Beyond Efforts, Beyond Results, Beyond 'Recognition'
"The Greater the time difference between performance and reward, the less is its value"
Abstract:
The system of rewarding performances has been inherited from long back in the days of Mahabharata when the greatest soldiers were rewarded with gold ingots or knick-knacks, or received an extraordinary place in the king's assembly upon returning from states of war. The best performer in the swayamvara got wedded to the fine-looking princess! The concept remains the same, only the approach today has become more quantitative. At its core, performance management is designed to fairly and accurately assess how well people do their work, provide feedback to help them improve, identify goals and objectives for future performance, and tie the overall evaluation to some valued consequence, such as a pay increase, bonus, promotion, or some other form of recognition. People perform well and are motivated by both fundamental and extrinsic rewards. To be successful, the reward structure must recognize both sources of motivation. Almost all reward systems target the three essentials of any business – attracting, retaining, and motivating the best talent available on board.
"If you pick the right people and give them the opportunity to spread their wings and put recognition as a carrier behind it, you almost don't have to manage them" – Jack Welch
Not Just Money: An Introduction to Performance Rewards
For a country like India, out of all, financial rewards have always been a vital constituent of the reward system, but there are other factors that encourage employees and influence their level of performance. In fact, quite a lot of studies have established that among employees surveyed, money was NOT the most central motivator, and in several instances, managers have found money to have a DEMOTIVATING or negative effect on employees.
To ensure that the reward system is in line with the business goals and motivates the desired behaviors in employees, it is essential to carefully consider the rewards and strategies utilized and ensure the rewards are linked to or based on performance. To be effective, any performance measurement system must be attached to the monthly compensation or some form of reward. Rewarding performance must be a continuous managerial activity, not just an annual pay-linked ritual.
Strategies for rewarding employees' performance and contributions to the business objectives include non-monetary and monetary mechanisms. We have outlined a few strategies in this write-up. The listing is not very comprehensive, and individual units/departments may have to identify further mechanisms that are appropriate for and sustain their culture and goals.
Satisfaction Surveys identify lack of recognition
In a client employee satisfaction survey, the question about whether the company cared about the welfare and happiness of its employees drew divergent views. Some people agreed; others disagreed.
So, the Culture and Communications team conducted a second survey asking what would make the employees feel as if the company cared about them. They developed several answers employees could check and provided room for their comments and additional thoughts.
Fifty-five percent of the respondents said that praise and attention from their supervisor would make them feel as if the company cared about them and their well-being. As you might also expect, money, benefits, and events such as company lunches ranked high, too. But recognition from the supervisor ranked above all other choices.
I have sponsored similar surveys in different organizations. The findings are always similar. Employees want to know that they have done a good job – and that you noticed. Employees want to be thanked and appreciated.
Performance Management linked to business goals
Just visualize this: you join the Indian cricket team, and have a grand year. Your team wins the title match, and you are in the running for Man of the Match. But, the judges summon and award the Man of the Match to a bighead and ball-hog on the worst team in the league. The justification: the ball-hog has fine long hair and a dimply smile, resembling the dude in the leading motorbike TV commercial.
Couldn't believe, right? Well, this is the familiar story in corporations all the time.
This is what happens when the performance appraisal process is not in line with the business goals and mission. Employees are evaluated based on subjective and pointless standards because nobody has defined the proper benchmarks. Marketing guys are acknowledged by marketing managers for bells and whistles and are praised for creativity, not articulacy or internal customer satisfaction. HR employees get de-rated if company attrition is skyrocketing, as if the HR chaps are liable to make people from production or quality departments go away. Quality Systems people are rewarded for the big binder of strategic recommendations for business, not the accomplishment of the projects. When performance appraisal fails to make the organization efficient, that entire physical, mental, and emotional attempt drains employees and generates a negative feeling in general.
We need to further analyze why, in a developing country like India, does performance management so much stand on the other side from organizational line of attack?
