What keeps Asia CEOs awake at night (The Business Times, Friday, 17 March 2017)
Tough love is hard to do (The Business Times, Saturday, 18 February 2017)
Collective ambition important for business growth: study (The Business Times, Wednesday, 25 January 2017)
No second chance at a first impression (The Business Times, Saturday, 10 December 2016)
Is your co-worker toxic or just annoying? (The Business Times, Saturday, 17 September 2016)
What next after being passed over for promotion? (The Business Times, Saturday, 20 February 2016)
The REIT way to fair remuneration (SID Directors' Bulletin, December 2015 for Quarter 1, 2016)
With employee expectations evolving and disruption in technology, CEOs are striving to drive business success by harnessing the potential of their people.
by JEREMY ANDRULIS, CEO of Aon Hewitt's South-east Asia business
This article first appeared in The Business Times on Friday, 17 March 2017.
At a time when leaders are challenged to drive better business performance through their people, CEOs continue to be plagued by a critical skills shortage and heightened cost pressures. Externally, volatility continues to be the "new normal" for most organisations - in fact, a recent study shows that 70 per cent of Fortune 1000 companies have disappeared in the last 70 years. Employee expectations are also evolving, while disruption and advancements in technology are changing the configuration of work faster than ever.
How can today's CEOs in Asia drive business success by harnessing the potential of their people?
In the Aon Best Employers 2016 survey, we spoke to CEOs of almost 600 organisations across Asia about their strategic goals and the business challenges that impact their organisations' ability to succeed. We discovered what the CEOs of these Best Employers are doing differently from their competitors to achieve 20 per cent higher engagement than the market average, and drive 10 per cent greater revenue and 26 per cent higher profit than market average.
Three key themes emerged:
Create a competitive advantage through people
CEOs in Asia named three challenges that impact their organisations' ability to succeed - market factors (52 per cent), people issues (47 per cent), and product/service innovation (35 per cent).
Market factors such as global competitive trends from non-traditional sources and evolving customer expectations mean organisations have to rapidly innovate their products and services in order to meet ever-changing needs and demands - and they can only achieve this with an agile workforce.
These challenges of speed, innovation, and agility are also the critical differentiators for creating a sustainable competitive advantage. At the centre of each differentiator are people who think and operate differently. Aon Best Employer CEOs now see making the right investments and decisions about people as the enabler of their competitive edge. They work hard to build organisations that thrive on product and service innovation, while creating work environments that are more likely to attract and retain the best talent. Their organisations also fill 28 per cent more openings internally than the market average, which helps them achieve better business performance through their people. However, with CEOs citing critical skills shortage (63 per cent) and poor availability of talent in the external market (60 per cent) as their top people risks, the road to building agile organisations is an arduous one - even for Best Employers.
Deliver a differentiated work experience
As salaries continue to rise year on year, critical skills shortage and low availability of external talent put power in the hands of employees and job seekers. At the same time, an inadequate leadership pipeline means organisations are forced to spend more to attract senior leaders to their team. However, money is no longer the easy answer to retaining great talent. Furthermore, increasing salaries and rewards is not sustainable. It creates a huge risk to the bottom line and an adverse impact on profitability in the medium- to long-term.
This is why Aon Best Employers across Asia are increasingly focusing on building a strong employer brand and leveraging digital platforms to create a differentiated work experience.
In 2016, CEOs said that the most important employer value proposition was teamwork and empowerment (59 per cent) - up from the third spot just last year - where employees prefer to be enabled, rather than instructed, in performing their roles.
This is followed closely by product and service excellence (52 per cent), where employees across generations express a desire to be proud of what they're creating and how they're contributing to the organisation and changing the world - not just from a professional perspective but a personal one.
Learning and career (51 per cent) rounds up the top three employer brand themes, where employees are seeking organisations that offer them opportunities to learn new skills and grow their careers.
