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Productivity

4 Takeaways from Weekly Total Rewards Action Call: COVID-19 Business Response

4/23/2020

New information related to the coronavirus pandemic comes by the
minute, and organizations have much to update employees on at the same pace.
Employee communication was the focus of the April 23, 2020 meeting of i4cp’s
Total Rewards COVID-19 Response group, where attendees
from companies such as Microsoft, Siemens, Tyson Foods, Genentech and many more
shared their strategies for communicating to the workforce, who is spearheading
that effort and why. Some highlights: 

1. Organizations are involving multiple members of
their executive leadership teams in the effort to communicate
coronavirus-related information and updates to the workforce. One of today’s
polls asked who was responsible for relaying this type of information to
employees. The majority of respondents (59%) said that a combination of
executive leadership team members was responsible (CEO, CHRO, COO, etc.), while
38% specified the CEO, 32% said CHRO and 16% indicated that the head of
corporate communications spearheaded this effort. Today’s guest speaker, Letty
Cherry, general manager of communications at Microsoft, shared the makeup of
two teams within the company that are responsible for disseminating
COVID-19-related information to Microsoft employees, customers and other
stakeholders; teams comprised of Microsoft’s crisis management task force, as
well as leaders from legal, HR and facility security, for example.

2.  Employers are also conducting surveys to collect
employee feedback and input, gauging sentiment regarding whether they feel they
have the resources and tools they need to their job at home, and whether they
feel as productive, less productive or more productive since being sent to work
remotely in the midst of the pandemic. The frequency of these surveys obviously
varies, but the consensus among the group on this call is that these surveys
should be conducted at least weekly.

3. Post-coronavirus pandemic, the majority of
companies anticipate making some level of change or enhancements to their
employer-provided healthcare plans for 2021, according to today’s second poll.
Fifty percent of today’s participants said they expect their organizations to
change or enhance their 2021 plans to an average extent, while another 28% said
their organizations figure to make changes or enhancements to a low extent.
Another 19% said they don’t foresee making any changes at all, and just 3%
anticipate changes to be significant.

4. We’ve seen sustained interest in what companies
are doing in terms of incentive plan options, specifically related to sales
compensation and whether organizations are considering changes to base pay to
offset incentive reductions, for example. We’re seeing similar discussion
around short- and long-term incentive plans and whether organizations plan to
make changes to 2020 plans such as changing objectives or substituting stock
awards for cash payments, for example.

4/16/2020

When business will return to some semblance of normalcy remains to be
seen. But it’s increasingly clear that organizations are giving more attention
to return-to-work efforts. Return to work was the focus of the April 16, 2020
meeting of i4cp’s Total Rewards Action – COVID-19 Coronavirus Response group,
where attendees shared strategies concerning flexible work and travel policies,
alterations to physical work spaces and addressing employees concerns about
coming back to a shared workspace, for example. Some highlights: 

