Higher bonuses, slimmer salary rises may indicate ‘pay for performance’

The managing director of Willis Towers Watson in Thailand pointed out that its annual compensation study revealed that companies boosted their bonuses to 2.2 months last year from 1.9 months in 2014. 

That came despite the sluggish economy and the finding that companies had reduced their annual salary increases to an average of 5.5 per cent from 6 per cent. Thai culture has been known to hinder the efforts of corporations to implement the differentiated pay system to reward their high-performing staff significantly more than their underperformers. 

The culture of “non-confrontation” has brought about the “A-rotation” practice where bosses or supervisors give the top performance evaluation score to some workers in one year and rotate to the rest in the following years.

“Bosses don’t like to create differences because they |will have to explain and thus have to ‘confront’ their staff. They don’t like to be disliked by their subordinates,” she said.

“But as a result, companies may not be able to keep their top talent,” who will flee for higher salaries, she told The Nation. 

One of the hottest HR trends today is the growing interest to train line managers also to become “people managers” who not only excel in their particular job but also know how to manage and coach their staff, Pichpajee said.

Companies “have increasingly acknowledged the fact that people are leaving their firms because of their direct bosses or their supervisors”, she said.

Internationally, “HR technologies” is a growing trend that firms are increasingly adopting to tackle their various personnel challenges. Thai companies can use these new HR tools to overcome their cultural obstacles.

“Besides saving managers’ time in evaluating each of their staff, they can also pass on the justifications to the technologies,” she said. 

Willis Towers Watson has been increasing its investment in various HR technologies. 

The consulting company last April acquired Saville Consulting, an international psychometric-assessment specialist, to expand its talent-management offering and strengthen its position as a leading global HR software provider.

More recently, Towers Watson merged with Willis, a leading insurance and reinsurance broker and global risk adviser, to create Willis Towers Watson, a global organisation with 39,000 employees in more than 120 countries serving 80 per cent of the world’s 1,000 largest companies. “By combining Towers Watson’s expertise in human-capital management and Willis’ experience in insurance brokerage and risk advisory, Willis Towers Watson can now help clients manage their risks and people with the most cost-efficient end-to-end solutions,” Pichpajee said.

The local HR consulting market appears to be slowing down this year from last year, when the firm booked double-digit growth. “This may come from a lag effect, since HR project implementation takes time,” she said in explaining why the HR market outlook seems to go in contrast to the economic trend for slight improvement this year.

The National Economic and Social Development Board forecasts gross domestic product expanding by 2.8-3.8 per cent this year, up from 2.8 per cent in 2015 and 0.8 per cent in 2014.