AlignTalentModelswithProfitModelsMercerInformationProductsHelptoRewardYourSegmentedTalentBreakOutSession–DrivingTop-lineGrowththroughStrategicPartnershipwithSales–CreatingCompetitiveAdvantageinBenefits–EffectiveRetentionTool:WealthSavingsBenefit–MoreThanTalentAlignTalentModelswithProfitModels3MercerHRstrategicapproach–TalentSegmentation4MercerHowprofithappens?Wheredowemakeprofit?Wheredowemakeprofit?Whatdrivesprofitimprovement?Whatdrivesprofitimprovement?Whatprofitmodelsdoweoperatetoday?Whatprofitmodelsdoweoperatetoday?Whatprofitmodelswillweoperateinthefuture?Whatprofitmodelswillweoperateinthefuture?5MercerMostcompaniesoperateseveralprofitmodelsKeyAssetOtherFormsProfitMultiplierModelBaseProductFollow-onProducts/ServicesAdd-onProduct/ServicesProfitProfit0TimeCustomerSolutionsProfitPriceCost$/UnitPost-LaunchQ2Q4Q6Q8Q10InnovationLedProfitBrandProfitMarketPricePrice/UnitBrandPriceSwitchboardProfitBuyersSellers6MercerTalentsegmentationmeanstodifferentiatetalentmanagementpracticestomeettherequirementsof:SpecificprofitmodelsEmployeeneedsExternaltalentmarkets……tooptimizebusinessperformance7MercerEnergyCoisaverticallyintegratedoilandgascompanywithdifferentprofitmodelsacrossthevaluechainExploration&ProductionEnergyCoRefining&MarketingRetailProjectTypeRevenueCost$/ProjectBlockbusterProfitRevenueCost$/UnitUtilizationCycleProfitRevenueCost$/UnitSizeofTransactionTransactionScaleProfitLocalMarketShare0LocalLeadershipProfit8MercerEnergyCousedasingletalentmodelExploration&ProductionEnergyCoRefining&MarketingRetailTalentmodelOne-size-fits-allacrossthewholevaluechainCareer-focusedLittlerewarddifferentiationforperformanceEliteglobalemploymentbrand9MercerTalentpracticescentredaround“one-size-fits-all”PaywiththemarketPayabovemarketforhotskillsRetailGlobalorganizationCentralizeddecision-makingEmphasisonlearninganddevelopmentNon-differentiatedincentiveawardsCompanyprofitmeasurementCareer-basedrewardsLong-termfocusedBuildtalentEnterprise10MercerEnergyCohadanumberofcriticalquestionsIsthereabusinesscasetoallowforsegmentationofrewardsandtalentstrategies?Whatpracticesshouldbeenterprise-wideversusspecifictothebusinessunits?Whataretherisksofpursuingsegmentationoftalentstrategies?11MercerDifferentiationbetweenglobalorganization&retailLocal,regionalGlobalGeographicperspectiveMulti-sitecomplexityEconomiesofscaleOrganizationalstructureCompetitivePremiumBusinessbrandCustomers/costProducts/investmentsFocusLowmarginHighmarginProfitabilityHighlycompetitiveOligopolisticCompetitivenessShort-termLong-termTimehorizonHumancapitalHardassetsCapitalintensityRetailGlobalOrganizationCharacteristic12MercerEnergyCorequiredasegmentedapproachLittleemphasisonlearninganddevelopmentEmphasisonlearninganddevelopmentEntrepreneurialdecision-makingCentralizeddecision-makingDifferentiatedawardsNon-differentiatedawardsLocalfinancialandcustomersatisfactionmeasuresCompanyprofitandEH&SmeasuresSpotrewardsCareer-basedrewardsBuytalentBuildtalentPaywiththemarketPayabovemarketforhotskillsRetailGlobalorganization13MercerIt’salwaysaquestionaboutone-companyapproachorsegmentationapproachOne-companyapproachSegmentationapproach14MercerThekeyistofindtherightbalancebetweenone-companyandsegment-specificpracticesPortfolio-drivenenterpriseDifferentrequirementsintalentqualityandmixDifferentresponseneededtodifferentbusiness,legal,culturalandmarketrealitiesgloballyUnevenresponsetoemploymentbrandNeedforquickadaptationto“local”realitiesFactorsfavouringsegmentation“Synergy-driven”enterpriseLeveragingthroughscaleNeedforcross-businessmobilitytobroadenexperienceandleadersStrongemploymentbrand(s)NeedtosustaincohesivecultureRelianceonteam-basedworkLowtoleranceforcomplexityFactorsfavouring“one-company”approach15MercerIt’sallabouttotalrewardsstrategyApproachtotalentpracticesSegmentedSegmentedOneOne--companycompanyHighHighdemanddemandforfortalenttalentSegmentedSegmentedSmartSmartinvestmentsinvestmentsAlignmentandSegmentation?16MercerMethodologyofcreatingarightcompensationstrategyTheprocess17MercerBusinessstrategyHumancapitalstrategyCapabilities,behaviors,andactionsWorkforcesegmentationPreferencesandvaluesConnectiontobusinesssuccessBusinessandeconomicfactorsMarketpositionsAffordabilitySustainabilityROITOTALREWARDSTHATWORK™TOTALREWARDSTHATWORK™EMPLOYERPERSPECTIVE:Doourrewardsprogramsfosterknowledge,competenciesandbehaviorsthatarenecessaryforbusinesssuccess?EMPLOYEEPERSPECTIVE:AremyrewardspartofacompellingvaluepropositionthatIunderstandandsupport?.COSTPERSPECTIVE:Arerewardscostsaffordableandsustainable?Dotheycrowdoutotherprofitableinvestments?MethodologyofcreatingarightcompensationstrategyThreecriticalperspectivesforrewards18MercerBrandimpactBusinessdesignCustomerselectionStrategiccontrolScopeOrganisationalperformancesystemValuecapture/ProfitmodelGeographicimpactGlobalvs.LocalfocusEmergingmarketRapidgrowthModerategrowthFlatmarketDecliningmarketValu