PREVIOUS MEETING NOTES - TOTAL REWARDS

Please note that going forward, meeting notes are included with the recordings of the weekly calls. View the latest recordings and research recaps here.

4/30/2020

A number of companies and senior leaderships have been making sacrifices to help their employees. 

4/28/2020

We wanted to make note that Institutional Sharehold Services (ISS) has issued policy application guidance for public companies, in light of the pandemic.

4/23/2020

New information related to the coronavirus pandemic comes by the minute, and organizations have much to update employees on at the same pace. Employee communication was the focus of the April 23, 2020 meeting of i4cp’s Total Rewards COVID-19 Response group, where attendees from companies such as Microsoft, Siemens, Tyson Foods, Genentech and many more shared their strategies for communicating to the workforce, who is spearheading that effort and why. Some highlights: 

1. Organizations are involving multiple members of their executive leadership teams in the effort to communicate coronavirus-related information and updates to the workforce. One of today’s polls asked who was responsible for relaying this type of information to employees. The majority of respondents (59%) said that a combination of executive leadership team members was responsible (CEO, CHRO, COO, etc.), while 38% specified the CEO, 32% said CHRO and 16% indicated that the head of corporate communications spearheaded this effort. Today’s guest speaker, Letty Cherry, general manager of communications at Microsoft, shared the makeup of two teams within the company that are responsible for disseminating COVID-19-related information to Microsoft employees, customers and other stakeholders; teams comprised of Microsoft’s crisis management task force, as well as leaders from legal, HR and facility security, for example.

2.  Employers are also conducting surveys to collect employee feedback and input, gauging sentiment regarding whether they feel they have the resources and tools they need to their job at home, and whether they feel as productive, less productive or more productive since being sent to work remotely in the midst of the pandemic. The frequency of these surveys obviously varies, but the consensus among the group on this call is that these surveys should be conducted at least weekly.

3. Post-coronavirus pandemic, the majority of companies anticipate making some level of change or enhancements to their employer-provided healthcare plans for 2021, according to today’s second poll. Fifty percent of today’s participants said they expect their organizations to change or enhance their 2021 plans to an average extent, while another 28% said their organizations figure to make changes or enhancements to a low extent. Another 19% said they don’t foresee making any changes at all, and just 3% anticipate changes to be significant.

4. We’ve seen sustained interest in what companies are doing in terms of incentive plan options, specifically related to sales compensation and whether organizations are considering changes to base pay to offset incentive reductions, for example. We’re seeing similar discussion around short- and long-term incentive plans and whether organizations plan to make changes to 2020 plans such as changing objectives or substituting stock awards for cash payments, for example.

4/16/2020

When business will return to some semblance of normalcy remains to be seen. But it’s increasingly clear that organizations are giving more attention to return-to-work efforts. Return to work was the focus of the April 16, 2020 meeting of i4cp’s Total Rewards Action – COVID-19 Coronavirus Response group, where attendees shared strategies concerning flexible work and travel policies, alterations to physical work spaces and addressing employees concerns about coming back to a shared workspace, for example. Some highlights: 

  • Based on what we heard from the total rewards leaders on today’s call, organizations are confident, if not exceedingly so, about where they are in terms of policies around benefits, travel, flexible work, etc., whenever employees begin to return to offices or other physical locations en masse. One of today’s polls asked the group to rate how confident they felt in this regard. The majority (61%) said they are confident to a “moderate” extent that they’re adequately addressing policies concerning benefits, restricted or adjusted travel and so on. Another 26% said they are confident to a low extent or not confident at all. Just 13% responded that they felt comfortable to a very high extent.

  • Employees have reservations about returning to the office, to varying extents. This hesitation might be borne out of safety concerns, while other employees are going to managers with questions as to why they can’t keep working remotely on a more permanent basis. According to another poll of this group, 40% say they’ve encountered resistance from some employees, but not a majority. Another 36% say they’ve gotten pushback from a very small number of employees, with 20% they have many employees expressing a wish to continue working remotely after coronavirus-related restrictions are lifted.

  • Organizations are also giving thought to the office environment to which employees will return. Tim Price at Genentech, for example, pointed out that the “neighborhood” concept may need to be revisited, as a variety of people can cycle through the same workstation on a given day. Peter Manias from Microsoft expressed a similar concern, noting that there will be obvious concerns with employees in shared spaces, even if the organization opts to limit the number of people permitted in a given space at one time (which some companies in China have already done). Recent i4cp pulse surveys have addressed concerns around companies’ approach to rethinking physical work spaces, with 52% of organizations saying they are likely to decrease the amount of real estate and/or size of offices required as a result of more flexible work arrangements. Another 43% said that, post-pandemic, they could possibly limit the number of people allowed in the same workspace at the same time post-pandemic.

