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. But 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, Sushil Baveja, Executive Director -HR, DCM Shriram Ltd, shares his views on rethinking performance and benefits for the new normal.
The colonial 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?
I think this is primarily driven by our past way of working where it was assumed that physical presence means work is happening and goals are being met. Organizations that have never experienced work from home in the past are struggling to put protocols in place to manage remote employees, which will need both patience and practice.
“I don’t think continuous online presence is the answer to ensure that work is being carried out.”
Communication and conversations with remote employees at regular intervals are needed, which builds appreciation, understanding, and trust. Connect of leaders with both, individuals and teams would matter here. I am sure this trust-inspired from direct communication would lead to the achievement of outcomes that every manager/leader desires, without overstretching oneself to seem involved.
What should employers keep in mind while revising the performance framework for their remote employees?
“I don’t see the primary performance framework of competencies and KRAs / Goals / Balanced Scorecard etc changing much. However, there will be a need of regular and structured engagement at a certain periodicity for performance conversations.”
The goals would need to be broken up into weekly or monthly milestones for tracking progress and achievement. These would become part of the conversations and also give Managers / Leaders the opportunity to assess the behavioral competencies, give feedback, appreciate performance, and take corrective measures wherever needed. Ideally, it would be desirable for organizations to invest in a technology solution for effective management of performance, if they don’t have any in place. I would also say that it would be a journey of discovery and experimentation before an organization can conclude which methods or frameworks are best suited.
What are some of the pillars of performance that you focus on? (In your opinion, which performance metrics will now determine compensation?)
On the tangible side, I would say that outcomes would continue to be a key determinant of rewards and compensation. Outcomes are aligned with the business priorities and can keep evolving due to the dynamic nature of business and its environment. Outcomes that were once determined on the basis of an annual business plan can now change at faster frequencies. It is possible that the organization will start unfolding quarterly plans, instead of annual plans. On the softer side or behavioral front, competencies such as Emotional & Social Intelligence, Agility & Speed, Creativity & Innovation, Frugal mindset, Adaptability, Ability to deal with uncertainty, Collaboration and Growth mindset would gain greater weightage.
The challenging part would be to put measurability to the softer elements and Managers / Leaders would need to be trained to educate employees on evidencing the competencies.
In a remote situation, the need for a Performance Management process to be transparent and objective assumes greater significance than before and organizations really need to work towards it by building suitable communication programs.
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?
I think it’s a bit complex, a bit of a catch 22 situation. Organizations’ ability to pay is determined by their business performance, the revenue and profits, more than anything else. I am sure this is a temporary phenomenon since organizations and teams are working overtime to ensure business continuity and manage performance. We have seen many organizations already on their way of gradually restoring the past salary levels and bonuses with improvement in performance.
“The reward strategy and payouts can be made a little more dynamic with linkage to quarterly performance milestones, instead of annual targets so that it’s a win-win situation for everyone.”
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?
I think this would be a work in progress for many organizations and a proper framework for rewards would evolve gradually. Directionally, the trend would be towards a cautious and conservative rewards & benefits strategy. Variability in compensation would get bigger and fixed increases would be minimal. Performance differentiation would get more sharp and prominent and the patience of organizations to carry on with mediocre performances would be running out. It will be a rewarding experience for those who are able to deliver on the new performance code and competencies.