Yet, while 65 percent of organisations say that they have a clearly articulated employer brand, only 11 per cent of their CEOs and HR leaders are aligned on that definition. While this suggests more work is required to align leaders on why their organisation provides a differentiated work experience, the good news is that CEOs are applying the same approach to their employer brand as they do to their products and services. They focus on clearly and consistently creating a differentiated employee experience in order to attract the best talent and enable them to perform.
Correspondingly, CEOs are looking to invest in more digital platforms that align with the experiences that employees have outside of work so as to provide real time, end-to-end, and anywhere access to information and services. Digital platforms also enable organisations to collect data more frequently, and in a more targeted way, in order to gather better insights and make better decisions about their people and for their people.
Build an agile organisation through analytics
Data empowers organisations to make informed decisions on how to best achieve their business and people goals. In addition, always listening to employees through constant conversations and frequent pulse surveys - not just organisation-wide evaluations once a year - provides up-to-date and relevant data for leaders to make the right decisions on where to direct people investments.
CEOs expect the HR function to use analytics and critical thinking to create compelling business reasons to make effective and predictive decisions on people and organisation investments. This applies to organisation design and workforce planning, as well as development of an effective leadership pipeline, where CEOs want HR to have the ability to make informed decisions on answers to questions such as:
- Who are the organisation's future leaders?
- How can the organisation improve the performance of current leaders?
- How can the organisation evolve to face up to dynamic market forces and meet customer expectations?
At the same time, this is where CEOs believe HR leaders have room for the most improvement. Thirty-eight per cent of CEOs believe a top improvement area is succession planning and leadership development - not just for leadership at the top levels, but at all managerial levels. Still, more and more Best Employer organisations are taking multiple approaches to talent and leadership assessment in order to better predict future success. CEOs are also demanding return on investment on leadership programmes.
The bottom line is: as HR leaders get a seat at the table as key design-makers in business, CEOs expect them to have the agility to address people issues at the pace of evolving business demands. Top HR leaders in the world believe that leadership driven by collective ambition - where leaders are united under a singular vision, purpose, and aspiration - is key to any organisation's growth trajectory.
By uniting leadership around a common goal, supported by intentional alignment from a "people" standpoint and customer centricity that ensures relevance, it helps CEOs to best leverage their talent and drive growth from the top down.
Plus, enjoy the added bonus of a better night's sleep.
Bitter medicine is hard to swallow, but sometimes, that's what an employee needs to get better.
by VIVIEN SHIAO
This article first appeared in The Business Times on Saturday, 18 February 2017.
These days, it's become extremely unsexy - almost taboo - for management to talk about wielding sticks, as opposed to dangling carrots. So we focus on the rosy: what perks employers can provide, how bosses can motivate and reward staff, and the list goes on.
No one can deny the need for positive reinforcement. But this cannot replace constructive criticism and yes, even discipline, when the situation calls for it.
Many managers have no qualms patting employees on the back for a job well done, but falter when the time comes to deliver negative feedback. Some fear being liked less, some fear tears. But failing to address it is a failure of management. It sends a message that underperformance is okay, not just to the person in question, but also to the rest of the team who are working hard to pick up the slack.
It's a fine line to tread, and veering off to extreme ends of the spectrum is all too easy. We have seen bosses who get so worked up that it ends up getting personal, and there are those who hedge it with so many compliments that its impact is lost. Or worse, some resort to a passive-aggressive e-mail.
The times, they are a-changin'
In the past, no one would bat an eyelid if a boss shouted or banged his fist on the table - it was pretty much the modus operandi in the small and medium sized enterprises back then. It was a top-down style of management where bosses had no qualms giving staff a piece of their mind.
Vidisha Mehta, talent strategy practice leader - Asia, Mercer, observes: "The traditional style of management tended to be quite paternalistic, with managers treating their employees like children - this was reflected in how they provided feedback."
Times may have changed, but by no means does this indicate that such behaviour is a relic of the past.
Noora Alsagoff, head-HR, Asia Pacific, Middle East and Africa, Aon Hewitt, points out: "Unfortunately, angry bosses are ubiquitous in today's organisations. There are hundreds of stories where employees were told off by their bosses, often publicly."
