value-of-post-mortem-analysis-for-compensation-projects/

A practice has helped me a lot in my career : to perform a post-mortem at the end of a project. You may
call it a recap, wrap-up or a review.

Post-mortems are common in the software engineering industry. Well, after all I worked for both
Microsoft and Apple - I had to learn something ;-) ! In project management, these wrap-ups are done to
review, shortly after the project end, all the aspects from the project, and to list all the learnings from that
assignment.

Benefits of post-mortem analysis for C&B

Every project needs closure. A post-mortem is a good opportunity to bring all parties involved in the
Compensation project one last time before going their separate ways - or working together again on
something else. In that respect, an assessment is a good opportunity to review the good and the bad,
celebrate successes and help participants to move on to their next assignment.

A post-mortem helps the organisation focus on continuous improvement in a concrete, pragmatic manner.
The team members feel more involved as they are asked for feedback on all aspects of how the project
went.

Through this involvement, they feel they can help identify reasons for problems, propose solutions to
some issues and they get a positive perception of the value they bring. It raises employee engagement.

And by collecting this feedback and implementing some or all of the suggestions and proposed solutions,
the organisation benefits through improved future projects in C&B. It helps reduce stress linked to the
unknown and improve workload, minimising errors and the time spent re-inventing the wheel during
subsequent related or similar projects.

Content of the post-mortem in Compensation & Benefits

I find that the process is especially useful when you work on annual or semi-annual cycles such as
managing incentives, salary reviews, performance management, promotions, participating to
compensation surveys etc.

In project management and software development a lot of the questions for the post-mortem focus on
budget management, timelines, technical and resource requirements.

For Compensation & Benefits though, some other aspects of projects are equally if not more important.
Here are some of things I like to review :

Exceptions to eligibility criteria, calculation rules, timing of payment, relevant information that
needs to be manually amended (eg reporting lines, start date vs tenure date etc), sources of

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information for data not found in the HR systems (eg through Finance, company reports etc)
Communication templates, questions that were asked to us, suggestions received, areas where
further education of employees and/or managers is needed for a better implementation in the next
cycle.
Timelines: planned... and actual, extra steps that were necessary, things that went faster than
anticipated.
People resources : who should have been involved but wasn't ? Who should have come on board
earlier, later or not at all ? Did the stakeholders act as planned / intended and if not, how can we get
better involvement from them ? Did we identify a need for further technical skills or other training
for team members to deliver better on the next project ?
General : what are proud of ? What did we deliver well ? What was the most frustrating part of the
project, and what can we do to alleviate that in the future ? What did we learn ? What do we look
forward to implementing or applying next time ?

Two quick tips for an efficient post-mortem in Compensation & Benefits

First, I create a special folder where I stash all kinds of documents and ideas as the project unfolds. At
that stage, I don't really care about organising those thoughts, repeating myself, collecting multiple Post It
notes etc.... What matters is that everything is put under one file for review at the end of the project.

I take special care to write down the exceptions and special cases that we have made as soon as they take
place, because I have learned from experience that at least 50% of these exceptions can be anticipated,
and my workload and risk of error can be significantly reduced next time if I anticipate them.

Second, in order to perform a good post-mortem, I let the team members know in advance that we will
perform such a review. It gives them an opportunity to create their own collecting mechanism if they wish
to, anticipating the post-mortem right from the beginning of the project.

I also list the kind of topics we will cover in the post-mortem and ask everyone to prepare their ideas
around one week before the actual meeting. We go through each member's answers to each question. This
has two advantages : it covers more points as there will be ideas identified only by one team member, and
the ideas that have been mentioned are de facto highlighted as the most important or impactful ones.

Performing a post-mortem brings clarity and improvement opportunities after a project is closed. This is
especially useful in Compensation & Benefits, where a lot of the assignments are to be done on a
recurring basis (annual, semi-annual, quarterly...). The post-mortem makes the project team members feel
more engaged and allows the organisation to capitalise in the previous cycles.

Enjoyed this post ? Why don't you share it on LinkedIn or Facebook so that your friends and contacts can
benefit too !

Related posts :

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5 traps to avoid for your Compensation projects
7 steps to compensation programme design - the basics
Socialize your Compensation & Benefits annual business plan

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The 5 questions to test the validity of a statistical analysis
http://compensationinsider.com/the-5-questions-to-test-the-validity-of-a-statistical-analysis/

In this instalment of Sunday Skills, I want to direct you to a podcast from Stephanie Thomas at The
Proactive Employer.

