0. Director of Consulting Services,
Kevin Empey
Director of Consulting Services,
Towers Watson
Introducing and Maintaining Market Based Reward Systems

1. New Order, New Challenges
Introducing and Maintaining Market Based Reward Systems
Kevin Empey
Towers Watson
October 6th, 2015

3. The employee perspective ? - Some warning signs for employers….
40% likely to leave their employer over the next 2 years. 10% in 2010
70%
of employees are often worried about their financial future
40%
Feel their retirement benefits meet their needs
Less than
29% of employees see clear link between performance and pay
Only
70%
believe they will have to leave their current employer for better career and pay prospects
Over
50%
of employees say they have been working more than before and believe that this trend will continue
50% of highly engaged employees also report high stress and low well being scores
Almost
Source: Towers Watson Global Workforce Studies - IRELAND Towers Watson Talent Management and Rewards Study - EMEA
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© 2015 Towers Watson. All rights reserved.

4. Sustainable engagement
Top drivers of attraction, retention and sustainable engagement in Ireland
Attraction
Retention
Sustainable engagement
Base pay/salary
Leadership
Job security
Career advancement opportunities
Workload & Work-Life Balance
Learning and development opportunities
Goals & Objectives
Career advancement opportunities
Trust/confidence in senior leadership
Empowerment
Organisation’s reputation as good employer
Length of commute
Image
Source: Towers Watson 2014 Global Workforce Study — Ireland

5. …Making way for the 21st century work experience
Safe to say that the classic employer-employee deal is becoming extinct…
…Making way for the 21st century work experience
It’s unaffordable.
Shared responsibility and risk.
It’s outmoded.
A sum greater than its parts.
It’s ineffective — and inefficient.
Many sizes; many shapes.
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6. Emerging topics in shaping future reward and pay
- Current issues underpinning reward reform in Ireland
Cost and investment balance
- Employer / Employee co-investment
Performance, recognition & differentiation
Total Reward and EVP view – value versus cost
What next for variable pay ?
Governance, regulation & control
- Changing nature of the reward function itself
Simplification and flexibility
Delivery system
- Manager capability, comms, technology…
Market alignment &
Segmentation 6
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© 2014 Towers Watson. All rights reserved.

7. Pay Prospects 2015 / 2016 2015 Actual 2016 Projected
General Industry = 2.2
FS = 2.4
HT = 2.4
PHS = 2.2
2016 Projected
General Industry= 2.5
FS = 2.5
HT = 2.7
PHS = 2.5
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© 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

8. Salary Review Practice 2009 – 2015
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9. An opportunity to reframe a new deal with employees
EMPLOYEE EXPERIENCE
EMPLOYER EXPECTATIONS
Employees’ interactions with the company, colleagues and customers, the work environment and total rewards that drive their behaviors and engagement
The desired affiliation, mindset and behaviour that optimise the employee’s contribution to business success
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© 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

10. Providing a customer grade employment story & experience… - A whole new level of EVP design and delivery is ahead

11. Total Rewards on a page……
Career & Environmental Rewards
Performance-Based Rewards
Foundational Rewards
Total Rewards
Program Delivery
Program Design
Strategy & Structure
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© 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

12. Reward reform and change can be too focused on the “what” at the expense of the “how”……
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© 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

13. For example - Pension Change
Shock/anger
Can you do this?
Is this legal?
Why is this happening?
Agreement
I have to manage my pension. Show me how
Blame
Who’s fault is this?
Is there another solution?
Why can’t the Company put more money in?
Leadership/ manager ownership
Acceptance
I understand the need for change.
I don’t like it but I need to move on.
Understanding
What does this mean for me?
Show me some examples
What are my options?
Proposal pack: booklet, letter, feedback form
Financial education tools: games, profilers
Website: Q&As, feedback, videos, updates
Personal Illustrations
Modellers and ready ‘reckoners’
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© 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

14. Implementation Challenges & Trade Offs – impossible to keep everyone happy

15. Reward Reform – Final Thoughts & Observations
Know your customer(s) and your business case
Define your “story” for your current and future talent needs
A talent (and reward) strategy to get where you want to go
Design with the future in mind – transition compromises may be necessary
Manage the change at the pace that will bring success
Implement & communicate effectively, support your managers
Be open to change over time
towerswatson.com
© 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

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