In today's economy where collaboration, ideas and innovation are valued, the way feedback is given needs to evolve. Employees increasingly want to be treated like equal partners in their development.
Shouting does quite the opposite, creating an environment of fear and distrust, where staff stop being inclined to share their views and opinions openly. Says Ms Alsagoff: "When managers begin by showing anger, the conversation becomes less about reason and more about denial and defensiveness . . . Organisations with a strong, supportive culture never condone this behaviour."
But before managers start their lament on the strawberry generation, Ms Mehta adds that this does not imply a "softening" of attitudes among staff of today. "It means that employees want to be treated with the respect that you would accord an equal. The emphasis is on being firm, yet respectful to the individual, rather than being condescending."
Rules of engagement
Aside from a public dress-down, one of the big no-nos when it comes to giving negative feedback is sending it via e-mail. That may seem like the easy way out, but there are so many problems with this. One sent to the whole team regarding the mistakes of a particular person is simply naming and shaming. On the other hand, not specifying who leaves everyone flummoxed and a witch hunt is likely to ensue.
Even if sent with the best intentions, e-mail can still be easily misconstrued and circulated. Just one word: Don't.
As far as possible, it should be done in a one-on-one setting to get down to the root problem. The old adage "praise in public, criticise in private" stands. The aim is not to rant or to blame, but to understand how things can be improved upon in the future.
In an ideal world, feedback by managers comes regularly and there's ongoing communication between the two. But we all know that in reality, this often doesn't happen until either it's time for performance appraisal, or when an employee has screwed up big time - in both instances, it's too little too late.
"Feedback is most effective when it is shared as soon after the incident as possible, while it is still fresh in the minds of both the employee and the manager," advises Ms Mehta, noting that an emotional reaction typically happens when the employee is surprised by the feedback.
Other common reactions managers can expect are denial, anger or those who go quiet due to shock. In such a situation, it is the leader's role to listen well, stay calm and stabilise others, according to Aon Hewitt's "The Engaging Leader" study.
But the key to avoid defensive reactions in the first place is for supervisors to prepare examples to support their stance. This is not about stockpiling an arsenal to attack the person, but rather to share evidence so that staff know the context.
More importantly, asking for specific examples is the most common reaction by staff, so supervisors must be able to provide that, says Ms Alsagoff. Otherwise, criticism can easily be passed off as judgment, and this lack of clarity can lead to frustration or misunderstanding of the manager's intention.
It's not enough to give employees feedback on areas they fared poorly in. Managers need to give suggestions on how they can do better in similar situations in the future. This provides a clear course of action and ensures that the employee is not left to interpret this for themselves. Needless to say, whatever plan mutually agreed upon during the discussion must be followed up with regular progress reports.
On a final note, in a job market as poor as today's, the worst thing a manager can do is to make a veiled threat about job security as a means to cause change, no matter how riled up.
Ms Mehta adds: "It's difficult to change behaviour - you only have to look at the hundreds of broken New Year resolutions to know that. Managers need to convey to employees that they are willing to support them in the journey of behaviour change, and that they are committed to the employee's success."
Ultimately, negative feedback is a bitter pill to swallow, but if administered right, brings about recovery and growth. A good dose of tough love may be just what your employee needs to get back on the right track.
by NISHA RAMCHANDANI
This article first appeared in The Business Times on Wednesday, 25 January 2017.
Collective ambition is key to driving business growth, according to a study, which found that high-performing companies were able to unite leadership to drive collective performance through unique annual and long-term incentive plans.
The People Fuel Growth study by talent firm Aon Hewitt surveyed chief human research officers from 25 companies to establish what successful companies do to outpace their rivals.
All the firms interviewed were headquartered in the United States but most had global operations; the firms represented 1.1 million employees.