What to do when your results are statistically (in)significant lasts about 15 minutes and you won't regret
spending this quarter of an hour listening to Stephanie expand on the 5 questions you should ask yourself
when interpreting the results of a statistical analysis.

1. How would the results change if we had more observations ? Can you really draw conclusions or is
the sample too small ?
2. How well does the model fit ? Are we studying the appropriate relationships between the variables ?
3. Are the results reasonable ? Use your professional experience and judgement to assess of the results
make sense or not.
4. Is the estimated disparity big enough to matter ? Consider practical significance independently of
statistical significance. This really matters in countries where some categories of population are
protected, for example females, ethnic minorities, people of certain ages etc.
5. What follow-up is required ?

Stephanie includes examples from compensation analysis and clearly explains how the answers to these 5
questions will help you make decisions (or not) based on the results of the analysis you just performed on
your compensation data.

I hope you enjoy this audio format for expanding your analytical skills !

Related posts :

Compensation Data vs Compensation Intelligence
Understanding R-square value in compensation analysis
Percentiles - an easy way to figure it out
How to do it in Excel

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Two Excel functions to save time in compensation files
http://compensationinsider.com/two-excel-functions-to-save-time-in-compensation-files/

Two functions in Excel can help you save time when performing analyses on big compensation files :
conditional formatting and sorting.

Imagine you have big file with salary information and you want to find out who are the lowest paid of
managers in the organisation.

But titles are all over the place, not specifically tied to specific grades or other criteria and usually contain
words before and after “manager” so you can’t use a straightforward alphabetical sort to identify the
managers.

You don't want to sort manually by creating a dummy column and reading the job titles one by one to find
out who the managers are, and then doing a second manual sort to find out which ones are the lowest
paid.

Conditional formatting

Conditional formatting, well, does what its name says : it formats cells based on specific conditions that
you indicate.

In our example, select all cells on the file, then click on conditional formatting > highlight cell rules > text
that contains >type in the text you want to identify (eg : manager) and chose the colour and style the cells
will show in the file eg : lighgreen with dark green font.

Once done, all cells containing the word manager will be highlighted in green and you can see them
quickly.

The visual effect can be very useful in many circumstances, for example if you are working on submitting
data to a compensation survey and you want to check if there are some empty cells, which of course there
shouldn't. A conditional formatting putting the empty cells in red will help you quickly see (literally)
where you may have an issue of lack of data.

Filtering

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You can use the Sort and filter function in more advanced ways than the usual, regular sort from smallest
to largest or from largest to smallest.

In our example, first let's do a filter on cell colour. Select all cells > Sort and filter > Custom sort. Make
sure to select“My data has headers” so that you can use the titles of the columns in your sorting.

Select by : job title > sort on : choose cell colour > select the colour of managers (in our example, green)
>on top (because you want managers at the top of the file).

You can also filter on multiple levels, simply by click on Add a level. In our example, you would sort by
current basic pay > sort on : values > smallest to largest.

What matters is for you to think in advance about how you need to filter in order to get to the result you
want to achieve. The trick is to go from the largest subgroup to the smallest one. For example, you want
the lowest paid managers in HR and Finance with less than 2 years tenure in the company. You will sort
in this order : managers - in HR and Finance - less than 2 years in the company - with lowest paid at the
top.

For those of you who like visuals, I have put together a Powerpoint presentation with the same example :

2 functions to analyse compensation data in Excel

View more PowerPoint from CompensationInsider

I hope you find these functions useful in helping you saving time when you use Excel for manipulating
large compensation files.

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Enjoyed this post ? Why don't you subscribe by email to receive my posts direct to your inbox 3 times per
week ? Simply enter your email in the box at the top of the column on the right !

Related posts :

How to use Vlookup in Excel
How to use Concatenate in Excel
How to use Text to columns in Excel to participate to compensation surveys
A practical tip for your Compensation files

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A practical tip for your Compensation files
http://compensationinsider.com/a-practical-tip-for-your-compensation-files/

Today I just want to share a quick, practical tip for preparing Compensation files. It's nothing complicated
but it comes straight from the experience of preparing tens (if not hundreds) of these files over the years.
If you follow this simple advice you will save yourself time and stress when you are asked to include
modifications to your data - and believe me, you will be asked for these !

