Background: The HR department of a globally active technology company was occupied implementing strategic directives following a series of major changes to the company's organizational structure. However, in order for targets to be met it was necessary to motivate the company's employees and boost their loyalty. The CHRO decided to revise the company's system of variable compensation and related performance management processes for executives, introducing a new level of professionalism. The necessary resources and specialist expertise for this task could not be supplied from within the company at short notice.
"Our HR team has a lean structure. We needed on-site support from hkp/// to be able to concentrate on the strategic elements of the project. Thanks to the trust that they built up, hkp/// was also able to work closely with our international partners and take on a substantial part of the operational project responsibility."
André Schiffer, Chief HR Officer
Task: The task was to analyze the existing system of variable compensation and identify any weaknesses in it and the related processes. Possible solutions should then be developed and discussed on the basis of the analysis. The result was a new system of variable compensation that included individual qualitative employee targets, behaviors and competences alongside quantitative targets. To strengthen managers' responsibility and promote communication, a performance management process was developed linking target achievement within the system of variable compensation directly to career measures. When the design was complete, both processes needed to be implemented in a new IT system. This began with the creation of a technical design in collaboration with the external IT provider. Following various test phases, the processes were then gradually implemented in the IT system for all operational HR areas internationally.
Role of hkp/// group: hkp/// first drew up a process plan. Regular meetings were held with HR and the CHRO to inform them about any developments and findings. As part of the process of designing a new system of variable compensation and related processes, hkp/// analyzed and identified possible areas for improvement. Using the results of these findings, hkp/// developed a new system and processes for variable compensation and performance management that took into account the CHRO's strategic objectives. This system and processes were then agreed with the client. Thanks to our expertise in calibrating financial indicators, we were able to set performance targets both at the level of the entire company and for individuals that supported the new strategy and guaranteed employee motivation.
Having built a good level of trust in the first part of the project, we were then asked to implement the new system and processes on an operational level. hkp/// formed the interface and coordinator between the operational HR areas internationally, the strategic HR department in the corporate center and the external IT provider. We were also responsible for the final documentation of processes and systems and written materials on use and implementation.
Challenges: Implementing the strategic directives as effectively and as smoothly as possible while ensuring a unified corporate culture in a globally active company called for a structured approach and profound expertise in the systems and processes that were being altered.
The subsequent implementation on an operational level, particularly with the new IT system, required the existence of a strong basis of trust. Coordination of the various internal areas and the non-specialist external service providers, plus the fact that the people involved were spread around the globe, called for a clear yet flexible process structure and a proper understanding of individual perspectives, prior knowledge and peculiarities.
Solution/outlook: The new systems and processes for variable compensation were successfully implemented. They have since been used independently by the client on an annual basis. The company plans to extend the performance management system to other employees, adapting it where necessary. Since completion of the project, the company has regularly consulted hkp/// on related matters and other compensation issues.
"At a time when the HR department was busy working on strategic tasks, hkp/// was able to provide comprehensive support in the design of a new compensation system. Thanks to the trust we established, we could also take on operational responsibility for implementing the new concept in the new IT system, working closely with international partners from inside the company." David Voggeser, hkp/// Senior Consultant
* Photo by Slava Bowman on Unsplash
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