Category All, Best Practices How SAP Wins with the Best Recognition and Rewards Practices? Interview with Chetna Singh, Part 3: SAP’s Champions Journey to Fair Pay We’ve sat down with SAP’s Global Head of Total Rewards, Chetna Singh, to talk about how SAP’s Total Rewards and Recognition practices make SAP one of the best places to work globally April 11, 2023 By Ravijojla Novakovic This is the 3rd part of the interview series with Chetna Singh. The first one can be found on this link: How SAP Wins with the Best Recognition and Rewards Practices? Part 1: Holistic approach to Total Rewards. The second one on this link: How SAP Wins with the Best Recognition and Rewards Practices? Interview with Chetna Singh, Part 2: Rewarding People in Flexible and Hybrid Work Environment. Introduction Chetna Singh has been with SAP for 11 years; she rose from being a Total Rewards Director for South East Asia, to filling the role of Vice President of Total Rewards Partnering for Asia, Pacific, and Japan. She has been the SVP Global Head of Total Rewards for the past two years. As the creator of the Total Rewards Reimagine Strategy, Chetna Singh takes on the mission of transforming SAP’s outlook on all the dimensions of Total Rewards. In the second part of the How SAP Wins with the Best Recognition and Rewards Practices? interview series, Chetna Singh talked about rewarding employees in flexible and hybrid work environment, SAP’s Pledge to Flex and challenges scaling flexible work on a macro organizational level. SAP’s Champions Journey to Fair Pay A term we hear from you often is radical transparency. How does that impact SAP as an employer and its position in the market? For me, radical transparency pertains both to salary and benefits transparency. It’s the need of the hour, and employers have to start thinking about it. Salary transparency is all about the organization providing employees with access to their salary bands so that employees are fully aware of the range of the minimum to the maximum of their salary. This is one of SAP’s most significant achievements, providing transparency to our employees, which is necessary for today’s age. Ten years ago, an organization could get away without salary transparency. Now, the whole world is disrupted; every piece of information can be found. And if you don’t make this info available, your employees will do their research and create a narrative that may not be in sync with your organization’s philosophy. As an employer, you have to own your narrative and communicate clearly about the salary bands for their next roles. This creates trust between employers and employees. We are very proud to say that 99.8% of our employees have salary transparency. And it is time to focus on the next level, which is the benefits transparency. We spend so much on benefits, a passive expense that employees do not see because we don’t discuss its tangible financial value. Employees are not aware of how much their employers spend behind the scenes. However, looking at both the compensation and benefits is vital to ascertain the total employee value proposition. At SAP, we are going ahead with a pilot program in some countries, in which we will show the financial value of the top benefits to create this awareness and transparency. And the best part is that there’s technology to help us address transparency challenges. What is the process behind aligning the culture and aligning the rewards in a multicultural, international environment? Are you confronted with questions on what’s fair? As an employer, you need to crystallize what fairness means for your organization and your employees. Is there fairness in terms of opportunities and career growth availability, Are you treated fair in your new compensation? Were you treated fair in terms of opportunities in the organization? Fairness is more than just a fancy target; you need to have a program and guidelines. Fair Pay philosophy is super important to employers. It’s like our DNA, which has various layers that help to reward our people. For Total Rewards professionals, Fair Pay is the foundational layer of competitive pay and pay for performance. To make fairness work in reality, you need to practice it, and here’s an example. Every year, we adjust our salary bands because we want to be aligned with the market. With this change, some employees fall below the minimum range. At SAP, we make automatic adjustments since we believe that nobody should be paid below the minimum salary band. We do this on a yearly basis through central funding, and to me, that means we are walking our talk. Salary transparency is another showcase of walking your talk and a compeling way of articulating your pay fairness philosophy. Another important layer is the concept of paying for performance. Pay fairness does not mean everybody is paid equally. The foundational layer can be the same, but significant potential earnings are related to individual impact and contribution. So, if you look at fairness in terms of building blocks, avoid getting blind-sighted and thinking that everybody gets the same. It’s all about the foundation and the top layers built on it. Here’s an example. If talent A works super hard and makes a great impact, and then talent B, whose contribution and impact is relatively at different level, it is clear that talent A should have more earning potential. That’s called pay for performance, and that’s fair. Employers should define fairness and educate leaders so that they can articulate fairness and keep the workforce aligned. One of SAP’s rewards programs we’re familiar with includes purchasing shares. How do employees respond to that? Is the global trend going towards making employees shareholders a standard? These programs, such as direct stock purchase plans, have been around for longer and are prevalent in the technology industry. The essence of these programs is giving the employees the right to be the company’s shareholders, supporting their growth by working for the company’s growth. At SAP, we have an award-winning program called Own SAP, available in most countries unless there are some legal limitations. It’s a program where employees can spend a certain percentage of their salary, and SAP gives a discount on buying the shares and matches their contribution. For the exception countries, SAP runs a parallel program that offers employees a different kind of financially matched benefit. This way, shares are purchased at a very lucrative price. Employees can keep them, grow their wealth, or sell them whenever they want to. The program is voluntary, but around 80% of our employees choose to participate, highlighting the value this program brings. This way, employees shape the future of the company together. Final Words Chetna Singh speaks like a passionate visionary whose pragmatic grasp of executing reward strategy wins great strides at SAP. Her vision focuses on the employee value proposition, challenging the status quo by arguing for radical transparency in salary and benefits and providing personalized rewards that support flexible work and fairness. In her words, she chooses progress over perfection since “as long as you move from A to B, and arrive at an upper level, you’re good”.