NESTLE TOTAL REWARD REVIEW EXAMPLE OUTPUT REPORTmycomm.co.uk/design/Nestle-ToolKit7/downloads/0x....

NESTLE TOTAL REWARD REVIEWEXAMPLE OUTPUT REPORT

MERCER 1

IntroductionTotal Reward review output

• This example output report is designed to help you feedback the results of your Total Reward review to yourmarket once completed– It may be useful to review this before conducting your review so that as you complete each tool you will

have some understanding of how the output will contribute to the review as a whole

• In this report you will pull together all of your work during the review in order to present a concise andinformative report for presenting back to management in your market

• This is just a template and you should feel free to add or delete as much content as you think is necessaryto create a report that is useful in your market. You may also find it useful to put certain slides into anappendix in order to shorten the body of the report

MERCER 2

Executive summaryTotal Reward review

• You should include an executive summary at the beginning of your report

• The executive summary should summarise the business case for doing the Total Reward review andexplain what the report will contain

• It might also be useful to provide a high-level summary of which groups of people you have spoken to inorder to complete the review

MERCER

Executive summaryTotal Reward review activities

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Leadershipinterviews

Employeeresearch

Costmodelling

Marketanalysis

Include high levelinformation about the

activities you carried out







MERCER

Current stateReview of current total rewards offering

§ Base salary§ Cash allowances§ Relocation allowances

§ Life insurance§ Medical care§ Mother and child care§ Baby-food program§ Corporate cars and parking§ Support in hard-life

situations§ Meal voucher/allowance§ Other fringe benefits

§ Career development§ Performance evaluations§ Trainings§ Recognition programs§ Long service awards

§ Safety programmes§ Flexible work arrangements§ Staff shop§ Fitness and sport events§ Corporate holidays§ Lifestyle and wellness

programmes§ Employee volunteer

programmes

Fixed Pay Benefits Growth Work-Life environment

§ Short-term bonus§ Sales incentives§ One-time bonus§ Long-term incentives

Variable pay

The table below reflects the current state of the Total Reward offering in the market. This was used as astarting point for discussions when conducting the review with senior leaders and employees.

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5

HR & SENIOR MANAGEMENT INTERVIEWS

MERCER 6

HR & Senior Management interviewsIntroduction

• In this section it is useful to summarise who you have spoken to in order to complete the review includingwhich senior leaders you interviewed, the timeframes for the interviews and any other relevant information

MERCER

Prevailing perspective

• Nestlé has a wide variety of training programs – however often employees do not take the initiative to find andapply for these

• On the whole, managers are very good at encouraging employees to go on training courses• Nestlé invests a lot of money in training and developing employees• The training and development offering is very good but perhaps not communicated as effectively as it could be• Have heard Nestlé employees complaining about the lack of training and development – but feel like this is just

due to communication rather than reality

Opposing perspective

• There is not a lot of time or money given to training and development• Most courses aren’t advertised properly to employees

ThemesTraining and development

You may need to includemore than one version of

this “themes” slide. If thereare too many slides it may

be helpful to include them asan Appendix instead.

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MERCER

Elements of Total RewardsLeadership opinions

Elements Key insights

Workforce structure • No real issues with the structure of the workforce

Performance andaccountability

• Performance management works well but the reward program does not differentiate between highand low performers very effectively

Monetary reward andrecognition

• The level of reward and recognition (base pay and variable pay) is good compared to market

Benefits and growth • An overall thought that the benefits provision was perceived as average by the majority ofemployees – this could be a communication issue rather than the actual benefits

Work-life environment • Very good – no complaints at all about this aspect of Total Reward

Communicating andconnecting

• A perception amongst the senior management team that Nestlé's Total Reward proposition is notwell communicated to employees and that this has serious implications for employee satisfactionand engagement

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MERCER

Senior ManagementWhat works well What works less well

§ Base salary is above market§ Training opportunities§ The process for setting objectives§ Speed of decision-making processes

§ Lack of communication over total rewardpackage, especially benefits

§ Bonus scheme§ Private medical insurance outpatient cover§ Too much paperwork

HR LeadershipWhat works well What works less well

§ Total Reward proposition is ahead of the market§ Wellness screening§ Work/life balance

§ Distinguishing between high and low performers§ Sickness policy§ Internal equity§ Over-reliance on HR to make reward decisions


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MERCER

§ Base pay is broadlyacceptable

§ People generallyunderstand what drives payreview

§ Perception that pay is in linewith the market median

§ Good provision butemployees are notnecessarily aware of thevalue of their benefits

§ Nestle does a good job of“looking after” employees

§ There is some division inbenefits depending on levelof seniority but this is notwithout reason and isgenerally perceived as fairthroughout the organisation

§ Car allowance is not alignedto grades

§ Great training anddevelopment provision

§ There is a lot ofopportunities for Nestleemployees to attendedtraining sessions in avariety of topics

§ Training opportunitiescould be bettercommunicated

§ Managers and employeesreport that it is not alwaysclear where the nextcareer move is

§ Very happy with thisaspect of Total Reward

§ Employees at Nestle seemto be able to easilybalance work with the restof their life

§ Very good provisions foremployees with youngfamilies

§ Good health benefits suchas reduced gymmemberships etc.