  • Based on what we heard from the total rewards
    leaders on today’s call, organizations are confident, if not exceedingly so,
    about where they are in terms of policies around benefits, travel, flexible
    work, etc., whenever employees begin to return to offices or other physical
    locations en masse. One of today’s polls asked the group to rate how confident
    they felt in this regard. The majority (61%) said they are confident to a
    “moderate” extent that they’re adequately addressing policies concerning
    benefits, restricted or adjusted travel and so on. Another 26% said they are
    confident to a low extent or not confident at all. Just 13% responded that they
    felt comfortable to a very high extent.
  • Employees have reservations about returning to
    the office, to varying extents. This hesitation might be borne out of safety
    concerns, while other employees are going to managers with questions as to why
    they can’t keep working remotely on a more permanent basis. According to
    another poll of this group, 40% say they’ve encountered resistance from some
    employees, but not a majority. Another 36% say they’ve gotten pushback from a
    very small number of employees, with 20% they have many employees expressing a
    wish to continue working remotely after coronavirus-related restrictions are
    lifted.
  • Organizations are also giving thought to the
    office environment to which employees will return. Tim Price at Genentech, for
    example, pointed out that the “neighborhood” concept may need to be revisited,
    as a variety of people can cycle through the same workstation on a given day.
    Peter Manias from Microsoft expressed a similar concern, noting that there will
    be obvious concerns with employees in shared spaces, even if the organization
    opts to limit the number of people permitted in a given space at one time
    (which some companies in China have already done). Recent i4cp pulse surveys
    have addressed concerns around companies’ approach to rethinking physical work
    spaces, with 52% of organizations saying they are likely to decrease the amount
    of real estate and/or size of offices required as a result of more flexible
    work arrangements. Another 43% said that, post-pandemic, they could possibly
    limit the number of people allowed in the same workspace at the same time
    post-pandemic.
  • There’s a sense among some companies that
    internal communication – and a deeper sense of connection – is actually
    improving in the midst of the pandemic. Guest speakers Eric Tuch, senior
    director of total rewards, and Birgit Zeidler, director of HRBP at F5 Networks,
    discussed this in their presentation, which focused primarily on return to
    work. Tuch noted how leadership at the global company, whose workforce is
    largely remote, has prioritized leading with empathy through this unprecedented
    crisis. Tuch (and many others in today’s group) mentioned that this has
    permeated their organizations, with employees, managers and leadership alike
    feeling a sense of kinship that didn’t necessarily exist before, at least not
    to the extent that it does right now. Tuch and others noted that employees are
    connecting on a personal level during video calls, meetings, etc., bonding over
    the challenges – providing childcare and/or homeschooling, for example – that
    so many employees are currently facing.

3/26/2020

The coronavirus pandemic continues, with no clear answers as
to when some sense of normalcy will return to our home and work lives. It will
be a while before we truly see just how far-reaching COVID-19’s impact will be
on the world of work. But we know it’s already having an impact on business in significant
ways. 

During this week’s call, which brought together total rewards leaders, we delved into how the pandemic is
affecting rewards and compensation at their organizations, and how they
continue to adjust, from rethinking sales compensation to offering premium pay
for employees who come onsite to work, and much more. 

Some highlights: 

  • While not a large number
    of companies are currently offering hazard pay/premium pay for frontline
    employees, some organizations are beginning to strongly consider it, as
    evidenced by the conversation around today’s presentation from Kamil
    Kaczynski, rewards leader at Peloton, where employees receive hazard pay
    for continuing to carry out roles that call for customer interaction, such
    as delivering and assembling Peloton bikes at customers’ homes.

  • The results of one
    of last week’s pulse survey questions found few companies making changes
    to sales compensation (44%). However, another 40% said they are
    considering it. This seems to be gaining momentum, based on the
    conversation/questions during today’s call, where many attendees noted
    that they are looking into how to adjust sales compensation/incentives in
    the forms of lowered sales goals, reduced threshold payouts, etc.
  • Employers
    might be wise to consider providing relief to affected employees under IRS
    Section 139. Added to the Code after 9/11/2001, Section 139 allows employers
    to make qualified disaster relief payments to employees that would include
    payments to reimburse medical, personal, living, or funeral expenses, for
    example, incurred as a result of the coronavirus pandemic. These payments
    are typically deductible for employers and excluded from recipient’s
    income. Kamil noted the use of such payments at Peloton, which drew a
    number of questions from the group.
  • One of today’s live poll
    questions during the call asked if employers are providing any type of health screening
    for employees who are still working onsite. The clear majority (78%) are
    not, but others are considering it, by introducing temperature checks
    and/or other measures.

3/19/2020

There’s uncertainty in all directions for business leaders
at the moment, as the COVID-19 pandemic takes us all into uncharted territory.
At the March 19, 2020 meeting of i4cp’s Total
Rewards Board
and other total rewards leaders, some of the broad-ranging
challenges they’re facing at the moment were discussed. The topics ranged from how
to compensate sales teams in the midst of the pandemic spread, to offering
incentive bonuses for employees to come onsite to work, and how to relieve
those employees for whom working from home isn’t a viable option. Some
highlights: 

1.     COVID-19
is not yet significantly affecting companies’ approach to performance
management, with most taking a wait-and-see approach. Our poll found 55% of
respondents saying no, the virus has not impacted performance management at
their organization. Another 23% said yes, they are delaying performance
reviews, promotions and other talent decisions, with an additional 23% saying
they don’t know how COVID-19 is affecting performance management within their
company. 

