Pay cuts, layoffs, deferred appraisals, slashed bonuses-all these became the hallmark of the last two quarters as the world grappled with the economic fallout of the COVID crisis. This economic crisis has resulted in the compensation and rewards component of employee experience taking a big hit for many employees, sending them two to three years behind in their financial standing with or without exaggeration. Yet we expect employees to maintain more than 100% productivity and performance with no respite on the financial front. Despite being nearly six months into the crisis, there persists a regressive approach towards the impact of the crisis beyond business. The financial and non-financial benefits are yet to experience a much needed revamp to meet the employee needs of today.
But as recovery begins, it’s time to step up and revisit the total rewards strategy, factoring in both the compensation as well as benefits. How should businesses go about streamlining the new performance and reward framework? In an exclusive interaction with us, Padmaja Alaganandan, Chief People Officer, PwC India, shares her views on rethinking performance and benefits for the new normal.
The earlier mindset around working from home being synonymous with lesser work being done has been challenged by the endless hours of work being put in by leaders, managers, and employees. However, there continues to be a need to prove online presence. What is your take on this?
While work from home as a concept may not have been as widespread as it is now, it has been understood and prevalent in some organizations and sectors for some years. For instance, being a knowledge business, we have had different flexibility options for several years and many of our staff work from home when they don’t need to come in. Many forward-looking organizations had also invested in robust technology infrastructure and systems and processes that enable its people to work remotely. Such firms have been able to adjust to the new way of working almost seamlessly, both from the operational and mindset point of view.
I believe the focus is less about being present online than it is about deliverables and outcomes. The focus for us has been about what is getting done rather than where or how many hours one was online to get it done.
Of course, outcomes need to be measurable, whether in terms of the timeliness of deliverables or the quality of output.
One of the key aspects getting reinforced in the current working environment is the need to have trust in our people/team members and empower them to address customer asks in ways they consider appropriate. Ultimately, we have to understand that the majority of teams place the organizational interest at heart and work towards that. This has called for cultural changes within many organizations that were not used to work this way.
Yes, there are occasions and activities that require in-person bonding and virtual collaboration, and it is important to be available online for those situations. However, that doesn’t have to be 100% of the time.
What should employers keep in mind while revising the performance framework for their remote employees?
I do not see that any fundamental change is called for in the performance framework for remote employees as compared to what we did earlier. At the end of the day, performance is evaluated based on principles on a balanced framework - value added to the customer, financial or economic parameters, team or people-based goals, and goals related to quality and process. There is also focus on role-based goals - which are linked to routine expectations from a job- as well as development based goals that are more in the nature of improvement or stretch in one’s capabilities. All these principles are as relevant today as earlier, though specific targets may need adjusting based on market realities for each sector.
Weightages around each of these elements could change in the current year - for instance, strong focus on cost management, enhanced engagement with team members and focus on wellness, greater alignment of teams with the external business environment and customers, etc.
It is important to keep in mind that while organizations must focus on coming through these times and performance measures will reflect that, the focus should also not be very short term and impact longer-term sustainability or viability.
What are some of the pillars of performance that you focus on? In your opinion, which performance metrics will now determine compensation?
As mentioned above, there is no change in the performance framework for our people, including on the pillars. We will continue to look at the metrics of client value and satisfaction, financial performance, quality of people leadership and team engagement, new solution development, and quality of work.
As to the impact of these on compensation - while we all will have to continue to reward strong performance in monetary and non-monetary ways, it is critical to driving team cohesion and purpose too. Organizations will need to protect this aspect of their culture, and this may require more inclusive and egalitarian approaches to compensation as compared to previous years. It will be an important balance to maintain with carefully crafted approaches.
Industry-wide pay cuts have sent several employees 2 or 3 years behind in their financial standing. With finances expected to be in a slump for an unpredictable time period, what reward strategies can organizations consider to help employees navigate these challenging times?
While it is important for organizations to recalibrate some of their financial decisions and commitments in the new business environment, I think the majority have been compassionate and humane while going about it. The industry-wide pay cuts you are referring to is because of organizations’ taking calls to protect livelihoods across the board rather than have the focus on layoffs or harsher measures, to the extent possible. It is important to retain perspective on this - while pay cuts are never pleasant, in difficult times there needs to be an appreciation of the fact that having a secure livelihood and a caring employer is a blessing. And many employees are also finding that expenses have also reduced on many fronts, so the impact of the cuts is less than in earlier times.
Reward strategies in these times reflect the core of the organizations’ culture and beliefs - for instance, we have focused on wellness and healthcare-related benefits for all our teams, as well as focused on upskilling relevant to these times. We have a big push on digital upskilling including aspects such as virtual client engagement, have invested in health and mental wellness counseling, as well as additional COVID insurance. We have also looked at appreciation for those who’ve gone the extra mile to help a client, a team member, and ensure we recognize these extraordinary efforts.
Organizations will naturally make market-based corrections as needed for key talent, but I believe actions that reflect broader care and concern are more important.
Employees also value the opportunity to participate in giving back to the country and to society, as well as supporting our less fortunate fellow citizens. It is also heartening to see many of our employees not only contribute to the firm’s initiatives towards supporting the nation, funding, and social organizations in these trying times but also give back to the society as individual warriors. Their personal stories inspire us all and add to the morale of all our people.
As business and HR leaders look to reset the workplace and people policies in the new reality of work, how is the benefits landscape changing? Any specific initiative you plan to take around performance and rewards?
We have been having a strong focus on employee wellbeing and safety, and have been trying to align our benefits for this time. Some of the recent initiatives we introduced include the announcement of COVID insurance for our employees and their family members, including one set of parents. We already have in place a strong medical insurance cover and PwC’s Group COVID coverage can be utilized by employees once the cover from the group medical coverage has been exhausted.
Leaves availed for COVID related contingencies are not to be deducted from employees’ leave balance.
We are facilitating specific asks to the extent possible by rallying our networks within the organization - related to admission, quarantine facilities, testing facilities, medication, or other asks. Our leaders are taking a lot of personal interest in helping our people get the right kind of intervention, should they face any trouble doing it themselves, and all colleagues rally around.
We have had tie-ups with physical fitness chains to provide access to online fitness sessions for employees, and also medical helpline and mental wellbeing counselors. Our regional teams conduct a regular calendar of wellness and engagement activities for our teams. At an operational level, we are also facilitating smooth work from home through necessary technology investments as a firm and tools which are important for virtual collaboration, tie-ups with furniture suppliers, etc.