Performance management systems are already in place in almost the entire corporate world. They may be unproductive, but employment statutes mandate them. Fear of union grievance fills many personnel records with worthless formalities and paperwork. Even if the organizations have evidently defined missions, time and again they don't communicate this to their employees, nor do they believe in those missions.
You must be surprised to know, but strategic vision is illustrious for never getting implemented! We have seen companies putting more effort into new names and new logos than into actual change. The system that bogs down change most frequently is performance management, by limiting discussion and deliberation to the past and present and ignoring the future. It's easy to talk about what you needed to do yesterday. It's much harder to guess what you'll need to do tomorrow.
Thrust Employee appreciation up a mile
Employee recognition is not being considered as vital in most organizations. Employees grumble about the lack of recognition repeatedly. Senior management is so engaged in daily work that they often ask, "Why should I recognize or thank him? He's just doing his KRA." Such incidental factors combine to create workplaces that fail to provide recognition for employees and this goes on to build up disgruntled mindsets and finally the separation.
Senior managers who prioritize employee recognition understand the power of recognition. They know that employee recognition is not just a pleasant thing to do for people. Employee recognition is a communication tool that reinforces and rewards the most important outcomes people create for your business.
When you recognize people efficiently, you strengthen, with your selected means of recognition, the actions and behaviors you most want to see people go over.
An effective employee recognition system is simple, immediate, and powerfully reinforcing. Employees feel cared about and appreciated. It may seem simplistic, but people who feel recognized and cared about produce more and better work.
A person in charge of employees makes other people feel imperative and appreciated. The leader excels at creating opportunities to endow with rewards, recognition, and thanks to his team. A leader creates a work atmosphere in which people feel important and appreciated.
Don't just go adopting best practices: The saga of 360-degree performance monitoring
Formalized performance assessments are important for several reasons. Performance reviews are one way of establishing benchmarks for an employee's work area. In the era of chaotic work environments, these reviews provide for a prearranged time to pause, plan goals, and set concrete guidelines that the employee will be judged against in terms of deciding grade hikes, salary hikes, and his or her yearly training needs. The organization can accomplish this without including the employee in the process, but that is to close the eyes to the employee side of the equation, and thus performance reviews make time for employee participation. This is NOT the time for the employer not to tell the employee what he/she did right or wrong, rather, it is time to discuss with them various aspects of his/her key responsibilities. Employees like to be heard by management, and this is the guarantee that, no matter how hectic or practical the organization might be, there must be specific time allotted for their input.
Now actually what is this 360-degree review? The concept is to improve team functionality from diversified perspectives - supervisor, subordinate, associate, in-house contact, outside contact, and of course, the customer. It is best, on the other hand, to gradually put such systems into operation. Begin with two or three reviewers and work your gradient to a number that you are at ease with and that works for your organization. Ensure that the administrator gathering the data from the various reviewers is sensitive to the concerns of the employee being reviewed and treats all information accordingly and with the quantitative weightage (anchored with mutual discussions between the reviewer and reviewee, personal issues, etc.).
For corporations with long-established top-down structures, implementing 360-degree systems can be somewhat thornier. The employees in such cultures with their set inertia are inherently going to be rougher with the proposal of co-workers, rather than their direct supervisor, conducting a performance review. Moreover, others might not be in a situation to do a sufficient assessment because of the narrow information flow. In these situations, 360-degree systems can be used as an instrument to open the lines of communication within the company. But it is absolutely essential to start little by little to build the self-confidence of the employees in the system. If you decide against a 360-degree system for this type of setting, definitely stick with some kind of a formal performance review process - even if it means the old supervisor-only review standby.
