Each week, i4cp convenes total rewards leaders to discuss the latest issues facing their profession and organizations amidst the ongoing COVID-19 crisis. Below are highlights from those calls.
In the wake of the coronavirus pandemic, total rewards leaders will be weighing many factors as they think about salary planning for 2021, such as unemployment figures and how the U.S. economy recovers from the damage wrought by COVID-19. Total rewards leaders from companies such as CoorsTek, Choice Hotels International and Mutual of Omaha gathered—along with special Q&A guest Steve Boddy, content director, total rewards at WorldatWork—to discuss this topic.
- Many organizations are taking a wait-and-see approach to salary planning for 2021. A recent i4cp instant poll of total rewards leaders suggested as much, with 58% of more than 50 total rewards professionals saying that no decisions have been made at their organizations with regard to salary planning for next year, and that all options are currently on the table. Another 26% saying their organizations will study market movement, and will likely follow their industry peers. As many participants noted on today’s call, there are various factors to consider when doing salary planning for next year, such as signals of economic recovery in the next few months as well as unemployment levels.
- Hero or premium pay, which has become more commonplace in the midst of the coronavirus pandemic, is likely to continue in some industries more than others. A number of companies, however, particularly in the retail sector—Kroger and Starbucks, for example—have either ended or will soon be putting an end to hero pay.
- More than half of organizations, according to WorldatWork research—have already paid their salary increases for 2020, or still plan to pay such increases. For example, some are on a Sept. 30 fiscal year, so wage increases were effective on Jan. 1, 2020. Others have continued with union increases but have delayed merits in 2020 for salaried employees, or have continued with their 2020 merit processes for hourly, non-union workers.
- At most organizations, salary reductions don’t appear to currently be on the table for 2021. In an instant poll of more than 50 total rewards leaders, i4cp found that 83% said their companies are not likely to reduce salaries next year. Another 10% reported that their organizations will definitely not reduce salaries in 2021.
It's fair to say that COVID-19 has upended the plans that every function within a given organization had heading into 2020. During the May 21, 2020 meeting of i4cp’s Total Rewards Action – COVID-19 Coronavirus Response call, total rewards leaders from companies such as McKinstry, Tyson Foods, Microsoft, Waste Management Inc. and many more shared how the coronavirus pandemic has affected their total rewards functions’ 2020 priorities, and what they’re doing to adapt. Some highlights:
- Heading into 2020, total rewards leaders
considered well-being and competitive pay their top priorities. In today’s
first instant poll, we asked participants on the call to share what their
organizations were focusing most on from a total rewards standpoint entering
this year. At 26%, well-being was the most common response, followed by
competitive pay (24%) and talent retention and professional development, at 16%
- Naturally, COVID-19 has shifted those priorities
in meaningful ways. Today’s guest speaker, Gordon Blasius, vice president of
compensation and benefits at Waste Management Inc., for example, noted how the
organization planned to expand its HR function by 25 employees heading into
2020, but will not likely be able to do so in light of the coronavirus
pandemic, and is waiting to see what long-term impacts COVID-19 has on its
business before making significant talent decisions. And while well-being is
still very much a priority, some organizations have pivoted from focusing
primarily on physical and financial well-being to mental and emotional health,
given the strain that employees everywhere are feeling during the current
- Employers are factoring the possibility of a
COVID-19 recurrence into their return-to-work strategies. Many participants in
today’s call expressed the need to allow for the potential of a resurgence of
the virus as they craft their return-to-the-workplace plans. This aligns with a
recent i4cp pulse survey of nearly 400 HR professionals, in which we found 42%
of organizations saying they have included contingencies related to a COVID-19
recurrence in their return-to-the-workplace strategies, with another 35% saying
its something that will be included as they continue to develop their plan.
- Total rewards leaders expect the coronavirus pandemic to affect their annual salary planning activity for calendar year 2021, but are waiting to see how before making decisions in this area. With salary planning scheduled to be the focus of i4cp’s May 28, 2020 Total Rewards Leader COVID-19 Response call, we asked today’s participants what impact they anticipate COVID-19 having on their annual salary planning activity for 2021. The majority (58%) said that no decisions have been made yet, and all options are on the table. Another 26% said they will study market movement, and likely follow their industry peers. No respondents said they expect to be market-aggressive in the next salary increase cycle.
The COVID-19 pandemic has severely tested the well-being of employees everywhere. In addition to the physical and mental toll the coronavirus has taken, many workers are feeling a financial strain as well. The role that financial health plays in employees’ overall well-being was the main topic of discussion for the May 14, 2020 meeting of i4cp’s Total Rewards Action – COVID-19 Coronavirus Response call, where total rewards leaders from companies such as BIG Graphic North America, Genentech, Elkay Manufacturing and many more shared their strategies for helping employees navigate the financial challenges they face as a result of COVID-19, and how they plan to emphasize financial health as part of their broader employee well-being initiatives going forward.
