Towers Perrin on Rewards Governance

Do you have a handle on your investment in recognition across all your locations? Are you confident all expenditures on employee recognition are being properly accounted for and taxed – especially in your international locations? Do those recognition efforts align with company goals, or even the goals you have set for the recognition initiative?

If not, you’re not alone. Towers Perrin’s latest report, Effective Global Governance and Oversight of Total Remuneration Programs: an Elusive Business Imperative, found:

* Only 44% (of multinational organizations surveyed) report their global remuneration policies are closely integrated with company business goals
* Lines of authority for global governance and oversight remain fragmented in many organizations
* Fewer than half use benchmarks or metrics to monitor performance of their investments around the world.

But the most important finding in the paper was:
“Only 14% view their measures as very useful in determining whether total remuneration investments actually support the execution of key business goals. These findings suggest that many companies have yet to build truly robust global governance frameworks that both inform key reward investments and enable leaders at all levels to measure the return on their investments in talent on an ongoing basis.”
Whether you define these remuneration efforts under the broad umbrella of pay-for-performance or more narrowly in an employee rewards and recognition initiative, the fact remains if you don’t know where the investment is going or measure the impact, then you’re just throwing money away. Our own survey revealed similar findings – a tremendous waste of resources as recognition programs fail to meet CEO needs and do not contribute to company strategy.

What do you need to gain the governance you need over your employee investments? The tools to measure and track? Buy in from line mangers? Buy in from executives? Tell me in comments.

1 comment(s):

At May 16, 2009 11:24 AM, Ann Bares said...


In a sense, the TP findings on reward governance are nothing short of stunning. The first page of the TP white paper notes that reward expenses amount to 60% (or more) of revenue for many global corporations - and yet this investment (likely the one largest cost of doing business for most of them) is subject to such weak oversight and direction.

Hopefully this is changing as companies around the globe respond to the challenges of the economic crisis.

Great post - and thanks for the link to the TP resource! Also great to have had the opportunity to share the panel with you and Jon Ingham in this past week's Globoforce webinar on rewards.