The Hindu Business Line : Up, up and away

Do you constantly worry that you're shortchanged by your employer, despite a brilliant performance? Read on to find out how companies decide whom they want to reward.

"Self-esteem means I have a good self-worth: I know who I am and because I know who I am, I can deal in a world of reality."

— T.J. Rodgers, Founder, Cypress Semiconductor Corporation.

Rodgers goes on to give an instance of good self-worth: "As a manager of a company, I can walk up to an employee with good self-esteem and say that his project is all screwed up. The employee knows I like him, knows that I value him and I am not threatening his tenure. And if he responds with: `Yes, I have screwed up' and tells me why he did it and what he's going to do to fix it, then he has a high self-esteem and self-worth."

In the Indian context, Wipro, the country's biggest employer, follows an unprecedented practice of rewarding the best mistake made by an employee. Explaining the rationale behind this, Rajib Ghosh, Corporate HR Manager, Wipro Technologies, says, "This practice brings with it two benefits: it helps one recognise one's weaknesses and second, understand one's worth in the organisation." It goes without saying, of course, that the `mistake committed' has to be within ethical boundaries defined by the company. Ghosh admits that he himself won the `laurel' sometime ago. Rewarding a negative behaviour to bring about a positive change is only one method, albeit a revolutionary one, to judge employee performance. Traditionally, most organisations rely on performance management systems (PMS), which have gone through the grind and have become well-oiled systems.

Says Shabbir Merchant, Vice President, Consulting Services, GrowTalent, "Generally PMS assesses the competency shown by the employee. But, the GrowTalent model measures the capacity of the employee which is a combination of both competency and potential." This HR consulting and change management firm believes that assessment is not about what employees are currently doing, but what they are capable of doing. "It's like looking at a half-filled glass and assessing how much more it can hold," is his analogy.

Companies have also experimented with assessment centres that give a multi-dimensional and comprehensive report on employee potential. Generally, individual assessments made by supervisors are unidimensional, but assessment centres remove that drawback.

Merchant cites an instance when GrowTalent set up an assessment centre to recruit a regional manager for an FMCG major. The centre defined the attributes of the job and ranked candidates according to capabilities, which was an input for the recruitment decision.

Ghosh of Wipro sees two opportunities for companies to assess employees. The first happens before the selection process and the second, a continuous one, after the employee joins the organisation. In the first instance, apart from technical tests, companies look for fitment in the organisation, through tests for behavioural competencies. Quarterly appraisals for employees have become the norm now, apart from the heavy-duty annual appraisal. Then there is the 360-degree feedback, which gives employees a feel of the vibes they share with their supervisors, peers and juniors.

Wipro has a Talent Reviewing Planning Process, an HR-led initiative, where managers plan their successors. "This gives employees some idea of where they stand in the organisation," says Ghosh. It also helps that IT employees are well networked and constantly working out their batch parities..

Worth recognising

Performance appraisal, reward and recognition, competency mapping and variable pay are terms restricted not just to the IT industry. At LG Electronics India, the annual performance appraisal system allows employees to assess their worth, the value addition they bring, and their understanding of themselves both functionally and behaviourally, and as individuals and team members.

"Recognising and rewarding is the best tool for helping employees realise their worth in the organisation," says Dr Yasho V. Verma, the company's Vice President, HR and MS. In addition, a half-yearly performance evaluation is used to give a half-yearly bonus. Verma wholeheartedly backs the continuous assessment system because, "in today's world, business is like war. It has to be fought and won every day."

J.M. Sampath of Arpitha Associates, a Bangalore-based management consultancy, says an employee's worth to the organisation should be viewed as a three time-dimensional contribution: past contribution, present contribution, and (likely) future contribution. The organisation must evaluate how much individuals contribute to furthering the vision and values of the company. He gives the example of GE, where employees not in line with the organisation's vision and values are shown the way out, but only after efforts to align them fail.

On how employees see themselves in organisations, Sampath says, "Employees base their worth on the power and proximity to power they enjoy within the organisation. Their sense of worth is also based on how companies demonstrate how much they value their employees."

Expectations etc.

Arpitha Associates helps companies and employees in the value clarification process. But what happens when there is a discrepancy between an employee's sense of self-worth and the company perception? And, often, this conflict arises over monetary compensation, though sometimes it occurs over job profile too. Sampath says employees feel short-changed when their trust in the organisation is not honoured, or when the deserving don't grow in the organisation.

Verma of LG agrees that employees have felt let down on occasions, especially with regard to organisational growth. At LG this issue is tackled by sharing competitor's data. "Besides, our top 30 per cent performers get at least 30 per cent more compensation than their counterpart in the industry," he says.

At Wipro, the recruitment team can't stretch much when it comes to compensation. "If it's an extremely talented person, we try to stretch to get that person, maybe a little topper for a certain expertise."

Two-way credibility

Sampath, however, says that in the current scenario in the IT sector, some employees are short-changing organisations. An HR person he recruited for an IT company accepted the job offer and promised to join on a date agreed upon by both parties. "Two days before D-day, he calls up to say he is negotiating another offer with another company. So, it works both ways these days." Both employees and organisations must improve their credibility ratings i.e., consciously work to reduce the gap between what they say and what they do, he says, adding, "This is very critical, if we are to build lasting organisations." Says Merchant, "Make it clear to employees that those with `hot skills' are being paid an allowance. This might reduce antagonism to a certain extent." A dynamic compensation structure can create a balance.

The other solution is the variable pay concept, which finds favour with most companies because it directly recognises performance. At LG, the variable part is substantial, almost 30-40 per cent of the total compensation.

The variable component appears every three months and gives a clear indication of an employee's worth in the organisation. This, Verma feels, helps both the organisation and the employees to continuously assess and formulate coping mechanisms for the future.

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