It's true that for organizations that emphasize multidirectional and team environments, 360-degree feedback performance review systems are great. But if you go in deep research work, like we did at SONA Koyo before implementing this colossal system, you will be shocked! A recent study about HR practices, the Watson Wyatt Human Capital Index study, found that 360-degree feedback can be counter-productive in some situations. In fact, the study concluded, the practice might produce negative returns for shareholders. Even in a work culture where
From India, New Delhi
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22"The Greater the time difference between performance and reward, the less is its value"
Abstract:
The system of rewarding performances has been inherited from long back in the days of Mahabharata when the greatest soldiers were rewarded with gold ingots or knick-knacks, or received an extraordinary place in the king's assembly upon returning from states of war. The best performer in the swayamvara got wedded to the fine-looking princess! The concept remains the same, only the approach today has become more quantitative. At its core, performance management is designed to fairly and accurately assess how well people do their work, provide feedback to help them improve, identify goals and objectives for future performance, and tie the overall evaluation to some valued consequence, such as a pay increase, bonus, promotion, or some other form of recognition. People perform well and are motivated by both fundamental and extrinsic rewards. To be successful, the reward structure must recognize both sources of motivation. Almost all reward systems target the three essentials of any business – attracting, retaining, and motivating the best talent available on board.
"If you pick the right people and give them the opportunity to spread their wings and put recognition as a carrier behind it, you almost don't have to manage them" – Jack Welch
Not Just Money: An Introduction to Performance Rewards
For a country like India, out of all, financial rewards have always been a vital constituent of the reward system, but there are other factors that encourage employees and influence their level of performance. In fact, quite a lot of studies have established that among employees surveyed, money was NOT the most central motivator, and in several instances, managers have found money to have a DEMOTIVATING or negative effect on employees.
To ensure that the reward system is in line with the business goals and motivates the desired behaviors in employees, it is essential to carefully consider the rewards and strategies utilized and ensure the rewards are linked to or based on performance. To be effective, any performance measurement system must be attached to the monthly compensation or some form of reward. Rewarding performance must be a continuous managerial activity, not just an annual pay-linked ritual.
Strategies for rewarding employees' performance and contributions to the business objectives include non-monetary and monetary mechanisms. We have outlined a few strategies in this write-up. The listing is not very comprehensive, and individual units/departments may have to identify further mechanisms that are appropriate for and sustain their culture and goals.
Satisfaction Surveys identify lack of recognition
In a client employee satisfaction survey, the question about whether the company cared about the welfare and happiness of its employees drew divergent views. Some people agreed; others disagreed.
So, the Culture and Communications team conducted a second survey asking what would make the employees feel as if the company cared about them. They developed several answers employees could check and provided room for their comments and additional thoughts.
Fifty-five percent of the respondents said that praise and attention from their supervisor would make them feel as if the company cared about them and their well-being. As you might also expect, money, benefits, and events such as company lunches ranked high, too. But recognition from the supervisor ranked above all other choices.
I have sponsored similar surveys in different organizations. The findings are always similar. Employees want to know that they have done a good job – and that you noticed. Employees want to be thanked and appreciated.
Performance Management linked to business goals
Just visualize this: you join the Indian cricket team, and have a grand year. Your team wins the title match, and you are in the running for Man of the Match. But, the judges summon and award the Man of the Match to a bighead and ball-hog on the worst team in the league. The justification: the ball-hog has fine long hair and a dimply smile, resembling the dude in the leading motorbike TV commercial.
Couldn't believe, right? Well, this is the familiar story in corporations all the time.
This is what happens when the performance appraisal process is not in line with the business goals and mission. Employees are evaluated based on subjective and pointless standards because nobody has defined the proper benchmarks. Marketing guys are acknowledged by marketing managers for bells and whistles and are praised for creativity, not articulacy or internal customer satisfaction. HR employees get de-rated if company attrition is skyrocketing, as if the HR chaps are liable to make people from production or quality departments go away. Quality Systems people are rewarded for the big binder of strategic recommendations for business, not the accomplishment of the projects. When performance appraisal fails to make the organization efficient, that entire physical, mental, and emotional attempt drains employees and generates a negative feeling in general.
We need to further analyze why, in a developing country like India, does performance management so much stand on the other side from organizational line of attack?
Performance management systems are already in place in almost the entire corporate world. They may be unproductive, but employment statutes mandate them. Fear of union grievance fills many personnel records with worthless formalities and paperwork. Even if the organizations have evidently defined missions, time and again they don't communicate this to their employees, nor do they believe in those missions.
