Human Resource Management

About the Compensation Discipline

The Compensation Discipline deals with the various forms of direct compensation—that is, employees’ pay—that employers use to attract, recognize and retain workers. It includes designing and administering compensation systems including base pay, differential and incentive pay, and overtime. It also includes matters that focus on compensation-related careers, communications, legal and regulatory issues, technology, metrics and outsourcing, as well as effective compensation practices and global compensation issues. It does not include the various forms of indirect employee compensation—commonly referred to as “benefits,” which are encompassed in the Benefits Discipline.

Firms develop pay-for-performance culture in response to economic recovery in Asia

As Asia’s economies continue to demonstrate signs of recovery, an increasing number of organizations are moving towards a pay-for-performance culture by increasing target short-term incentive levels for executives, and placing greater emphasis on variable pay as a more flexible way to increase motivation according to a new study by Mercer.
Mercer’s Asia Executive Remuneration Snapshot Survey reveals a significant increase in the number of organizations that plan to implement base salary increases for executives in 2010 (up to 65% from 30% in 2009), indicating a brighter economic outlook in Asia. However, companies are not increasing base salaries as the primary means of motivating and engaging employees. The study also reveals that many organizations are now factoring individual performance into their STI plans, in addition to traditional financial measures such as revenue and profitability. Few changes have been reported across the region in terms of long-term incentive plan design, signaling companies are very much focused on short-term business turnaround.
Wei Zheng, Asia business leader with Mercer's rewards business, commented, “While many companies in Asia are... [continues]

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