Pay Benefits Growth Work-Life environment

§ There is a lack oftransparency in how thebonus pool is funded

§ Not enough differentiationbetween high and lowperformers

Variable pay


Using the current state of Total Reward in the market for reference, members of the leadership team gavetheir opinions on each element of the current Total Reward package

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MERCER

Strategic segmentation analysisLeadership opinions

Higher skills gapLess critical role for the business

Higher skills gapCritical role for the business (now and in the

future)

Lower skills gapLess critical for the business

Lower skills gapCritical role for the business

Relational sales

E-Marketing group

Customer analytics

Legacy producttechnicians

Accountancy

Relationshipmanagers in

product B

Operationsmanagers

Criticality of the role

Skill

sga

p-s

carc

ity

This matrix was populated by considering which specific talent groups are critical to achieving the strategicgoals of the market. This was then validated in leadership interviews and finalised based on their feedback.

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12

EMPLOYEE RESEARCH

MERCER 13

Employee researchIntroduction

• In this section it is useful to summarise the type of employee research you have conducted in order tocomplete the review (i.e. all employee survey, focus groups etc.)

• You should also include some details around the number and size of the focus groups, participation in thesurvey and the timing of both of these activities

MERCER

The attractions of working at NestléEmployee opinions from the focus groups

What attractsemployees toworking at Nestlé?

• Employees felt that the Nestle brand is very powerful and that havingthis on your resume was a real attraction to working at Nestlé

Has working atNestlé lived up tothose expectations?

• Most employees felt that working at Nestlé had on the whole lived upto expectations. However, some felt that certain aspects (e.g. trainingand development) that they expected to be really good, did not meettheir expectations

What role doesrewards play inattracting andretainingemployees?

• The rewards proposition at Nestlé is very attractive. However, this ismainly due to base and variable pay, rather than the Total Rewardsproposition

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MERCER

Summary of views on Total RewardsEmployee opinions from the focus groups

What works well? What works less well?

§ Base salary is ok§ Training opportunities§ Wellness screening§ Work/life balance§ The process for setting objectives§ Speed of decision-making processes

§ Internal equity§ Lack of communication over total reward

package, especially benefits§ Bonus scheme§ Private medical insurance outpatient cover§ Distinguishing between high and low

performers§ Sickness policy§ Too much paperwork

Can these views be broken down into employee segments?

• It appears that employees in the London office were less happy on average than those in Manchester.For example, while most employees in London felt that the work/life balance was not good, all employeesin Manchester thought it was a real benefit of working at the company

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MERCER

Focus groups summaryKey points of feedback from the focus groups

Total Reward component Priority Perceived monetaryvalue

Base pay High High

Variable pay High Low

Work/life balance High Low

Training and development High Low

Medical insurance Low High

Flexible holidays High Low

Child care vouchers Low Low

What components of Total Rewards did they NOT mention?

• There was not a lot of emphasis on training and development in the focus group• Health benefits such as cycle-to-work or gym memberships were not mentioned at all in the

focus group

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MERCER

Employee review of guiding principlesKey points of feedback from the focus groups

Guiding principle Employee views

Driven by performance and role fulfilment Views were varied around this. Some felt thatperformance was the best way to reward people whileothers felt that this was too subjective

Applied consistently Employees were very happy with this principle

Flexibility for key functions/groups Not so happy about the segregation of employees withdifferent benefits for each

Greater variable pay The majority of employees agreed with this principle

Supports the company values and businessneeds

The majority of employees agreed with this principle andthey could all understand why this was imperative

Simple and easy to understand

There was a lot of support for this principle. Employeesfeel like currently the Total Reward proposition is difficultto understand and they wanted more clearcommunication around their reward package

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MERCER

Perspectives on the futureKey points of feedback

Component ofTotal Rewards Comments around what they would like to see change

Training anddevelopment Would like to see more training and development offered to all employees

Base pay The majority of employees feel that they are paid below the market on base pay

Holidays Felt they more flexibility to buy and sell holidays is needed

Component ofTotal Rewards Comments around what they would like to see NOT changed

Variable pay Happy with the way the bonus scheme is operated and feel that this is fair

Medicalinsurance Happy with the current provision

Work/life balance Most employees felt they had a good work/life balance and did not want the cultureof Nestle to change with regards to this

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MERCER

Prevailing perspective

• There is not a lot of time or money given to training and development• When an employee asks to go on a training course they are often told that they can’t have the time away from

the office to do so• Most courses aren’t advertised properly to employees• Managers do not advocate training to their employees and many actually feel discouraged

Opposing perspective

• Nestlé has a wide variety of training programs – you just need to search the intranet and take initiative in orderto attend them

• Some managers are very good at encouraging employees to go on training courses

Themes from employee surveyTraining and development

You may need to includemore than one version of

this “themes” slide. If thereare too many slides it may

be helpful to include them asan Appendix instead.

