Mastering Year-End Compensation for a Hybrid Workforce

The year-end brings up new expectations and goals for the future. At the same time, it can also lead people to think about things they missed doing this year. 

Hence, this is a critical period to keep your people aligned with business objectives and also ensure you stay aligned with their expectations. For a team that is partly remote and partly in-office, this can be a challenging task. 

But following a structured approach can make the process smoother for your people and you:

1. Conduct a pay equity audit:

Ideally, you should conduct a pay equity audit earlier in the year. But if you haven’t done one so far, it still isn’t too late. Remember, remote and in-office workers might have different perceptions of fairness, so it is important to consider both perspectives.

Identify any gaps in compensation between remote and on-site employees, especially if cost-of-living or job visibility issues are factors. Use the outcomes of the audit to plan ahead and address the gaps you find..

2. Re-evaluate bonus and incentive frameworks:

Hybrid workforces often include a variety of work arrangements, making it crucial to plan how bonuses and incentives will be allocated.

Revisit your variable pay structures to make them relevant for all employees and use performance metrics that apply equally across the hybrid team. Focus on criteria that are measurable, such as goal completion, productivity, and collaboration, rather than subjective factors like visibility in the office or hours on the clock.

3. Conduct performance reviews:

Finalize performance reviews for all employees, keeping in mind that the evaluations reflect the contributions of both remote and in-office workers fairly. Consider how hybrid working conditions have impacted productivity, and ensure that evaluations are based on objective criteria rather than physical presence.

Ensure all managers are trained on how to conduct performance reviews for hybrid workers, with a focus on consistency. Leverage data from performance management systems to track goals and developmental actions across the board.

4. Prepare pay increases and adjustments:

Once performance reviews are completed, prepare any compensation adjustments, such as salary increases, promotions, or market adjustments based on the outcomes of performance reviews, external market benchmarks, and internal equity. This is also the time to solidify any location-based adjustments for remote employees.

5. Communicating compensation changes:

Communicate bonuses and incentives for the year in ways that build morale and improve employee satisfaction. Make sure that employees understand the criteria, whether based on individual performance (or competence), team achievements, or company-wide results.

Use a mix of communication tools—such as virtual meetings, company-wide emails, and digital platforms (like Slack or Microsoft Teams)—to keep employees informed about year-end compensation activities.

6. Provide feedback opportunities:

Year-end compensation activities shouldn’t be a one-way conversation. Hybrid employees, especially those working remotely, may have concerns about how decisions are made.

Collect feedback from employees about the compensation process. Use anonymous surveys or one-on-one check-ins to gather insights about employee satisfaction with their compensation packages.

Conclusion

Handling year-end compensation activities for a hybrid workforce requires meticulous planning, transparency, and fairness. By focusing on equity, leveraging performance metrics that apply to both remote and in-office employees, and ensuring clear and inclusive communication, you can navigate the year-end period smoothly.

Making employees feel valued, heard, and fairly compensated, regardless of where they work from is the best way to continue progressing into the next year.

To build better for the year-end and start strong next year, reach out to us at [email protected].

About the Author

Sumit Singla

Founder of eleventHR Consulting.

Sumit has been working in HR & HR consulting roles for 16+ years across sectors and verticals and specializes in organization design, wellbeing, storytelling & design thinking, and performance management. In his career with consulting firms such as Aon, Deloitte, and Accenture, he has successfully led programs aimed at total HR transformation for clients. Recently, as Associate Director for India Consulting at Deloitte, he worked with clients on cultural transformation and HR process and policy design. He also organized and spoke at conferences and events about a variety of topics relevant to HR today. Now self-employed, he works with clients across the globe on a variety of HR solution areas.

Howard Nizewitz 

Howard’s extensive expertise in compensation management comes with a 25-year track record of implementing strategic and successful compensation programs in the financial services and technology industries with a global and regional focus. His tenure includes positions at Barclays, Citigroup, and JPMorgan. Other areas of expertise include HR consulting, Deferred compensation, incentive plan design, and talent management. If you want to learn more, please contact Howard at [email protected] or schedule a free consultation on the compteam.net website.