Na Boon Chong, senior client partner at Aon Hewitt Singapore, said: "By uniting leadership around a common goal, supported by intentional alignment from a 'people' standpoint and customer centricity that ensures relevance, it helps organisations to best leverage their talent and drive growth from the top down, be it at a firm or at a national level."
Collective ambition is defined as uniting leaders under a singular vision, purpose, and aspiration.
Leaders at high-performing companies are typically equipped to empower their teams to contribute to the company's growth, while compensation packages incorporated a mix of long-term and short-term rewards, Aon Hewitt highlighted in the report.
Higher-performing companies typically use one or two metrics – such as profit – in the annual incentive plan to enable growth.
Approximately 40 per cent of high-performing companies of those studied used only one metric.
In contrast, average-performing companies might add other performance metrics in addition to profit, creating more focus areas which could end up contradicting one another.
High-performing companies also set a higher ceiling of performance than average performers, and in line with that, provided for a higher maximum award payout. This could be pegged to a percentage of the target. Similarly, high-performing organisations provided a much lower payout for achieving minimum performance.
Another avenue is long-term incentive plans, such as stock options. "This vehicle creates a win-win for shareholders and participants by requiring increases in share price for the award to have value and providing leveraged award opportunities if that occurs," Aon Hewitt noted.
Of the high-performing companies surveyed that had performance-based long-term incentive programmes, only 10 per cent included relative or absolute total shareholder return as a performance metric, while 33 per cent of average-performing companies used relative or absolute total shareholder return as a performance metric. This could be due to high-performance companies preferring "more controllable" metrics, such as profitability.
The report also highlighted the need for leaders to review the company's mission and growth plan at least once a year. Goals are typically linked to concrete measures so that staff understand how they can add value to – and share in – the company's success.
by VIVIEN SHIAO SHUFEN
This article first appeared in The Business Times on Saturday, 10 December 2016.
Several years ago when I was fresh out of university and looking for a job, I managed to land an interview for an editorial position that I was extremely keen on.
A combination of nerves, social awkwardness, and insufficient preparation resulted in one of the most painful interactions I ever had in my life. The interviewer - who would have been my editor - was also struggling mightily to find common ground with me, in a conversation that was steadily going downhill. And then she asked what kind of books I liked to read. Without thinking, I responded: "Chick lit."
To this day I don't know what possessed me to say that. It's a well-regarded trade publication too and I just kissed my reputation goodbye. And it wasn't even true that I liked that genre! Yes, the last book I had read at that point was one but the answer just came out of my mouth before I could stop myself.
I think the editor winced and the interview was hastily concluded. I'm a little embarrassed to admit this, but being the earnest, overly serious 22-year-old that I was back then, I went home and bawled my eyes out. That was probably my first experience with the consequences of making a poor first impression.
My foot-in-mouth syndrome might have been amusing during my school days, but in the working world, you know what they say: there is no second chance to make a first impression.
I spoke to Martin Gargiulo, professor of organisational behaviour at Insead, who said that first impressions can be very lasting, even if we think of ourselves as being objective. In fact, it is much easier and faster for us to make up our mind than to change it.
"This is the basis of speed dating. We tend to form an opinion about someone pretty fast. It may not be strong, but it is fast."
He says that people form an impression of someone new based on cues such as how they talk, dress or behave. Once that happens, we become more attentive to cues that confirm our views, while filtering out those which don't corroborate. This, he says, is known as "confirmatory bias" in social psychology.
Mollie Kohn, chief commercial officer, Asia Pacific, Middle East and Africa, of Aon Hewitt, concurs, describing first impressions as having a "halo or horn effect". This refers to a cognitive bias that allows a good trait (halo) or bad trait (horn) to overshadow the rest.
"Our brain receives so much information and data all the time, so it tries to be as efficient as possible. So we tend to make snap judgements. Once you make a bad impression, it's really hard to change it."
For people such as me who suffer from foot-in-mouth syndrome, it's a double whammy. But slinking away and hoping for the best when you made a poor impression in the office is not an alternative.