Let's set the scene : you are working on a Compensation file in Excel. Maybe you are preparing for salary
increases or bonuses. Or you are setting up your data file for participating in a compensation survey.

My tip here is very simple : select the largest possible eligible employee population for the exercise. Don't
be afraid to include too many people, better that than missing out on anyone. Create the rules and
formulas that you need for your objective then check them out until you are satisfied with the calculations
and have ensured that you get to the results you want including the formatting of the information. And
then but only then, check the eligibility list of your employees and do NOT delete the non-eligible
employees : cut and paste them in another tab in your worksheet. Keep the same column order, the same
formulas, the same formatting etc.

You will be happy that you kept them in your file, ready with their calculations, when your top
management asks you to perform exceptions and re-include certain employees who would not not
normally be eligible, or to tell them how much that person would have gotten if they had been eligible.
You will be able to perform those simulations in a snapshot and will impress your organisation, with very
little stress and with great confidence about the quality of your answer as your data was already prepared
and checked before the pressure of having to give an answer on the spot.

It really is as simple as not deleting but transferring the non-eligible employees into another tab once the
formulas have been created :-). So what do you say ? Do you have other simple tips to share for preparing
data files ?


Related posts :

How to use vlookup in Excel
How to use Text to columns in Excel to participate to compensation surveys
How to use Concatenate in Excel

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A view on emiratisation from the Abu Dhabi Tawteen Council
http://compensationinsider.com/a-view-on-emiratisation-from-the-abu-dhabi-tawteen-council/

The Abu Dhabi Tawteen Council (ADTC) recently visited an internal Emiratisation Summit that was held
at my company for us and the HR representatives of our assets.

As per the official Abu Dhabi government website, "ADTC spearheads the efforts of the Abu Dhabi
government in sustainable Emirati workforce development. It is dedicated to meet the demands of
different Abu Dhabi based businesses by enabling them to employ quality Emirati job seekers in order to
form strong foundations for the Emirate’s growth in the long run. It strives to overcome the obstacles
faced in placement of active job seekers and become the leading driver towards full sustainable
employment for every Emirati job seeker looking for a career path in the Emirate of Abu Dhabi."

I want to share some nuggets from their presentation as it can give you good background for your own
efforts towards emiratisation through Compensation & Benefits as well as various talent management
activities.

Some statistics on emiratisation as assessed by Tawteen

Amongst its many roles, ADTC acts as the central pool for tracking unemployed Emiratis and helping
them find a job. Their database is therefore the most representative to define the profile of the officially
unemployed UAE Nationals, even though enrolment in the list is not mandatory.

80% of Nationals enrolled in the database are fresh graduates.
10% maximum have 10-15 years of experience.
Most of ADTC database is made up of females in Al Ain.
Emiratis represent 74% of leaders in government entities.
Emiratis represent 33% of leaders in semi-governmental entities.
Less than 5% of leaders are female Emiratis.

I don't find these statistics surprising, they represent the demographics of the citizens, the fact that most
Nationals work for the government, and some restrictions that females face all over the world but also in
other GCC countries such as Saudi Arabia, as I reported recently from the ASHRM conference 2012.

The main challenges of emiratisation (in the private sector)

Poor career path and support
Lack of awareness of the nature of work in the private sector
Non-matching skill requirement with job seeker profiles
Prevailing perceptions
Lack of coordination between supply and demand
Pay differential with the public sector

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Beyond the lack of technical English proficiency for a lot of the Emiratis in their database, ADTC also
acknowledges some education-related issues which they called "business ethics" in general and covering
topics such as attitudes and behaviours. For example they have to educate the young on how can males
and females interact in the workplace, given the relative scarcity of social interaction between genders
outside the family boundaries.

They noted this was especially important for female Nationals coming from the Western region, an area
more traditonal and socially conservative and where sometimes, the females don't understand what is
appropriate in the workplace compared to the family environment.

They also discussed with us the need to shift mentalities from preferring being unemployed to working in
the private sector even if with a lower pay, so that the National can gain the experience that will make
him/her successful. They mentioned the importance of having role models in the private sector, some
Nationals who started as trainee and then gre as they were mastering the demands of the job, and moved
into managerial positions in the private sector.

As you can see, Tawteen makes an honest assessment of the challenges to successful emiratisation and
does not shy away from acknowledging the actual situation. I have to command them for their integrity.
Defining the issue helps in finding the solutions to correct the situation.

