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Category: Rewarding

  • Performance Management: Rewarding Implementation

    In the last byte, we looked at the pros and cons of using an individual based versus a group based reward system. In today’s byte we look at some of the aspects that a reward system would be required to consider when being implemented.

    We sometimes hear the conversation – “Even if I don’t work, I get my salary!” This is in some ways the subject matter of today’s discussion. If employees do not see the “connection” between their performance and the reward they begin believing that they are entitled to rewards regardless of how they perform. In many ways they begin to believe they are “entitled” to a specific reward rather than them “earning” the reward.

    The Performance Management and Reward systems in organizations are built on the premise that there is a visible connection between performance and reward. It should be noted that when there is a visible relation between the performance of the employee at work and the reward related to the work, effectively handing the performance and reward could act as a lever of change that the organization might be looking out for – that is, the organization gets the performance it rewards for!

    Thus, the organization would need to communicate the direct relation between performance and reward in order to be effective! It would require to leverage the strength of earning and develop that as a culture than, looking forward to an entitlement based culture.

  • Performance Management: Rewarding (Individual & Group)

    In the last byte, we looked at why rewarding employees is a critical organizational decision. In today’s byte, we look at whether rewarding would be good if done at the individual level or a group level.

    In an organization, invariable the completion of a task requires an employee to play 2 distinct roles:

    1. As an individual contributor towards the success of the assigned target
    2. As a group member working together towards accomplishing the target.
    When the question of compensating the performance of the employee arises, different cultures look at it differently. While the American influence looks at a verily individualistic reward system, the Japanese and Chinese cultures have a group based reward system. The individual system in extreme cases could end up leading to dysfunctional behavior in an organization, while the group bases system could kill initiative and creativity of the individuals in the group if not properly planned and executed.

    A good way out of this situation would be: At the individual level, a skill based and pay-for-knowledge system would be good; at the group level, gain-sharing plans emphasizing on reducing costs would be a good approach. However, it is important to note that a case by case approach towards implementation and some tailor made modifications are necessary.

  • Performance Management: Rewarding & Importance

    In the last byte, we initiated a discussion on the underlying challenges in rewarding performance. In today’s byte, we look at why rewarding or punishing a particular behavior is a key organizational decision.

    If we were to ask our self (as representatives of an organization), bestowed with the responsibility of rewarding an employee – it would be important to begin with a thought on the impact of the decision we set out to make. We would require to realize that the decision we are about to make would affect many people throughout the system; it wouldn’t be limited to the person being rewarded or punished. When we choose to reward or punish an employee, the impact is visible not just to the employee in question but also all those around the employee – there is an element of learning that occurs as people watch what happens to the employee.

    Allocation of the reward or the punishment would involve sequential decisions be made about which of the people to reward, how should one reward the employee, and also when to reward! These three dimensions of the reward decision pretty much shape how people in the organization behave.

    The next time, we are in the scenario of taking a call on rewarding/punishing an employee we would need to remember – people watch what happens to their peers who make mistakes or have problems with any change in the system – this acts as a feeder into their own behavior. Think through about what message is sent through the organization.

  • Performance Management: Rewarding

    In the last byte, we looked at the key characteristics of an effective appraisal system. In today’s byte, we look at the aspect of rewarding performance.

    Generally, performance appraisal systems also act as feeders to rewarding decisions that the organization takes. We also have indicated in the discussion on learning that through reinforcement we could change the behavior of an individual. Extending this to the context of rewarding employees – if an organization wants good performance, it must reward good performance, and if it doesn’t want bad performance then it must not reward bad performance. If the company believes in values, teamwork, customer focus then they need to reward behavior related to these ideas.

    This looks simple, doesn’t it?

    If one were to ask a seasoned professional the answer would be “No”. Reward decisions are the most difficult to make! Surprised?

    Well the solution lies in realizing that not everyone works for money! While pay and reward for performance have value, a lot of other dimensions like – values, trust, fun and meaningful work all begin playing a key role. These elements make reward decisions most difficult and complicated decisions in organizations.

    We shall continue this discussion over the next few blogs.