Eugene Chang, senior principal of Korn Ferry Hay Group, said that first impressions affect your personal brand. He points out that in this day and age, workers no longer operate in silos, and it will impact your promotion chances if people don't want to work with you because of a negative impression.
"Certain work cultures can be quite toxic, and if you walk in as a new person and make a bad impression, rumours can start and people may label you before you even get a chance to prove yourself," he added.
But if it's any relief, all three experts I spoke to believe that perceptions can change. A key theme is the need to overcompensate.
According to Prof Gargiulo, it is a process where the offending person needs to produce much more positive cues over time to counteract the negative impression formed. It entails self-awareness to know how one comes across to others, and then deliberately behaving contrary to what the expectations are.
If repeated long enough, others should start to be more open to seeing the positive cues and changing their views.
Mr Chang on the other hand suggests taking a more direct approach to changing a poor first impression- by apologising to the other party first if your intentions didn't go across correctly. Call it out and don't let it fester, he advises. After that, one needs to follow up by making the extra effort to overcompensate for a much better experience with the other person.
Sometimes, the best approach to changing someone's mind is not going through the person directly. Mr Chang said: "It's possible that there's no recourse even though you have done everything. You can then work on proving yourself to people whose judgment the person values, sort of like a testimonial."
This hopefully will make the other party rethink the situation enough to a point where they can start seeing cues that they may have neglected before.
In other words, it takes a herculean effort to repair the damage done by a poor first impression. But let me end this piece on a more positive note.
My botched job interview had an unexpected twist at the end. You see, I didn't just throw my hands in the air and moved on to the next job. That very day, I decided I had nothing left to lose so I penned a letter thanking the editor for her time and also apologising for some of the thoughtless things I said. I did not make excuses for my poor interview, but tried to articulate my views in answer to some of the questions she asked.
Miraculously, I got called back for a second interview! I prepared for that like there's no more tomorrow. It went well and I got the gig in the end.
Years later, I found out from my interviewer that it was my email to her that made her decide to give me a second try. By that time, we had already built a great working relationship and she was in stitches recalling the whole incident. She confirmed that the whole interview was really so disastrous and she had made up her mind not to call me back. But lucky for me, my post-interview note was sincere enough to cause her to relent a little and the rest, well, is history.
While there was a happy ending in my case, I have learnt over the years that do-overs don't always come by. To correct a first impression, one requires at least a second chance to be able to do so. But not all situations allow us to have the luxury of time to change people's minds.
Negative first impressions can be reversed, but why put yourself through all that extra work? It is easier to build on a good foundation, rather than try to fix something that is broken. Be self-aware, prepare, be in the moment and pay attention; this way, you are far less likely to have the problem in the first place.
Knowing the difference can save your career and sanity. Find out what kinds of behaviour warrant action.
by VIVIEN SHIAO SHUFEN
This article first appeared in The Business Times on Saturday, 17 September 2016.
It might be the gossipmonger who sows discord. Or it might be the drama queen who complains about every little thing. Or worse, it might be the passive-aggressive colleague who constantly steals credit. But while it is unrealistic for everyone to like one another, there's a difference between someone you can't get along with and a toxic colleague.
The former has to do with individual preference, while the latter poisons the office with their negativity and malcontent, affecting the performance and engagement levels of those around them.
A 2015 study by Harvard Business School (HBS) on toxic workers suggests that such people compel other employees to leave an organisation faster and more frequently. This not only generates high turnover and training costs, but also brings down the productivity of the entire team.
So while it may be very magnanimous of you to just grit your teeth and bear with it, doing so comes at a high cost to both your career and sanity. It is imperative that you nip the problem in the bud before you become toxic too.
If a co-worker grates on your nerves, but no one else in your team has this problem and you can't really pinpoint why, perhaps it's wise to check whether the problem lies with you. It might be your inner bias talking.
Be honest and ask yourself these questions, says Wendy Chua-Sullivan, leadership coach at Wand Inspiration. "What could you be feeling insecure or jealous about? What are your judgements about this person? What does this person remind you of that triggers your irritation?"