Their approach to helping companies find Emiratis for some of their open positions is very structured, in
less than 2 weeks they create action plans with employers that have fewer than 50 vacancies (it takes
more time for the larger employers of course), they help define specific training programs for Nationals
(for example in Al Ain with Strata and a call centre for Etihad...), and they give 2 weeks to a company to
give feedback on a candidate before presenting that person for another position - it helps avoiding
overlaps of candidates between different organisations.

There is a lot more that needs to be done, and still many challenges ahead especially as we are talking
about changing a whole culture. I believe however that they have good intentions and that they are on a
right path to supporting the vision of having more Nationals in the private sector, through sustainable
approaches and also trying to work with the education sector so that the school system produces more
UAE Nationals with the skills relevant in the workplace today and in the future.


Related posts :

Emiratisation and Compensation & Benefits - part I
Emiratisation and Compensation & Benefits - part II
The limits of emiratisation quotas
Feedback from the ASHRM conference 2012

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An update on the project on expat retirement schemes in the UAE
http://compensationinsider.com/an-update-on-the-project-on-expat-retirement-schemes-in-the-uae/

The day before the 2012 ASHRM conference officially started last week, I was fortunate to be invited at
the inaugural breakfast for the event. Besides the usual networking with a small group of select
participants, we were given two presentations, one by Mercer (the results of a survey they specially
performed for the conference), and one from an official from the Department of Economic Development
in Dubai.

As you are surely aware, the DED has now been involved for some time with the World Bank and several
other stakeholders including UAE business representatives to look into the implementation of a
retirement scheme for expat workers in the UAE.

Framework for the establishment of a retirement scheme for expats in the UAE

The DED is looking for a win-win-win, with :

Long-term stability for expats
Employer and expat funds managed professionally, maintaining or reducing the employer's cost of
doing business
A labour market that becomes more attractive and provides long-term funds in the financial sector.

The DED reckons that the current system leaves employees exposed because most employers don't
ring-fence the End of Service funds as liabilities, therefore the funds are used as "free cash" / working
capital by the employer. The issue is, as was encountered when the global crisis hit the UAE a few years,
when the companies get in financial trouble, given they have not really set the funds aside, then the EOS
may not be paid to the employee and they have no way of ever getting access to the money.

So here are the guiding principles the DED has been considering :

The scheme must maintain or lower the cost of doing business
The scheme should sustain the UAE as a regional hub for talent
It should take into account and build on the existing End of Service Benefits requirements
It should incorporate the industry's international best practices
It should be flexible and scalable
It should be universal (covering all workers in the UAE)
There should be transparent stakeholders management.

The outcome so far - a glimpse of future expat retirement in the UAE ?

They have also taken into account a number of elements and success factors, such as : governance,
having professional advisors, transparency, communication, proper management of the funds, financial
returns and risks, and scheme administration.

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And some of the constraints they have to look into include the cost impact on the organisation,
contribution levels, portability of the scheme and visa-related issues.

The ideas cover a wide range of aspects regarding the development of the scheme :

The individual accounts would be financed through mandatory and/or voluntary contributions
The funds should be invested by a central pension fund, but with several portfolio managers
The funds should be invested according to guidelines ensuring security, returns and liquidity
The employer contributions should equal the existing EOS obligation
Personal contributions from the expats may be added as well
The eligible beneficiaries might have flexibiliy to be self-sponsored during transition periods in
moving between jobs
The government will not provide any form of guarantee on the funds accumulated and the financial
returns.

Some comments and further thoughts on future retirement schemes in the UAE

It was the first time that I heard that the DED was working on pensions for the whole UAE. I had never
read it clearly spelled out in the newspapers, and given that it is a Dubai entity not a federal one leading
the thought process, I had always assumed this was a Dubai project. So that was my first (basic) learning.

Another interesting point was the focus on the centralised pension fund. The government is keen on
making the scheme universal including covering the labourers and other lower-paid staff, who currently
can't access any type of long-term investment scheme in the UAE because their absolute individual
contribution is too low for banks and insurance companies to create long-term savings products for them.
Yet, as was explained, these labourers and other blue collars have a savings ratio of up to 50% which is
transferred back to their home country, and a lot of them contribute to home pension schemes - so why
not try to benefit from a part of that stream in the UAE ?