  • There’s a sense among some companies that internal communication – and a deeper sense of connection – is actually improving in the midst of the pandemic. Guest speakers Eric Tuch, senior director of total rewards, and Birgit Zeidler, director of HRBP at F5 Networks, discussed this in their presentation, which focused primarily on return to work. Tuch noted how leadership at the global company, whose workforce is largely remote, has prioritized leading with empathy through this unprecedented crisis. Tuch (and many others in today’s group) mentioned that this has permeated their organizations, with employees, managers and leadership alike feeling a sense of kinship that didn’t necessarily exist before, at least not to the extent that it does right now. Tuch and others noted that employees are connecting on a personal level during video calls, meetings, etc., bonding over the challenges – providing childcare and/or homeschooling, for example – that so many employees are currently facing.

4/2/2020

The environment that businesses operate in has been changing by the minute in the weeks since the Coronavirus pandemic hit the United States in earnest. At the April 2, 2020 meeting of i4cp’s Total Rewards COVID-19 Response group, total rewards leaders and their peers in compensation and rewards discussed how the pandemic continues to alter how they and their organizations function, from designing long-term incentive plans to making accommodations for employees who are balancing working from home while caring for school-age children.  We were joined by guest speaker Ani Danelian Huang, president of the Center of Executive Compensation. Some highlights: 

FOUR TAKEAWAYS

  • While it might be on the table at some point, most publicly-traded companies are not conducting a stock option repricing or option exchange program. One of this week’s poll questions addressed this, with 83% saying no, they have not made a decision to do so at this time, with another 13% saying they’re considering it.
  • A clear majority of companies do not have a designated funding source in place to assist employees experiencing economic hardship as a result of the COVID-19 pandemic. Close to three-quarters (73%) of respondents to today’s second poll question said they do not have a committed funding source for this purpose, with only 5% saying they are giving it consideration.
  • With regard to other comp trends, Ani Danelian Huang, president of the Center of Executive Compensation and this week’s guest speaker, noted that many companies are delaying goal setting as part of long-term incentive plan design for executives.
  • Companies are beginning to give thought to considerations designed to help full-time employees who are working from home and are also responsible for homeschooling and/or childcare, in the form of either more flexible work hours or the option to work part-time, for example. 

3/26/2020

The coronavirus pandemic continues, with no clear answers as to when some sense of normalcy will return to our home and work lives. It will be a while before we truly see just how far-reaching COVID-19’s impact will be on the world of work. But we know it’s already having an impact on business in significant ways. 

During this week's call, which brought together total rewards leaders, we delved into how the pandemic is affecting rewards and compensation at their organizations, and how they continue to adjust, from rethinking sales compensation to offering premium pay for employees who come onsite to work, and much more. 

Some highlights: 

  • While not a large number of companies are currently offering hazard pay/premium pay for frontline employees, some organizations are beginning to strongly consider it, as evidenced by the conversation around today’s presentation from Kamil Kaczynski, rewards leader at Peloton, where employees receive hazard pay for continuing to carry out roles that call for customer interaction, such as delivering and assembling Peloton bikes at customers’ homes.

  • The results of one of last week’s pulse survey questions found few companies making changes to sales compensation (44%). However, another 40% said they are considering it. This seems to be gaining momentum, based on the conversation/questions during today’s call, where many attendees noted that they are looking into how to adjust sales compensation/incentives in the forms of lowered sales goals, reduced threshold payouts, etc.

  • Employers might be wise to consider providing relief to affected employees under IRS Section 139. Added to the Code after 9/11/2001, Section 139 allows employers to make qualified disaster relief payments to employees that would include payments to reimburse medical, personal, living, or funeral expenses, for example, incurred as a result of the coronavirus pandemic. These payments are typically deductible for employers and excluded from recipient’s income. Kamil noted the use of such payments at Peloton, which drew a number of questions from the group.

  • One of today’s live poll questions during the call asked if employers are providing any type of health screening for employees who are still working onsite. The clear majority (78%) are not, but others are considering it, by introducing temperature checks and/or other measures.

