David Lobo, chief HR officer, GE India
Inventions that included the world’s first X-ray machine and electric toaster in the late 1800s got General Electric (GE) off the ground.
Now the company does business in more than 100 countries, with about 60% of its revenues coming from outside the U.S. To simplify its sprawling conglomerate, GE recently sharpened its focus on regional markets by creating a Global Growth Organization based in Hong Kong. This allows the many operating divisions to focus on geographic regions while GE creates a more cohesive identity around the world.
An integral part of this reorganization is GE India.
“To enhance its growth prospects in India, GE implemented a new organizational structure for GE India,” says David Lobo, GE India’s chief HR officer. “Different India-based business units — each with its own reward structure — were consolidated into one. The change made GE India not only more competitive, but also better able to attract the talent it needs.
This is important, as GE continues to brand GE India as a great place to work. The effort is evidence of GE’s belief in creating great environments in which to launch and advance careers, building strong local leadership teams and growing local talent pools by investing in employees’ development.
“In Asia’s fast-growing economy, there’s intense competition for workers with critical skills. The competition is particularly fierce for some categories of employees. We really needed a unifying reward framework that would help us attract and retain top performers. To do this successfully, we needed a common HR framework for all of GE India.
“We had to examine the unique characteristics of our multiple businesses, and meld them into one organization with a unified culture,” Lobo says. “It was critical for us to create One GE India.”
At the same time, company leaders wanted to help employees understand and appreciate the full value of GE India’s employee value proposition (EVP) by providing them with a broader, more holistic view of compensation, benefits, and intangible elements such as learning and career development.
The company turned to Towers Watson for help. “We wanted to build a strong partnership with a company that not only thoroughly understands the changing market and reward strategies, but also knows GE and its India operations,” says Leena Sahijwani, head of rewards at GE India. “Towers Watson checked off all of the boxes.
“Expertise in rewards was crucial. At GE, we view the reward package as a strategic tool for boosting the company’s performance. We needed a GE India reward framework that would align each HR program in the new structure with our business priorities. Also, we wanted to shape a philosophy closely aligned with GE’s global compensation philosophy that would act as a compass, providing direction for the development of future reward programs in the local context.”
Kulin Patel, Towers Watson senior retirement consultant, and Leena Sahijwani, head of rewards, GE India
First, the team needed to study the lay of the land. Before it could work on the new reward framework, it was important to understand the realities of various businesses at GE India.
“We wanted to fully understand the needs and challenges of our leadership and employees, as well as the company as a whole,” Sahijwani says. “We needed to get an accurate picture of how effective our HR and reward programs were. It was about recognizing the gaps between the way programs were, and the way they needed to be for improved attraction and retention.
“We hoped that a thorough analysis would give us the information we needed to create a solid framework — one that would reflect collective, company-wide thinking on how reward programs should relate to the business.”
The Towers Watson team began by analyzing GE India’s reward programs and HR metrics. The consultants thoroughly reviewed base pay, incentives, benefits, recognition programs and training opportunities. They also examined the organization’s workforce demographics, including each employee’s age, length of service, job functions and management level.
Next, the team conducted one-on-one interviews with more than 30 executives, business leaders and HR heads to explore each business unit’s reward framework. “We wanted to both understand their perspectives on rewards, and determine how the organization’s existing reward programs and EVP affected each business unit,” explains Kulin Patel, director of client account management at Towers Watson.
“From these interviews, we learned that most GE India employees wanted more flexible benefit offerings and user-friendly online tools for electing and managing their benefits. They also asked for variable pay tied to individual performance,” Patel says. “And the leaders said they needed tools and information that explained GE India’s compensation practices and how reward decisions are made.”
In response, HR drafted the organization’s new reward framework. “We thought the guiding philosophy was simple, transparent and fair. But because it needed to be effective throughout GE India, we didn’t only seek to satisfy leadership and HR. We took the draft out to the businesses,” Sahijwani says. “We conducted workshops with groups of primary stakeholders in the business units and listened to what they had to say.”
