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CFO Insights — Rethinking rewards — How personalized programs can attract and retain talent

Published on: Jun 14, 2018

For decades, designing rewards programs was a relatively straightforward exercise of finding the right mix of compensation and traditional benefits, such as health insurance and vacation time. Those days are over.

These days, rewards are in the midst of a transition from the strictly standardized to the highly personalized. Companies at the forefront of this wave are creating rewards programs that are delivered more continuously, aligned more closely with individual preferences, and based more fully on an employee’s whole contribution — to the team and the organization. Done correctly, this new approach to rewards can also become a huge competitive advantage.
 
However, our research indicates that few companies are making this transition successfully. Ninety-one percent of companies still follow the utterly conventional practice of conducting salary reviews only once a year — or even less often. Even worse, organizations rate their rewards program with a net promoter score of -15, and only 21 percent would recommend their program to others.

Many businesses as well as human resources (HR) leaders recognize the problem. In this issue, we’ll discuss why rewards practices are lagging behind, while other talent HR strategies have evolved.

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