Business Daily from THE HINDU group of publications
Tuesday, Dec 09, 2008
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Tuesday, Dec 09, 2008 ePaper | Mobile/PDA Version | Audio | Blogs |
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Industry & Economy
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Human Resources ‘Perform or be replaced’
Anjali Prayag Bangalore, Dec.8 Performance-based compensation, which hitherto has been more a perfunctory function than something that actually distinguished high performing talent from the mediocre, is now strong on the agenda of most HR people. “People with low performing levels will be under pressure: they perform or will be replaced,” said Mr Arvind Agrawal, Management Board Member and President-Corporate Development and Human Resources, RPG Enterprises. Objective processSpeaking to Business Line on the sidelights of the National HRD Network’s Conference on ‘What’s Beyond? The Next Agenda,’ Mr Agrawal said companies will now make the process more objective and link it directly with the reward system. “Earlier at the RPG group, the difference in variable pay of performers from non-performers was only about 5-10 per cent, but we have now expanded the variance and at some levels it is almost 70 per cent,” he said. He rationalised the new compensation design saying, “The money we save on rewarding non-performers can now be used to reward the performers, which will benefit the organisation anyway.” At junior levels tooMr N.S. Rajan, Partner, Human Capital, Ernst & Young, said performance-linked pay is now ‘taking significant precedence, impacting even junior levels.” According to him, even for junior levels, variable pay formed 5 per cent of the cost to company (CTC) in the year 2002, which has now jumped to 12-15 per cent. Increments are unlikely to be beyond 8-10 per cent in the coming year, which will just about cover the inflation, according to Mr Rajan, who has initiated an HR Practices Survey along with NHRD, which has so far covered 188 organisations across 15 industry sectors. More Stories on : Human Resources
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