You must be surprised to know, but strategic vision is illustrious for never getting implemented! We have seen companies putting more effort into new names and new logos than into actual change. The system that bogs down change most frequently is performance management, by limiting discussion and deliberation to the past and present and ignoring the future. It's easy to talk about what you needed to do yesterday. It's much harder to guess what you'll need to do tomorrow.
Thrust Employee appreciation up a mile
Employee recognition is not being considered as vital in most organizations. Employees grumble about the lack of recognition repeatedly. Senior management is so engaged in daily work that they often ask, "Why should I recognize or thank him? He's just doing his KRA." Such incidental factors combine to create workplaces that fail to provide recognition for employees and this goes on to build up disgruntled mindsets and finally the separation.
Senior managers who prioritize employee recognition understand the power of recognition. They know that employee recognition is not just a pleasant thing to do for people. Employee recognition is a communication tool that reinforces and rewards the most important outcomes people create for your business.
When you recognize people efficiently, you strengthen, with your selected means of recognition, the actions and behaviors you most want to see people go over.
An effective employee recognition system is simple, immediate, and powerfully reinforcing. Employees feel cared about and appreciated. It may seem simplistic, but people who feel recognized and cared about produce more and better work.
A person in charge of employees makes other people feel imperative and appreciated. The leader excels at creating opportunities to endow with rewards, recognition, and thanks to his team. A leader creates a work atmosphere in which people feel important and appreciated.
Don't just go adopting best practices: The saga of 360-degree performance monitoring
Formalized performance assessments are important for several reasons. Performance reviews are one way of establishing benchmarks for an employee's work area. In the era of chaotic work environments, these reviews provide for a prearranged time to pause, plan goals, and set concrete guidelines that the employee will be judged against in terms of deciding grade hikes, salary hikes, and his or her yearly training needs. The organization can accomplish this without including the employee in the process, but that is to close the eyes to the employee side of the equation, and thus performance reviews make time for employee participation. This is NOT the time for the employer not to tell the employee what he/she did right or wrong, rather, it is time to discuss with them various aspects of his/her key responsibilities. Employees like to be heard by management, and this is the guarantee that, no matter how hectic or practical the organization might be, there must be specific time allotted for their input.
Now actually what is this 360-degree review? The concept is to improve team functionality from diversified perspectives - supervisor, subordinate, associate, in-house contact, outside contact, and of course, the customer. It is best, on the other hand, to gradually put such systems into operation. Begin with two or three reviewers and work your gradient to a number that you are at ease with and that works for your organization. Ensure that the administrator gathering the data from the various reviewers is sensitive to the concerns of the employee being reviewed and treats all information accordingly and with the quantitative weightage (anchored with mutual discussions between the reviewer and reviewee, personal issues, etc.).
For corporations with long-established top-down structures, implementing 360-degree systems can be somewhat thornier. The employees in such cultures with their set inertia are inherently going to be rougher with the proposal of co-workers, rather than their direct supervisor, conducting a performance review. Moreover, others might not be in a situation to do a sufficient assessment because of the narrow information flow. In these situations, 360-degree systems can be used as an instrument to open the lines of communication within the company. But it is absolutely essential to start little by little to build the self-confidence of the employees in the system. If you decide against a 360-degree system for this type of setting, definitely stick with some kind of a formal performance review process - even if it means the old supervisor-only review standby.
It's true that for organizations that emphasize multidirectional and team environments, 360-degree feedback performance review systems are great. But if you go in deep research work, like we did at SONA Koyo before implementing this colossal system, you will be shocked! A recent study about HR practices, the Watson Wyatt Human Capital Index study, found that 360-degree feedback can be counter-productive in some situations. In fact, the study concluded, the practice might produce negative returns for shareholders. Even in a work culture where
From India, New Delhi
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Mid-Year view on Performance Reward Trends.pdf
Performance Review Form - KDCL for year 2010.xls