Recognising where your feelings are coming from helps puts things into perspective.
As teams get more diverse, it is inevitable that we encounter colleagues we don't like, and it can simply boil down to a personality mismatch or individual preference. Most people don't realise that it is perfectly fine for co-workers to not like one another. In fact, liking your colleagues is more of a bonus rather than a requisite.
If all parties are professional when it comes to projects and work gets done, it doesn't really matter that this person puts up a front when the boss is around or that your co-worker can't stop over-sharing about his or her life.
The golden caveat here is that it must not impact your ability to perform, or affect how your boss or teammates view you. "Colleagues who are annoying usually are unaware and their intention is not to hurt. They still contribute to the team and results. An annoying co-worker is like an itch - irritating but eventually harmless," says Ms Chua-Sullivan. Vikas Verma, principal of Aon Hewitt, Talent, Rewards & Performance Practice, says that sometimes it may just be the colleague's communication style. "In this case patiently working with the colleague to make him or her aware of this and perhaps help the person with a development plan would be a great start."
But when your co-worker is causing you hurt and misery, he or she has moved into toxic territory. Says Ms Chua-Sullivan: "One who is toxic intends to bring others down. Like a virus in the body, the toxic colleague's intention is to destroy good cells."
Some examples of toxic behaviour include creating conflict, sabotaging others to make themselves look good and spreading negativity. While it may be obvious to everyone else, toxic workers are often hard to spot by managers because these employees still hit their key performance indicators (KPIs) and may hide such traits from superiors. Or worse, they may be buddies with the boss.
However, the worst thing you can do is to keep quiet, which appears to be the norm in Singapore's rather non-confrontational culture. Eve Ash, psychologist and CEO of Seven Dimensions, suggests that co-workers try to talk to the toxic colleague personally. "Give specific feedback, explain the issue and why it is a problem for you, ask them for their opinion, and work out a new way forward together."
But if the toxic co-worker is not receptive, approach your boss with a positive mindset. You should give your boss a fair assessment of the situation with specific solutions you would recommend, instead of focusing on personal grievances.
However, if your boss is not willing to take action and no change is seen, it may be advisable to speak to someone else more senior for advice as a last resort, but make sure your boss is in the know.
Says Mr Verma: "If you do speak to someone else, it's advisable to be objective and talk about your issues rather than the boss or the co-worker. Keep it to the fact that certain behaviour of your colleague is hindering you from giving your best to the organisation and team objectives."
Toxic work culture
If you focus on how to resolve the issues at hand, there is no reason why you will be looked upon as a troublemaker, unless your entire organisation has a toxic work culture that condones such behaviour. In that case, it is quite clear that seeking greener pastures might be the best option. But until that becomes the only alternative, be the bigger person and rise above it. Find a good mentor to develop your skills and study those who have dealt with difficult people and learn from their interactions.
Says Ms Ash: "Always act professionally, strive to be a champion competitor, and allow the competitive, undermining, passive-aggressive teammate or boss's buddy to make their own mistakes. Don't get sucked into a useless office war."
by VIVIEN SHIAO SHUFEN
This article first appeared in The Business Times on Saturday, 20 February 2016.
The person who doesn't feel anything after being passed over for a promotion either doesn't care, or is in denial. It's only human to be upset and emotional. But for those gunning for a promotion that went to someone else, the worst thing they can do is to act instinctively.
Storming to your boss demanding why so-and-so got promoted and you didn't does not reflect well on you, and it puts your manager on the defensive.
On the other hand, sobbing into your pint of ice cream and keeping quiet will not help your career progression either.
First things first: stop. And breathe.
"If you're passed over for a promotion, it's normal to experience a gamut of emotions but let yourself calm down before you take any action," advises Mollie Kohn, senior partner at Aon Hewitt. "Don't make assumptions of the reasons you didn't get the job."
It stings, but try not to behave abnormally in the office. That just makes things awkward and it looks unprofessional.