2.     While
the new legislation around paid sick leave does not obligate large employers to
provide any sort of paid sick leave to employees in the wake of this pandemic,
the majority of large companies are. Our poll saw 50% offering 14 days (the
amount of time affected individuals are strongly encouraged to
self-quarantine), and another 14% offering more. The remainder are providing
less than 14 days (21%) and 14% not offering any paid sick leave at all. 

3.     Companies
that haven’t already made changes to their compensation and rewards soon will,
or are at least planning a strategy for moving forward. Some steps include
adjusting comp for salespeople who are unable to travel, meet potential clients
in person, etc., providing incentives for employees to come onsite to work,
paying employees who are unable to come to work and also unable to work from
home, for example. 

4.     Organizations
are also starting to give serious though to retention strategies in the event
that pay freezes or other cuts to compensation become necessary.

3/12/2020

The discussion of the first virtual gathering of total rewards leaders covered the following compensation & benefits issues: 

Compensation

  • How
    are organizations determining comp & benefits for consultants/contractors/ vendors?

    • Some are shifting to seeing contractors as employees
    • Leading
      orgs are now extending some compensation to contractors (i.e. Lyft/Uber)
  • Is
    your org doing anything to accommodate by easing travel ban, relaxing
    salespersons quotas or making payout adjustments?

    • Some are requiring a business case for going into the office in high-risk areas where we want
      people to work from home. What
      is a worthwhile reason?
  • Re:
    Salespersons quotas – reinforcing that this is your opportunity, no immediate
    changes to quotas; reluctance to relax quotas – travel/safety implications?
  • Voiding
    requirements on # of in-person meetings and allowing virtual meetings to count
    in place of those
  • At
    what point do we change policies?
  • Many
    clients are instituting policies that do not allow visitors (limiting in-person
    sales discussions, etc.)
  • How
    do we support employees who cannot afford to practice “social distancing”
    or work from home?
  • How
    do we work with compliance?
  • Help
    understand the impact and hard lines of in-person meetings/events

Benefits

  • How
    do we adjust pay and PTO for mandated or volunteer 14-day quarantine time?

    • Most are paying
      individual quarantined for 14-day period
  • Have
    you made any adjustments to your health benefits, such as paying for testing?
  • Walmart
    – No penalty for those uncomfortable coming into work (even if not sick/under
    quarantine)
  • What
    does flex time look like?
  • Will moving to remote work now make this an ongoing part of the culture?
  • How
    do we address concerns about abuse of these new policies?
  • Extend
    trust to employees in the face of health crisis
  • Handle
    issues from WFH on a case-by-case basis
  • Potential
    lower productivity for those WFH with children at home (school cancellations)

Long-term Impact

  • How
    are you adjusting performance management practices?

    • Be
      sensitive & empathetic
    • Create teams to check-in on how people are
      adjusting/feeling
  • How
    do we mitigate expected impact and crisis mgmt.?
  • How
    should we treat higher-risk populations within our workforces?
  • Encourage
    people to listen to doctor’s advice
  • Placing the responsibility on the employee to take care of their health

Communication

  • Keep in mind the importance
    of abiding by the policies and guidance of local law enforcement, hospitals,
    client policies
  • Agility
    and flexibility – Leaders need to set the tone that they are making decisions
    based on what they know today, but will update as new information becomes
    available; anticipate tough adjustment for workforce
  • Providing
    online real-time platform with latest updates and messaging from business
    leaders (“Reach out to your HRBP for more information”)
  • Importance
    of tracking region-specific information

Misc

  • Health
    Insurance Carriers (IRS Guidance) – What co-pays should be waived for employees
    on corporate health insurance plans?
  • Next Practice
    – “Learning as a Reward” – How do we identify and reward the leaders that
    continue to drive performance, collaboration (and well-being) throughout this
    crisis and virtual platform?
  • Virtual
    leadership as a performance metric
  • Investing in
    the workforce – What is the mix of our workforce investment (stock
    compensation, etc.)?
  • Considering
    impact to company valuations

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