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MERCER

Themes from employee surveyGraph showing importance and satisfaction

This graph depicts the difference between the importance of current benefits and the satisfaction with thoseparticular benefits based on responses from the employee survey

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MERCER

Themes from employee surveyFour box grid showing importance and satisfaction

• Child care• Dental insurance

• Sports/social• Life assurance• Retirement• Medical insurance

• Income protection insurance • Paid time-off• Training programs

Importance

Sat

isfa

ctio

n

100%

100%

0%

Look into these benefits

Consider enhancing these benefits

No change required

Based on the graph on the previous page, current benefits were categorised into four quadrants withdifferent actions resulting from each quadrant

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22

COST MODELLING

MERCER 23

Cost modellingIntroduction

• In this section it is useful to summarise how you gathered the data in order to analyse costs, whether youmade any assumptions in relation to the cost of certain elements of Total Reward and if relevant, anycaveats to the final outputs

• It might also be useful to explain the type of outputs you have included in this document before youpresent them

MERCER 24

Cost modellingBase salary by department

Use these boxes to provide a high-levelsummary of what the outputs are showingand to provide comments on the data and

the outcome of the analysis



MERCER 25

Cost modellingTotal Reward cost by grade





MERCER 26

Cost modellingPay for performance





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MARKET ANALYSIS

MERCER 28

Market analysisIntroduction

• In this section it is useful to summarise how you gathered the data for this analysis, which roles wereincluded in your original WIN submission (and are therefore covered in this analysis) and the parametersyou used to determine whether a compa-ratio was on market or not

• It might also be useful to explain the type of outputs you have included in this document before youpresent them

MERCER 29

Market data analysisMarket comparison by grade

GRADE BASE SALARY TOTAL CASH TOTAL DIRECT TOTAL REM.123456789A

Based on target market data:

GRADE BASE SALARY TOTAL CASH TOTAL DIRECT TOTAL REM.

123456789A

Based on actual market data:

On market Above market Below market Unable to benchmark

Use these boxes to provide ahigh-level summary of what the

outputs are showing and toprovide comments on the data

and the outcome of the analysis




MERCER 30

Market data analysisPay mix by grade

Nestle:

The market:







MERCER 31

Market data analysisCorrelations

Use these boxes to provide a high-level summary of what the outputs are showing and to provide commentson the data and the outcome of the analysis

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PRIORITIES FOR CHANGE

MERCER 33

The table below shows the top three issues that stood out in each area of analysis. These helped to focus ourprioritisation of the issues and to think about steps for change. The following pages explore these issues inmore detail and ultimately describe where the priorities for change lie

Leadership interviews:

1. Concerned about skills to meet businessobjectives

2. Think that too much is being spent on TotalReward with no return on investment

3. Believe that training and development withinthe company is good

Employee views:

1. Feel they are being paid below the market2. Think the work-life balance at Nestlé is good3. Don’t feel there are good opportunities for

career advancement

Cost modelling:

1. A lot of money is being paid on healthinsurance

2. The sales segment is much more highly paidthan other workforce segments

3. Work-life and Growth segments are relativelycost effective

Market perspective:

1. Base salaries are in line with market2. Target total cash is above market3. Total remuneration is in line with market

Summary analysisKey observations

MERCER

Total Rewardelement

Guiding principles (what rewards should be doing)

Market competitive Aligns Total Rewardswith performance

Clear and understoodby employees

Attract, retain andmotivate employees

Support corporatebehaviours

Supports businessgoals

Fixed pay

No issues identified Good correlation withperformance

Reasons for increaseunclear to employees

Not a reason for joiningNestle n/a

No differentiation ofrewards in key

segments

n/a

Variable pay

Slightly below marketin some grades

Some correlation withperformance

Feel that this is wellcommunicated

Not a reason for joiningNestle

Bonuses paidirrespective of behavior

High differentiation inkey segments

Benefits

A feeling that these arewell below market n/a High level of

understandingPlay a small part in

attraction & retention n/a Benefits cost too high

n/a n/a

Growth

n/a No alignment withperformance

Opportunities not wellcommunicated Big attraction to Nestle No link identified Performance goals

aligned to strategy

n/a

Work-life

n/a n/a Opportunities not wellcommunicated

Play a small part inattraction & retention No link identified Some key segments

affected by gaps

n/a n/a

= broadly working well. No immediate action required= major improvements can be made= action needed= being addressed in HR policy

Assessment of state of current TotalRewardsDrawing insights together

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MERCER 35

Priorities for changePrioritisation matrix

MERCER 36

Next steps

• It is a good idea to end with an explanation of what the next steps are following the outcome of the TotalReward review

• This helps to inform the reader of what actions this review has resulted in and to draw their attention towhere change may be occurring in future

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NESTLE TOTAL REWARD REVIEW EXAMPLE OUTPUT REPORTmycomm.co.uk/design/Nestle-ToolKit7/downloads/0x....

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