“This strategic work gave rise to several clear priorities for the next phase,” says Dhritiman Chakrabarti, total rewards practice leader for Towers Watson’s Asia Pacific region. “These included a new GE India variable pay program and the introduction of employee choice in the benefit offerings.”
Pointing the Way
“A reward framework should provide direction for all of the company’s reward programs,” says Subeer Bakshi, director of talent and rewards for Towers Watson in India, “and that’s exactly what GE India’s does.”
The framework guided GE India leaders as they developed several new workforce programs. “We recently launched a flexible benefits program and an online portal for our senior employees,” Sahijwani says. “We created a pilot program through which senior-level employees could elect benefits that we had never offered before, and they could trade off benefits to meet their individual needs.”
The pilot program gave employees considerable flexibility. They could choose from among medical insurance, life insurance, annual leave and other benefits. Employees were given a basic level of insurance coverage, but could opt for a different level that better suited their needs.
Along with these efforts, HR harmonized the organization’s compensation program and gave leaders more control over compensation decisions. To boost employee engagement and clarify the process, the HR team developed training sessions and other tools.
Another new program receiving good reviews is the Grow India Plan (GIP), a variable pay program that ties incentives and rewards to business priorities. GE India’s leaders hope the GIP will stimulate individual performance to drive business growth.
“Variable pay plays a leading role in our reward framework now,” explains Lobo. “Business leaders asked for this program and helped us to design it, so we had their buy-in and support from the start.”
David Lobo, chief HR officer, GE India, (center) with Leena Sahijwani, GE India’s head of rewards, and Subeer Bakshi, director of talent and rewards for Towers Watson in India
A Continuous Journey
Lobo insists that while the team has made a great deal of progress on creating One GE India, the journey continues. “To achieve what we envisioned at the start, we’ll need to continually tweak our programs. Our launch of the GIP and the flexible benefits program were important milestones on this journey. These programs are rooted in the principles and philosophy articulated in our reward framework. But it’s important for us to regularly review the progress we’re making with respect to our goals.”
Adds Sahijwani, “We’ve worked very hard to lay the foundation with a solid reward framework, and we’ve already reached many of our initial goals. To me, success in this initiative is having our business leaders champion our pan-India reward package and collaborate with each other in support of the philosophy.
“When GE India had separate business units with 14 different reward structures, we didn’t have that unity. But today, our managers and business leaders throughout India speak the same reward language and understand the value of our EVP. Our employees do, too — and we hope the same is true for the workers we need to attract. When it comes to getting and keeping the talent we need, that consistency and clarity are more important than ever.”
Putting a Reward Strategy to Work
Recent years have seen a surge of interest in applying reward principles in varied workforce programs’ design and delivery. As employers better understand the value of having an integrated reward portfolio, the barriers that have separated compensation, benefits, training and other reward elements are breaking down. And new technology is enabling efficient coordination across a broader range of reward programs.
At the start of the economic downturn, some organizations used rewards to mitigate the effects of employee benefit cuts. More recently, talent acquisition has been the driving force. This has been most evident in the fast-growing economies of Asia and Latin America, where there’s stiff competition for skilled workers.
Savvy employers around the world have learned that securing talent requires a compelling, differentiated EVP that goes well beyond pay and benefits. Towers Watson’s Global Workforce Study has found that attracting, retaining and engaging talent also requires a well-balanced mix of programs and cultural factors that include workplace flexibility, leadership style, career opportunities and more.
Today, the strongest reward strategies are comprehensive and flexible. They adapt to serve diverse, dispersed workforces and to reflect the varied work arrangements possible in today’s technology-enabled environment. They provide employees with meaningful choices within a consistent framework that operates efficiently across, as well as within borders. And when employers consider making particular investments, reward strategies reveal how the decisions will affect employee retention, engagement, productivity and a host of other factors.