And I have to say I was surprised to hear about the possibility of portability of the scheme. Of course
portability between employers is a very important factor, but hearing that if a person has been employed
for a long time and has sufficient funds in their pension scheme, they might be able to be self-sponsored
during their transition between jobs was a big surprise to me. I suppose it means they would use the
amounts from the pension fund as a collateral guarantee against the self-sponsored visa.

If anything of the sort eventually gets implemented, this will be a massive positive factor for giving peace
of thought to the expat community, ensuring liquidity in the job market and therefore reduced costs of
hiring to employers as they would have access to a larger talent pool already based in the UAE : people
in-between jobs would not have to leave the country 30 days after their visa is cancelled (if they meet the
conditions to self-sponsor). I think it is a great concept that is definitely worth exploring in more detail to
ensure its true feasibility.

Overall, I have to say that I was pleasantly surprised by the quality of the presentation. Clearly not only
the speaker really knew his topic in and out, but also the DED has been conducting professional thinking
about the concept. The speaker emphasized the interest of the DED to interact with all sorts of
stakeholders including businesses, so if you want to share ideas, feedback or comments with them you

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should get in touch and get heard :-).


Related posts :

Pensions landscape - Europe and GCC part I
Pensions landscape - Europe and GCC part II
The UAE 40th National Day and the Compensation manager
Feedback from the ASHRM conference 2012

_______________________________________________

page 23 / 34


Feedback from the Arabian Society for HR Management
(ASHRM) conference 2012
http://compensationinsider.com/feedback-from-the-arabian-society-for-hr-management-ashrm-conference
-2012/

I was kindly invited to attend the 11th International Conference and Exhibition from ASHRM (Arabian
Society for Human Resource Management) that took place last week in Abu Dhabi.

It was my first time at that conference and I felt it was a different kind of conference to the ones I usually
attend in the region. For one, it is accompanied by an exhibition hall where various providers to the HR
community have booths. I saw representation from such varied companies as Hay, Franklin Covey, Saba,
and LinkConsult (the only providers of in-person trainings towards World at Work certification programs
- it was nice to see C&B highlighted through their presence), and more companies were represented.

The other reason I felt the conference was different, is that ASHRM has a distinct Saudi Arabia feel to it.
Even though the Society has a GCC regional scope (with Chapters in Abu Dhabi and Oman), it is
originally a Saudi organisation and a lot of the delegates as well as speakers were from KSA.

I would like to especially point out the amazing Saudi ladies that I met, spoke with, or listened to during
my attendance at the conference. They were outspoken, articulate, educated, excellent English speakers,
open-minded, ambitious, with a nice sense of humour.... and had strong ideas about some of the social
restrictions that the fair gender faces in the Kingdom. They were especially vocal about the harassment
they say they face in the workplace, the lack of interest from companies to hire females, the restrictions to
mobility (and therefore access to work) as they are not allowed to drive, the need to get a husband or
father permission for them to work, the lack of opportunities, and the pressure and discouragement they
face from male members of the family.

And mind you, the outcry is bubbling very close to the surface, as it did not even take any encouragement
for these topics to be openly discussed, even by panel speakers and presenters in front of cameras and the
full audience of a few hundred delegates. A majority of the audience were male Saudi and GCC Nationals
- and a lot of them were nodding in agreement. It seems that society in Saudi Arabia is ready to move on
to being more inclusive of the females social representation, at least in the workplace. Or maybe people
who attend these conferences are more socially open than other segments of the population ? I don't know
for sure as I have never been to KSA - up until just a few years ago, as a single female I could not enter
the Kingdom for a business trip without the presence of a male guardian...

Anyway, Saudi social and political life apart, I thought I would share a few facts or comments that I heard
during the one day that I was able to attend, especially the afternoon session focused broadly on C&B and
the subsequent panel debate. So there you are :

The World's Most Admired Companies manage to pay a Total Fixed Cash 5% lower than their peers,
thanks to :

Differentiating more based on performance

page 24 / 34


Giving line managers tools to use and communicate reward levers
Educating employees to appreciate the value of total reward
Tying a larger portion of the total reward to performance
Sourcing more candidates internally
Building more flexibility in reward to ensure a better fit to more employees.

