Joris De Wortelaer has twenty years of experience as a Compensation & Benefits Manager at ING Belgium. He is a labor law attorney with his own practice and a professor of legal aspects of HR management at VUB in Brussels. Nathalie Arteel interviews him about compensation policy and recognition.
Joris De Wortelaer tells me about a discussion with students that completely changed his perspective and thinking.
Joris: “About six years ago, I had a discussion with law students at VUB. I was teaching about salary optimization and pensions. The students made it clear that they disagreed with what I was telling them. They said pension savings didn’t interest them and that they would rather go have a beer at Tomorrowland. One student said that going out for pizza once a month with a colleague or even the CEO would be a much bigger incentive for her than a meal voucher.
Those reactions caused a huge shift in my thinking about how we compensate and recognize people, leading me to move toward experience-driven recognition. Think, for example, of supporting a project a child of your employee wants to start, paying for employees’ children’s school trips, sponsoring an employee’s sports activity, or organizing a workation. That kind of recognition sticks with employees for life.”
As a C&B Manager at ING Belgium, you initiated many programs to recognize employees, both financially and non-financially.
Yet you already noticed back then that something fundamental was missing: people were receiving a lot, but didn’t feel sufficiently connected or appreciated. Why was that?
“Fundamental elements were missing to ensure people truly feel connected. If you ask me now what the most important thing is in a job, it’s this question: am I happy? Happiness is essential in the story of recognition. With financial incentives, the feeling of appreciation disappears quite quickly. I also spent years thinking that we should increase people’s purchasing power. But purchasing power is not the same as recognition.”
“The best companies are those where people are happy. When people are happy, they think along and are more creative. We talk about labor costs and salary burdens as if you’re carrying a backpack full of stones. That’s a completely wrong perception. People who feel happy in their job represent a value equivalent to 20 to 25% in money. When I receive my employees’ invoices at the end of the month, that is a happiness cost.”
The IMF advocates abolishing automatic wage indexation because that mechanism lacks flexibility.
How do you view giving employers more flexibility to reward effort?
“Of course, indexation makes sense for people in the basic and minimum salary scales. These are often people doing essential work, such as in healthcare. Indexation must safeguard their purchasing power and can be decisive in whether their child can go on a school trip. But why index the salary of someone already earning €10,000 per month? That just increases their savings.”
“When it comes to flexibility in rewarding effort, we too quickly revert to collective compensation. I believe there must be a balance between paying based on company results and on individual performance. The latter should be based on immediate, fully individualized recognition. A manager should have a budget outside of the standard compensation & benefits systems to directly reward an employee who truly makes a difference.”
“When it comes to flexibility in rewarding effort, we too quickly revert to collective compensation.”
I notice that many companies that want to recognize their employees are held back by taxation and legal requirements.
“However bluntly I put it, I see a lack of courage in HR across the board. HR too often operates today with the three D’s: that’s not possible, that can’t be done, and that’s not allowed.”
If HR works like that, a CEO would be better off abolishing the department. You need an HR function that truly makes a difference. The problem is that in Belgium, there are no alternative comp & ben programs. Existing courses focus on: how to convert €100 gross into as much net as possible. That provides no competitive advantage and reinforces nothing. Group insurance, work anniversaries, and all that artificial optimized compensation have no real value. They don’t create a fundamental sense of connection among employees.”
“I know wage optimization has been heavily promoted for years in seminars, but then you follow the wrong seminars — move away from that. That’s why I want, also in collaboration with you, Nathalie, to start an alternative C&B program. That program is about achieving a competitive advantage with your salary policy by looking at how you can use the available salary budget to retain the employees you need. You need to reward differently, dare to differentiate, and implement employee participation with profit-sharing based on their contribution to company results. That 2001 law I actually wrote for the government myself.”
Three Pieces of Advice for HR to Make a Difference in 2024
- Break the dogma that you must optimize salaries to the extreme. Collective optimizations don’t generate anything extra — your competitors are doing the same.
- Return focus to the individual. A manager must truly know their people. Listen carefully, understand who they are, and what matters to them: you can only genuinely appreciate someone if you know what they value. It’s common sense, yet too often decisions are made for the individual rather than with them.
- Consider giving employees a high degree of autonomy, allowing them to determine how they perform optimally. Let them develop their role as if they were a small entrepreneur. If they succeed and make a difference, recognize it with short-term incentives so they immediately feel valued and rewarded.