Next, congratulate your colleague, no matter how you feel inside. He or she is still a teammate (or new boss), and you will have to continue working with that person.
Once all the niceties are out of the way, the introspection can begin. Finding space and time for reflection is extremely valuable, says Glenn Carter, global head of talent development at Millward Brown.
He says that from the process, employees can learn more about themselves and the company: What qualities or attributes did the successful person have that I didn't? What new experiences would increase my value? Was there already a succession plan in place?
Talking to the boss
After which, speaking to your manager is a must.
Don't wait for your manager to initiate a conversation - be proactive and arrange a meeting after a day or two. Getting feedback on where your expectations were not aligned and what you can do better for the future is crucial if you want to move ahead.
"I would encourage people to have an honest conversation with their manager. Discuss each other's insights . . . the individual may be a high-potential person that was not ready to step into a more complex or senior role," says Mr Carter.
He adds that such a conversation builds trust, creates empowerment and maintains motivation.
Ms Kohn from Aon Hewitt adds that one important point to note throughout your conversation is not to speak negatively about others - especially the person who got the job instead of you. "If you consider that promoted colleague's performance to be inferior to yours, tread lightly and be gracious," she says.
She adds that it is very rare - almost impossible - for a co-worker to know about all aspects of another's job.
So, one's perception of another as a low performer may not be representation of the employee as a whole.
No perks of being a wallflower
Sitting quietly and letting it slide can be one of the worst decisions one can make - promotions hardly ever fall from the sky.
No matter how good a worker you are, being proactive about your career progression can make a world of difference in the competitive workplace. This means initiating regular conversations with your manager about your career, and not just once a year.
"Beyond intelligence and aptitude, gritty people, by virtue of their interest, focus and drive typically achieve higher levels of success," says Mr Carter. "The people who get on in this world are the people who get up and look for the circumstances they need . . . Seeking a promotion demonstrates a person's ambition, loyalty and commitment to the organisation."
Workers should actively seek opportunities and put themselves up for them instead of waiting for management to notice. According to Ms Kohn, some other exceptional traits that these successful candidates have are that they are easy to work with, as well as take and give feedback constructively.
In Aon Hewitt's The Engaging Leader study, other traits include: proactively owning solutions where others cannot or do not; energising people with contagious positivity; being good listeners, and being able to stay calm and unify others.
Time to leave?
It may cross one's mind to leave the company, especially after getting passed over for a promotion multiple times.
However, failing to get a promotion doesn't mean there're no opportunities in the organisation at all. Career opportunities could take many forms, such as lateral movement within the same function, and special projects or cross-department assignments. Before you make your decision, it is best to ask your manager what opportunities can open up to you.
"Quitting is the only answer if your manager suggests that an opportunity will take longer than you are willing to wait, or there's no opportunity at all," says Ms Kohn.
Ultimately, it's about whether an employee still finds meaning in his or her work, adds Mr Carter. According to him, as human beings, we all seek roles and opportunities that we believe are meaningful, in which we are able to learn and grow.
With so much time spent at the workplace, our happiness is impacted by our employment choices.
"This dimension would determine when it is time to leave," he says.
Singapore REITs are now facing a changing economic and regulatory landscape. With MAS enhancements to the REIT management guidelines, REITs will need to make adjustments on remuneration and other policies.
By JACOB TAN
Consultant, Executive Compensation and Performance, Aon Hewitt
This article first appeared in the Singapore Institute of Directors (SID) Directors' Bulletin, December 2015 for Quarter 1, 2016.
The Singapore REIT industry has witnessed significant growth since the first S-REIT was launched on the SGX in 2002. REITs have, until recently, outperformed equities and other investment assets in overall yield for investors.
On the economic front, the REIT industry is now facing challenges. Expectations of higher interest rates have weighed on REIT prices in the past months, with S-REIT indices seeing significant downward trends this year.
On the regulatory front, the proposed enhancements by Monetary Authority of Singapore (MAS) will require adjustments in the corporate governance of REIT, particularly in the area of remuneration.