- Organizations are emphasizing employee financial health as part of their overall approach to employee well-being, as evidenced by the results of our first instant poll. When asked to gauge the level of priority their companies are placing on financial well-being, 56% said their organizations are making it a priority as part of their strategy related to overall employee health. Another 19% said it is a “high priority” within their organizations.
- That investment in financial well-being, and overall employee well-being, figures to continue. The recently published i4cp report, Next Practices in Holistic Well-Being: The Performance Advantage, gathered data from more than 550 organizations, and found that four in 10 organizations invest up to 10% of their compensation and benefits budgets each year in employee well-being, and plan to increase that spend in the near term. The group discussed this data point on today’s call, with many organizations agreeing that well-being will be a key part of their compensation and benefits budgets going forward.
- The COVID-19 pandemic has underscored the need to provide tools and resources to aid employees in maintaining their financial health. Today’s guest speaker, Barbie Winterbottom, chief people officer at BIC Graphic North America, discussed this in a Q&A, where she shared what BIC is offering employees, such as on-demand pay benefits to help employees navigate financial crises. Winterbottom also stressed the value of such benefits as a recruitment and retention tool, and the importance of communicating the availability of these resources to employees, and sharing the accountability for employee well-being.
- COVID-19 has also changed the degree of emphasis organizations are putting on employee financial health, to some extent. Today’s second instant poll posed this question, with 33% saying the pandemic has changed COVID-19 has increased their company’s focus on employee financial well-being to “a moderate extent.” Another 25% said the pandemic has altered the degree to which their organization stresses financial health to a “low extent,” and 22% saying their companies have changed to “a high extent.”
COVID-19-related restrictions might be easing up ever so slightly, but worker health and safety is no less critical. In fact, as employees figure to soon begin returning to work in larger numbers—in some places more than others—health and safety becomes even more paramount.
This was the main theme of the May 7, 2020 meeting of i4cp’s Total Rewards Action – COVID-19 Coronavirus Response call, where total rewards leaders from companies such as Tyson Foods, CoorsTek, Grant Thornton and many more shared how they’re ensuring workers’ well-being and safety, as well as how they’re communicating coronavirus-related information and updates to the workforce, and how they’re gauging sentiment around employees’ needs throughout the pandemic. Some highlights:
Employers are taking a variety of steps to
ensure the health and safety of frontline workers in the midst of the
coronavirus pandemic. In response to a poll question on this topic, close to
half of respondents said their organizations were keeping records of possible
exposures and infections, and more than half indicated that their companies are
frequently communicating safety and social distancing protocols to the
- Companies are frequently communicating COVID-related information as well as safety and social distancing protocols to employees. Some participants on today’s call shared their communication strategies. Connie Haney, vice president of total rewards at CoorsTek, for example, pointed out that the company is sharing reminders of safety and social distancing practices to employees on a weekly basis via the CoorsTek intranet. McKinstry, meanwhile, has developed an app for employees to self-report symptoms, potential exposures, etc., on a daily basis. Others such as Arvest Bank are using daily emails as well as digital signage for onsite employees to communicate safety and social distancing protocols.
- Organizations are collecting data to gauge employee sentiment around a variety of COVID-19-related issues, according to today’s second poll. The most common topic of employee surveys related to the pandemic regards return-to-workplace protocols, for which 46% percent of respondents reported their organizations collect data. Another 15% say their organizations poll employees to get an idea of the overall physical and mental well-being of employees during this obviously trying time, with another 12% polling employees to determine whether they had the necessary tools and resources to remain productive while working remotely.
For instance, Arvest Bank asks employees to indicate whether their productivity while working at home has remained at the same level, increased or decreased, according to Michelle Van Schenck, Arvest’s executive director of total rewards. The financial services company also asks workers if the company has provided the tools they need to thrive remotely, as well as questions geared toward gathering data on the level of supervision and guidance managers are providing throughout the pandemic.
- Employees are relying on a number of strategies to help manage through the chaos. For example, i4cp’s recent survey on collaborative overload finds that the majority of employees (64%) are emphasizing maintaining virtual contact with friends and family as a coping strategy, with 62% saying that taking a drive, run, or bike ride helps them stay centered and avoid overload. Another 60% said the same about maintaining physical exercise during quarantine. Companies are also trying to inject fun into meetings and other workplace interactions. AMD, for example, has incorporated bingo games into some team meetings, done safety dress competitions and played a safety song-themed version of “Name that Tune” during meetings.
A number of companies and senior leaderships have been making sacrifices to help their employees.
We wanted to make note that Institutional Sharehold Services (ISS) has issued policy application guidance for public companies, in light of the pandemic.
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.
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
- 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
- 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.
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:
- 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.
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.
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.
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.
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.
The discussion of the first virtual gathering of total rewards leaders covered the following compensation & benefits issues:
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)
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?
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
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)
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
- 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
- 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
Curated Best Practice Examples Articles
World at Work: Compensation in Crisis
- USA Today: Coronavirus sick leave: Walmart, McDonald's, Olive Garden add COVID-19 paid sick leave policies