3/19/2020

There’s uncertainty in all directions for business leaders at the moment, as the COVID-19 pandemic takes us all into uncharted territory. At the March 19, 2020 meeting of i4cp’s Total Rewards Board and other total rewards leaders, some of the broad-ranging challenges they’re facing at the moment were discussed. The topics ranged from how to compensate sales teams in the midst of the pandemic spread, to offering incentive bonuses for employees to come onsite to work, and how to relieve those employees for whom working from home isn’t a viable option. Some highlights: 

1.     COVID-19 is not yet significantly affecting companies’ approach to performance management, with most taking a wait-and-see approach. Our poll found 55% of respondents saying no, the virus has not impacted performance management at their organization. Another 23% said yes, they are delaying performance reviews, promotions and other talent decisions, with an additional 23% saying they don’t know how COVID-19 is affecting performance management within their company. 

2.     While the new legislation around paid sick leave does not obligate large employers to provide any sort of paid sick leave to employees in the wake of this pandemic, the majority of large companies are. Our poll saw 50% offering 14 days (the amount of time affected individuals are strongly encouraged to self-quarantine), and another 14% offering more. The remainder are providing less than 14 days (21%) and 14% not offering any paid sick leave at all. 

3.     Companies that haven’t already made changes to their compensation and rewards soon will, or are at least planning a strategy for moving forward. Some steps include adjusting comp for salespeople who are unable to travel, meet potential clients in person, etc., providing incentives for employees to come onsite to work, paying employees who are unable to come to work and also unable to work from home, for example. 

4.     Organizations are also starting to give serious though to retention strategies in the event that pay freezes or other cuts to compensation become necessary.

3/12/2020

The discussion of the first virtual gathering of total rewards leaders covered the following compensation & benefits issues: 

Compensation
  • How are organizations determining comp & benefits for consultants/contractors/ vendors?
    • Some are shifting to seeing contractors as employees
    • Leading orgs are now extending some compensation to contractors (i.e. Lyft/Uber)
  • Is your org doing anything to accommodate by easing travel ban, relaxing salespersons quotas or making payout adjustments?
    • Some are requiring a business case for going into the office in high-risk areas where we want people to work from home. What is a worthwhile reason?
  • Re: Salespersons quotas - reinforcing that this is your opportunity, no immediate changes to quotas; reluctance to relax quotas – travel/safety implications?
  • Voiding requirements on # of in-person meetings and allowing virtual meetings to count in place of those
  • At what point do we change policies?
  • Many clients are instituting policies that do not allow visitors (limiting in-person sales discussions, etc.)
  • How do we support employees who cannot afford to practice "social distancing” or work from home?
  • How do we work with compliance?
  • Help understand the impact and hard lines of in-person meetings/events
Benefits
  • How do we adjust pay and PTO for mandated or volunteer 14-day quarantine time?
    • Most are paying individual quarantined for 14-day period
  • Have you made any adjustments to your health benefits, such as paying for testing?
  • Walmart - No penalty for those uncomfortable coming into work (even if not sick/under quarantine)
  • What does flex time look like?
  • Will moving to remote work now make this an ongoing part of the culture?
  • How do we address concerns about abuse of these new policies?
  • Extend trust to employees in the face of health crisis
  • Handle issues from WFH on a case-by-case basis
  • Potential lower productivity for those WFH with children at home (school cancellations)
Long-term Impact
  • How are you adjusting performance management practices?
    • Be sensitive & empathetic
    • Create teams to check-in on how people are adjusting/feeling
  • How do we mitigate expected impact and crisis mgmt.?
  • How should we treat higher-risk populations within our workforces?
  • Encourage people to listen to doctor’s advice
  • Placing the responsibility on the employee to take care of their health
Communication
  • Keep in mind the importance of abiding by the policies and guidance of local law enforcement, hospitals, client policies
  • Agility and flexibility - Leaders need to set the tone that they are making decisions based on what they know today, but will update as new information becomes available; anticipate tough adjustment for workforce
  • Providing online real-time platform with latest updates and messaging from business leaders (“Reach out to your HRBP for more information”)
  • Importance of tracking region-specific information
Misc
  • Health Insurance Carriers (IRS Guidance) – What co-pays should be waived for employees on corporate health insurance plans?
  • Next Practice - “Learning as a Reward” – How do we identify and reward the leaders that continue to drive performance, collaboration (and well-being) throughout this crisis and virtual platform?
  • Virtual leadership as a performance metric
  • Investing in the workforce – What is the mix of our workforce investment (stock compensation, etc.)?
  • Considering impact to company valuations

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