Following industry feedback on its October 2014 consultation paper on the governance of REITS, MAS issued a response in July 2015 on the measures it intends to implement in 2016. (ED: see “The REIT way forward to good corporate governance", SID Bulletin Q3, 2015).
A significant part of the enhancements was targeted at remuneration for REIT managers, which strive to accord REIT unitholders increased protection and accountability, and better align the interests of REIT Managers with that of their unitholders.
The changes to the remuneration policy guidelines are summarised in the diagram below:
How easily will REITS comply with these new requirements?
To answer the question, Aon Hewitt studied the FY2014 annual reports of 10 major Singapore-listed REITs to evaluate their current compliance levels to the new corporate governance guidelines.
The study found that a majority of these REITs were not fully complying with the new standards for disclosures of remuneration policies and key executive compensation.
A key shortfall was in the disclosure of remuneration policies for key executives. Only 20 per cent of the firms detailed the policies used to determine executive remuneration and any pay-for-performance mechanisms.
The large majority of the firms studied also did not have the appropriate disclosures of key executive remuneration amounts.
However, one REIT, Keppel REIT stood out for its compliance (see example at the end of this article).
For the majority of REIT managers, the findings indicate that they would need to undertake a comprehensive review of their remuneration policies against the enhancements and ensure that their FY2015 annual reports start providing the additional remuneration policy information specified.
Aligning Remuneration with Unitholder Interests
The one message that came through clearly in the MAS paper and enhancements is the critical role the board of the REIT manager plays in acting in the best interests of unitholders. This includes ensuring that the REIT’s remuneration policies be structured to ensure this alignment.
There are two key areas where REIT managers can look into to achieve this.
Firstly, the choice of KPIs used to evaluate executives is critical in achieving an effective pay-for-performance policy. KPIs should be based on REIT performance, such as Total Unitholder Return, Distribution Per Unit, or Net Asset Value.
Measures of the REIT manager’s performance (such as revenue of the REIT manager) should be expressly excluded. Such KPIs would place the REIT manager’s interest in direct conflict with that of its unitholders, and may drive undesirable behaviour. For example, a focus on the REIT manager’s income could incentivise the REIT manager’s executives to extract more fee income from the REIT at the expense of the unitholders.
Secondly, a REIT Manager can explore introducing a long-term incentive (LTI) scheme tied to long-term unitholders’ return and settle such LTI payments in the units of the REIT. This will put a portion of the
REIT manager’s executive remuneration at risk and align its interests to that of unitholders.
These enhancements to the regulatory framework for REITs seek to achieve better alignment between REIT managers and their unitholders. Therefore, REIT managers should not look upon the enhanced guidelines as an additional regulatory or administrative burden. Instead, it is an opportunity to re-examine remuneration
policies and pay-for-performance alignment to achieve a win-win situation for all parties.
K-REIT: A best practice example
Within the group of companies studied by Aon, K-REIT was the only one that fully complied with the MAS enhancements on remuneration disclosures in its FY2014 annual reporting. Some of its best practices in the area of remuneration are:
- Total remuneration package for key executives is broken down into three components: base pay, annual performance incentive, and long-term incentive.
- Compensation structure is directly linked to corporate and individual performance, and the creation of unitholder value.
- A balanced scorecard comprising both financial and non-financial KPIs chosen to align executive and unitholder interests is used to evaluate performance.
- A significant portion of executive remuneration is placed at risk, subject to the achievement of predetermined KPIs.
Remuneration of Individual Directors
- The remuneration for directors is listed on a named basis, broken down by fixed and variable (performance-based) components, as well as any benefits-in-kind received.
Remuneration of CEO and Top 5 Executives
- The CEO and top five executives’ remuneration on a named basis are disclosed in bands of S$250,000, broken down by fixed and performance-based components, as well as any benefits-in-kind received.
- There is disclosure of contingent awards of REIT units as part of the remuneration package.