Some statistics on the Saudi population :

27 million Saudis + 8 million expats
Population growth rate 3.19% per year (massive)
11.4% are less than 5 years old
31.4% are less than 15 years old
65% are less than 25 years old
64% of the population is between the ages of 15 and 64.
Unemployment : men 6.9% - women 28.4% - total 10.5%
78.3% of female university graduates are unemployed (it seems the claims from the Saudi
ladies are supported by the numbers...)

There is a maternity leave with 3 years at 25% of salary called "infant care vacation" but very few ladies
take it up. I have not had a chance to verify this information. But I know that in Europe, some countries
like France offer a parental leave to either parent up to 3 years... without pay... but a significant number of
parents take it up, especially in low income families (because infant care is more expensive than the
woman's salary in many cases) or in high income families (because either of the parents makes a choice to
spend time with the child in its first years and they can afford that educational choice). But in both cases
I'm sure they would love to be paid 25% of their salary to look after the child.

The gap between education being provided and skills requirement is taking a long time to be closed.
Leadership (implied: of the nation) is required to set the direction.

All are aware that the pay gap between the public and private sector is not sustainable in the long-term. A
speaker from Kuwait mentioned that the government there gives subsidies for the private sector to hire
Kuwaiti Nationals in order to encourage kuwaitisation targets. I think it's a good idea that could be
replicated in the other GCC countries, although maybe more difficult to implement in Saudi as it is a
much larger country.

A speaker from Singapore pointed out that in his country, the only resource they have is their human
capital. Their culture is based on meritocracy : they don't give freebies from the government but give
rewards for the "right" behaviour, for example through tax rebates for money you spend on specific
actions. And he stated that in Asia there is a hunger for work, which is different culturally from the
privileged society in the GCC.

page 25 / 34


This comment received a lot of supporting nods in the audience, and sparked some comments from other
speakers on : what is a worthy job in the region ? How do we create those jobs ? How do we shift the
mentality of the locals to understand that there are multiple layers/depths of jobs in the market (because
not every Saudi or Emirati etc can be a leader or a manager). Generally speaking, there was consensus
that the Gen Y entitlement mentality needs to change.

The panel also debated around the culture of accountability :

The region needs to learn to separate the personal relations and "wasta" from the work culture.
Without it, it is not possible for a manager to have the tough conversations around performance,
results, attendance etc - and it limits the possibilities for growth of the local employees as they don't
get pushed out of their comfort zone.
And if by law you can't be sacked, you can't really be held accountable. Ultimately this apparent
protection of the national employees is actually hindering their development and that of the country.

Overall, the day I attended addressed a lot of the social and business issues of Saudi Arabia, but by
extension to the rest of the GCC region too, except maybe to a lesser extent for the accessibility of
females in the workplace.

I will cover the VIP opening breakfast presentation on pensions in the UAE in my next post.

If you attended the conference, please feel free to share the main points you noted from days 2 and 3 in
the comments section !

Related posts :

An update on the project on expat retirement schemes in the UAE
Remuneration, engagement and the GCC employee
The UAE 40th National Day and the Compensation manager
The limits of Emiratisation quotas

_______________________________________________

page 26 / 34


How to be a Compensation leader - even without a title
http://compensationinsider.com/how-to-be-a-compensation-leader-even-without-a-title/

Robin Sharma was in Abu Dhabi recently and I attended his seminar "Lead without a title" with my
team... and a few hundred more people. Robin is the author of The Monk Who Sold His Ferrari and The
Leader Who Had No Title among other best-sellers, and delivered an interesting performance on (self )
empowerment in work and life.

He is a great speaker who masters all the right techniques to engage his audience : few slides, with few
words so that you focus on him not the screen. Activities to do with the people sitting next to you so that
you start to appply some of the concepts he mentions (and it does not feel too passive). Great voice
control, from whispering to highly nergetic. Clever use of storytelling, either through him speaking or by
video. Appeal to logic and emotion. Repeating the more important sentences 3 or 4 times to fully
emphasize the message. Interjecting a bit of humour. All perfect, maybe even a bit too polished - I
wonder how many times he has delivered the exact same speech ?

But beyond the mastery of the speaking techniques, the message was an inspiring one. Of course it was
not geared specifically towards Compensation & Benefits folks, but the advice applies to all, junior or
senior in the organisation so I thought I would share :-)

After mentioning that people on average spend more time planning their vacation than thinking about
their goals, he urged us to think about what we really want to achieve.

