Salary Review and Promotion for the Insurance and Takaful Industry – Predicting it for 2012
Reviewing some of my previous writeup on salary increment and promotion, did some serious checks on market salary (+pay package) comparison lately and having gone through an extensive appraisal review recently on staff performance I think I can further add on to what’s to come for the year 2012. And that’s on top of those writeups available over the web currently….
“Do you think a 4% to 7% increment for 2012 is reasonable? Why?”
Most of the organisations involving with Human Resource functions are quick to point out an average increment of 4% to 7% for 2012 payscale (do note this is in respect of Malaysian payscale and is for all major industry), an indication of a much higher increment compared to what’s available back in 2011 and 2010. However these organisations were quick to point out the much lower bonus payout for 2011 and also likelihood for 2012. I am not going to name those organisations though, it would be best if you could google the web for some insight…. It is also good to note that this relatively higher average increment is also results of companies factoring adjustments for cost-of-living expenses.
The Increment Aspects
The recent appraisal that I have had conducted on my subordinates (about 90 ++ of them) was not exactly an easy task. The following did pose issues:
- Matching salary with industry payscale
- The core competency factors
- Key Results Areas for the year 2011
Matching salary with industry I can’t help but noticed that some were overpaid, some below…. It is alot easier if it’s an underpaid scenario but what do you do when the reverse is true, that’s a challenge. If the said staff did perform well it is alot more easier to deal with the situation otherwise alot of thoughts is needed to arrive at a fair position. The key aspect in today’s successful remuneration policy is about remunerating fairly both internally as an organisation and comparative to the industry’s adoption. However, remunerating fairly is not exactly an easy task, first we need to keep abreast of industry’s salary + package adoption and secondly we need to appraise our staff accordingly to their workdone and acheivement made for the benefit of the organisation.
Keeping up with both market salary level and also evaluating staff performances is not at all easy.
Firstly, pay packages are very much a dynamic thing especially in a market where the shortage of certain skill sets drove companies to pinch staff from their competitors and doing so aggressively…. on the other hand other industry has also been poaching on our industry staff where certain skill sets are of relevance to them. The Human Resource (HR) department must necessarily improve their market intelligence in order to build their knowledge base. It is also important that HR build on pay band tie to every level of the contract of employment strategically, eg. a senior executive engagement is pegged to a pay range that is commensurate with his or her duties, and yet matching to those of the market.
If the executive is not ready for management appointment (promotion) then he or she will be given a pay rise according to the salary band until the maximum of the band is reached. Thereafter, the said executive may not have anymore pay rise unless a new employment category is created…. or else, he or she is entitled for a much higher bonus pay-out or some increases to her existing package not link to her pay….
Secondly, appraising the staff workdone and achievements had always been more of some qualitative judgement rather than one that is more predominantly measured…. When using qualitative judgement we cannot avoid our emotion clouding a major part of our judgement…. for most of the time, i.e. if you dislike a certain staff, those dislikes would definitely affect thoughts and the end results are never good….
Separating out those RESULTS ACHIEVED in any appraisement year – those that were part of CORE COMPETENCIES and those that go beyond their core functions.
Alot of our appraisement time were spent trying to assess the staff based on her core competencies as a matter of determining his or her achievement for the year rather than emphasising more on his or her ability to work out results beyond those of her core competencies. So, what results are deemed to tie to core competencies and what’s deemed to be the results deemed to have acheived beyond those core….?
Core competencies required for the job are really what’s brought the said person into her current role. If a staff is appointed a senior executive then he or she must possessed certain abilities (attitude, knowledge and skill sets) to deal with the job requirements in order to attain an average level of achievement. It is important that a staff is promoted to her new job meets those qualifying criteria, i.e., capabilities link to (trainable for….) the new job requirement otherwise he or she would be stumbling for most part of her career in the new position.
“Executives achieving the requirements in respect of their core competencies are usually deemed to be average workers, or maybe in certain circumstances, could be considered as slightly above average.”
Achievement beyond core competencies aims to differentiate….. which means the staff has got the abilities to achieve beyond her core capabilties, thus he or she should be rewarded and HR should then put him or her on the promotional watch list.
Staff who is able to perform those results that clearly relate to his or her core, then he or she is merely fit for the job and is deemed as an average to above average workers…. NOT AN OUTSTANDING ONE in respect of his/her job requirements. If any of the staff falling in this category is being targeted for a promotion then their potential must be realised.
The Promotional Aspects
Reviewing the core activities of some of the middle managers promoted last year, I realised some of them were not up to the mark as required of a manager…. simply because most were capable executives but after their promotion to managerial capacity somehow they still stuck with their executive tasks and mindsets. Therefore, they failed in organising their subordinates for a change that could take his or her team to the next level. I think this is the current norm within the industry…. organisations strive to promote their executives to junior managers when they are not ready for the role nevertheless did it simply in the name to retain staff and also justifying the higher pay increases without having have to disrupt the overall internal payment structure.
“Should you promote the executive to junior manager without the appropriate grooming for the job?”
From general discussion with most industry managers, I am in the opinion that most insurance companies will not be too eager doing this form of promoting exercise for 2012 – it is pointless if the executive is not ready to manager….
If at all the promotion was made, what then should be the most appropriate promotional increment? Look likes our industry is talking about something like 10% to 25% range. If any of you executive getting the 25% for promotional increment, you probably had achieved exceptionally well in your job, i.e. displaying leadership quality and managerial capability.
“Promotional related increment may range between 10% to 25%….”
What are those specific jobs within the insurance industry that are deemed in demand for 2012?
Briefly, the industry has a relatively higher appetite for the following:
- capable market-oriented underwriters especially for those who specialise in Marine, Specialised Liability, Health-Medical and multi-line facultative reinsurance.
- experienced claims personnel especially those that specialise in various non-motor insurance claims – Marine and Liability classes should featured more prominently. Experienced and professional trained adjusters are also in demand….
- experienced personnel in Statistical & Actuarial functions – New Products formulation and Pricing are important in the era of detariffication and enhancement of Risk-based Captial framework….
- IT personnel or personnel who are highly internet savvy…. especially those who are also experienced with insurance operations – building B2B transactional portals and user-friendly applications (App) should feature more prominantly in 2012.
- experienced and agile marketing staff in non-motor business development, and the person should be able to master the distribution channel for strategic development….
- experienced finance and accounting staff with also the necessary ability to understand the important aspects of insurance operations.
- Investment portfolio manager and analyst
The Bonus Expectation
What are you expecting? I can just say, judging from feedback…. gonna be between 1.5 months to some 5 months on the average range.
I supposed 2012 is going to be a great year with higher increment and greater job prospects and so on. However, 2012 is going to be a turbulent year judging on the intensified quantitative easing in US, the EU sovereign debt crisis and the depreciating Asian currencies.
But then, let us all hope nevertheless 2012 be another great year for better bonuses….