Honda North America’s new reward plan

Honda North America is redefining its total reward and employee value proposition as a result of being given autonomy from its Japanese head office on 1 April 2013.

Its reward strategy will transform from being a one-size-fits-all package, with performance uniformity and lifetime employment, to one targeted at flexibility and performance differentiation with a motivational deal and cost containment.

Speaking at the annual WorldatWork Total Rewards conference in Philadelphia, USA, Amy Coontz, manager of human resources and engagement at Honda North America Service, said: “We needed to start thinking about [Honda] North America as its own business now, it needs to carry its own torch.”

It is working on a programme that will transform the company culture to be more competitive and innovative, with it being seen as an employer of choice for top talent.

“We have a very strong belief that we want to be a unique organisation. We are trying to move from a Japan-led organisation that was immersed in the values and worries of Japan, into a self-reliant organisation,” said Coontz.

Honda North America wants to refocus on Honda’s innovative historic roots. She added: “We want to move into risk tolerance being okay, and focussing on motivation.”

There will be a change of mindset for staff who may be complacent and used to long tenures in their job. To date, in terms of reward, it has sometimes been easier to offer the same thing to everyone, which has led to high costs for Honda.

It has also been hard for managers to differentiate high performers. “Managers really struggle with using the whole spectrum [of performance measurements],” Coontz said.

Honda North America will implement a new total reward philosophy that will see health and welfare, compensation and retirement targeted at the median level, but adjusted for key performance or role.

The new retirement and retiree medial programmes will launch in early 2014, while the new healthcare and wellness programmes will launch in 2015.

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Its talent management will be targeted above median, and programmes supporting this are currently being rolled out.

There will be a strong emphasis on performance, and the incorporation of development and learning. A new base pay model will be launched in 2014 and the new incentive programmes will be launched in 2015.