He spoke about the difference between real work and busy work. Conquer you addition to distraction as
distraction and interruptions eat more than 2 hours of our life every day. There is no need to check email
constantly ! Give people the gift of presence, your presence.

We should be aware of our inner saboteur : as a child, we are taught to fit in and that creates a fear of
success as we would stand out if we are successful. So we focus on busy work during our most valuable
hours. As a result "most people live the same year over and over 75 times, and call it a life".

Think about how you want to be remembered at the end of your life, your dreams, your values. Who did
you become ? You need to express your talent. And how many lives did you help ? Once you find out
what is going to be the most important for you at the end of your life, then... make it the most important
now - or you risk repeating yourself over and over again for 75 years without becoming fully
self-expressed and achieving what is truly essential to you.

We also fear that if we achieve our goals, we will have to change. But "the discomfort of change is
always better than the heartbreak of stagnation". As Robin put it, if you're not feeling uncomfortable at
least once a day, you are not making much progress - this is very true, because how do we learn ?
Through doing new things, and of course these take us out of our comfort zone. So think about it : the
work you're avoiding may be the one with the most growth for you... Remember that "potential
unexpressed turns to pain".

page 27 / 34


Robin also shared some productivity tips with the audience, to help on the way to realising our dreams
and true goals :

1. Join the 5 o'clock club : get up early and focus on yourself. Do the daily 5 : What 5 things do you
need to do today to make it a productive day (don't forget the "little wins") ? And at the end of the
day, do the nightly 5 : what are 5 good things that happened to you today ?
2. Spend one hour per day without stimulation (TV, radio, internet, games....). This is needed for the
brain to function properly and not become overloaded with information. Robin was adamant that the
advice was actually based on neuroscience, not psychology, and he showed some research results
supporting the recommendation.
3. Work in 90 minutes cycles + 10 minutes recovery (also based on neuroscience).
4. Get fit like Madonna
5. Eat less food
6. Get more done
7. Get a massage once a week to help reduce the stress and prolong a healthy life. He actually
commanded the UAE for offering easy access to such activities, and for having so many residents
that take taking care of oneself seriously.

Finally, I would like to share a bunch of great leadership quotes from the seminar (with thanks to my
colleague Zouhair for helping collect them), because you don't need a title to be a leader, as "you are the
CEO of your own job".

Leadership is about 3 things: inspiration, influence, and impact.
People may forget what you said, people may forget what you do, but they won't forget how
you made them feel.
Don't fall in love with the way you think. Learn to take risks.
If you cannot motivate, no one sees you as a leader.
The best way for people to listen to you is for you to listen to them.
How good are you depends on what you do when no one is watching.
Leadership is about impact no about money.
Provoke people to do jobs they never thought of doing.
Leave people better than you find them.
If you lose conversation with your team you lose business.
A job is an opportunity to show human talent (to influence others)
Victims make excuses, leaders deliver results.
Small daily improvements over time create extraordinary results.
Focus is more important than intelligence.
Work on your career not in your career.
Your job as a leader is to leave a trail of leaders.
Delegation is firing oneself.
Victims love entertainment, leaders love education.
Real recreation is supposed to recreate you.
What the victim calls genius the leader calls practice. ( It took me 30 years to doing it in 30
seconds)
Shift from Command and Control to Connect and Create.
Don't derive power from your title but from the relationships you have built.

page 28 / 34


The goal is not to live forever. The goal is to create something that will.

So what do you say ? Do some of these recommendations apply (or not) to your work in HR and
Compensation & Benefits ? Have you always felt that you never needed a title to be a leader ?

Related posts :

Fresh professional goals for 2012 as a Compensation leader
A few career and life lessons from my last job in Italy
No, no-one becomes a Compensation Manager in 2 days !

_______________________________________________

page 29 / 34


Earth Day - Will you care ?
http://compensationinsider.com/earth-day-will-you-care/

It's Earth Day today and this won't be my usual post on Compensation & Benefits related topics.

Caring for the environment - a family affair

You see, I believe that we should all look for sustainability- the world population is now more than 7
billions, and we need to ensure that we can all live on the planet properly.

On a daily basis, I do a few things already, such as taking showers not baths, never leaving the AC on
when I'm out of the house during the day, switching lights off when I leave a room, and most importantly
making donations to offset my carbon footprint whenever I travel by plane (some airlines even offer to
offset directly while you book your ticket). And from time to time I enrol in local actions such as cleaning
a beach in Abu Dhabi, or participating to Earth Hour.

