As AI takes on a larger share of work, the defining rewards question is shifting from whether an outcome was delivered to what the employee contributed beyond what technology could produce independently.
For Debashish Majumdar, Group Head – Performance & Rewards at RPG Group, the principle is clear: “Recognise the effort and reward the outcome.”
That requires organisations to examine what was within an employee’s control, how intelligently AI was used and where human judgement added value. The aim is not to discourage AI adoption, but to distinguish between machine-assisted output and the contribution made by the person using it.
“We should only reward outcomes that can be influenced by the employee,” Majumdar said in an exclusive conversation with People Matters ahead of TRWC 2026.
AI is making attribution harder
AI can accelerate analysis, generate insights and perform tasks that previously demanded significant employee effort. Performance systems must now determine whether employees merely used these capabilities or extended them through contextual understanding, problem-solving and judgement.
Majumdar believes this assessment will need to become much sharper. If organisations fail to separate access to AI from the value created through it, they risk rewarding technology-enabled output without recognising the quality of human contribution.
The challenge extends beyond AI. Markets, input costs and supply chains are changing quickly enough to make some performance targets less relevant before the year ends. Rewards systems must therefore account for the context in which results are delivered.
At Zensar, for instance, RPG Group must define what qualifies as AI-related revenue and how it should be measured. In its manufacturing businesses, shifts in raw-material prices and supply chains can change the relevance of targets during the year, he explained.
The question is not simply whether employees achieved the number set for them. It is whether that number still measures what matters.
Targets must move at the pace of the role
Frequent target changes, however, can create their own problems. If goals are revised before their effectiveness is assessed, employees may lose clarity about what the organisation expects.
Majumdar suggested that annual goal-setting remains appropriate for most employees, while frontline roles may require monthly or quarterly performance horizons. As responsibility increases, the measurement period becomes longer.
Frontline teams may be measured against immediate operational outcomes, middle managers against quarterly performance and senior leaders against annual commitments. At the highest levels, long-term incentives may extend the horizon to three to five years.
This creates a clearer connection between the duration of a target and the level of impact expected from the role.
Differentiation requires visible fairness
Sharper performance differentiation can improve the allocation of rewards, but only when employees understand how decisions are reached.
At RPG Group, Majumdar explained, goals are established at the beginning of the year along with their relationship to ratings and variable pay. Managers and employees discuss performance at year-end before ratings move through a broader calibration process involving HR and senior leadership.
This prevents one manager’s judgement from automatically becoming the final outcome. When ratings change during calibration, the reasons must be communicated back to the employee.
Majumdar acknowledged that no system is perfect, but the intent must remain clear: performance and rewards decisions should be fair, transparent and supported by due diligence.
That becomes even more important as employees gain access to wider pay information and become more willing to question outcomes. Transparency must explain not only the final number, but also the goals, judgement and governance behind it.
Better rewards do not always require bigger budgets
Organisations can also increase the perceived value of rewards without continually expanding their budgets.
One opportunity is to introduce more flexible, employee-friendly compensation structures that reflect different life stages and needs. Another is to allocate the available rewards pool more deliberately.
“We should pay disproportionately to our high-performing employees,” Majumdar said, emphasising that differentiation must remain intelligent and fair.
He also pointed to the value of linking the rewards pool with company performance. Instead of treating it as an entirely fixed amount, organisations can connect payouts to revenue and profitability. In stronger years, employees share more meaningfully in the value created.
This gives both the organisation and its people a clearer stake in the same performance outcomes.
Conglomerates need a common core, not complete uniformity
For a conglomerate such as RPG Group, rewards design must account for businesses operating across different sectors, competitive environments and growth cycles.
Majumdar supports broad standardisation, with customisation permitted only when there is a strong business reason. Sector practices, competitor behaviour or the maturity of a business may justify an exception; individual leadership preference should not.
A consistent rewards philosophy also helps reinforce a shared group identity. Too much variation can leave each company operating with a disconnected employee proposition and weaken the value of the parent brand.
Majumdar sees the employer value proposition as the anchor. Once organisations are clear about what they promise employees, they can define a rewards philosophy and determine where they want to position themselves across fixed pay, total compensation and long-term incentives.
Clarity and consistency help attract employees whose expectations align with what the organisation can credibly and sustainably offer.
A great place to work must also be a great place to grow
The next rewards mandate, Majumdar believes, is not solely about compensation. Organisations must build for performance and wellbeing together.
At RPG Group, this is expressed through the ambition to be both a “great place to work” and a “great place to grow”. Employee happiness matters, but career opportunity also depends on the organisation growing strongly enough to create new roles, responsibilities and experiences.
Trust and autonomy complete this equation. As organisations move away from centralised decision-making, employees at middle and junior levels need greater space to make decisions, learn from experience and build capability.
For rewards leaders, however, the final caution is to avoid allowing data and process to make the system mechanical.
“We become too process- and number-oriented, but HR and rewards leaders have to understand that the employee is at the centre,” Majumdar said. “Start with empathy.”
That is the central test of a future-ready rewards system: whether it can distinguish contribution, differentiate performance and adapt to business realities without losing fairness or sight of the person behind the number.
Join the conversation at TRWC 2026
Debashish Majumdar is joining People Matters Total Rewards & Wellbeing Conference 2026, where leaders will go deeper into how organisations can connect rewards, performance, choice, transparency and wellbeing in a changing world of work.
The conference will bring together CHROs, Total Rewards leaders and compensation, benefits and wellbeing practitioners under the theme “Orchestrating Performance in a Choice-Driven Workforce.”
It is taking place on 18 November 2026 at The Leela Ambience, Gurugram, under the theme “Orchestrating Performance in a Choice-Driven Workforce.”
Explore the agenda and register for TRWC 2026 now.