Reading them, it may sound like a lot but really this is easy as most of it is based on good habits - I have
to thank my parents for that. As a child being raised in post oil-shock Europe in the 70s, I learned to save
electricity. And my aunt Nanou and uncle Domi have always been very eco-oriented and in the past few
years, have had a growing influence on my eco-consciousness.

Even though they are not that well-off, they drive a hybrid car, they eat only organic food, mostly locally
produced (and almost no meat) and they also look to buy fair trade whenever they can. It costs them more
money than buying the cheap chinese, indian or vietnamese imports, but for them every action counts and
they have made their beliefs part of their daily lives. For that, I really respect and honour them.

So - what did I do this year for Earth Day ?

1. I signed the Global Energy Petition which demands the adoption of renewable energy and energy
efficiency targets, universal renewable energy access - and is going to be delivered to world leaders
at the United Nations Conference on Sustainable Development (RIO+20) in June, 2012.
2. I participated to One Billion Acts of Green and pledged to be more active in recycling.
3. And I made a donation to save Yusani National Park in the Amazon. The government of Ecuador
has pledged to not exploit the oil field underneath this unique and rich biosphere, of the rest of the
world help them receive half of the profit the government would make if they were to export the oil.

These 3 acts took me only a few minutes and made me feel a sense of renewed energy in my beliefs that
we can lead a good life on earth, if we all take some steps towards sustainability. I would like to
encourage you to think about it.

You can help too

You don't need to make public commitments or even to spend money. Simple things like using less water

page 30 / 34


(I heard recently that the UAE is the country with the most water consumption per capita in the world) or
switching off or reducing the air conditioning add up.

So if you decided to do something for Earth Day, or if you already do some "green stuff", share it with us
in the comments and give us some inspiration !

_______________________________________________

page 31 / 34


A double celebration
http://compensationinsider.com/a-double-celebration/

Today is special for 2 reasons : first, it's my birthday and I have actually taken the day off. I'm treating
myself to a long week-end in Dubai at the Raffles hotel, and intend to fully enjoy their exceptional spa
treatments :-)

... And second, this my 100th blog post. A big milestone ! When I started Compensation Insider late last
August, all I could think of was : will be able to sustain writing 3 posts per week for even 2 months ? And
here we are, a little over 7 months later. I have maintained the rythm, and to my surprise, discovered that
there is still a lot that I want to write about so you can expect to see more new content.

They say blogging is a marathon not a sprint, and it is very true. Most of the time, it takes me 2 hours to
put together a post, between getting the idea, structuring my thoughts, the actual writing, and then all the
work around the post itself such as optimising it for search engines and finding pictures. And of course, I
also take some more time to read about blogging and learning new techniques so that I can try to deliver
an engaging experience to my readers to the best of my ability.

Today I want to share with you the lost of the top 10 most read posts so far, and I will also share with you
which posts are my personal favorites. I hope this will give you an opportunity to explore some posts you
may have missed, and if you are new to Compensation Insider, don't hesitate to subscribe by mail or RSS
to receive my latest writing automatically !

So here we are :

Top 10 posts most read on Compensation Insider

1. Compensation aspects of HR trends for 2012
2. Calibration of employee ratings : a rigid rule ?
3. A few career and life lessons from my last job in Italy
4. Percentiles : an easy way to figure it out
5. Of average salaries in Europe
6. What are the benefits of a good performance management system ?
7. How many points on your performance rating scale ?
8. From job evaluations to salary scales : the basics
9. Does competency-based performance management really work ?
10. Fresh professional goals for 2012 as a Compensation leader

My personal favorites

1. The Formula One effect on performance management
2. 4 skills to master for influential Compensation and Benefits

page 32 / 34


3. The limits of emiratisation quotas
4. Compensation surveys - the ultimate buyer checklist
5. Two uses of LinkedIn Groups for the compensation professional
6. GCC Nationals pay : a lesson from the y2k bug
7. The safeguards in salary benchmarking
8. Board and quotas : for or against them ?
9. Are you benchmarking... or copying ?
10. Before you jump into a technical compensation answer...

Finally, if you like what you read and you are in Dubai at the end of May or the end of June, please feel
free to introduce yourself at any of two conferences where I will be a speaker. I look forward to meeting
you there !

_______________________________________________

page 33 / 34


Compensation and Benefits with a Middle East flair

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