Performance and rewards: The way forward
COVID-19 has impacted the way we work and it has also forced us to change our style of working, the way we communicate, the way we perceive things, and many more. In the last six months we were expecting to see the curve going flat but simultaneously we were also working on plan b for our workforce. Undoubtedly it has highlighted the flaws in us and pushed many of us to rethink fundamental concepts such as when and how work is done or assessed. Over the past months, we have seen companies laying off their employees, some of them reducing work hours, holding bonuses, pay cuts have become normal.
On the other hand, the last six months have also been the time of performances and rewards for employees and companies had a hard time walking that lane. Rarest of rare companies awarded their employees with rewards and recognition. Most of the companies are still working out to find the strategy of total rewards during the new normal.
When asked, Ashley Goodall, SVP, Methods & Intelligence, Cisco about defining the new frontiers of performance management?
He replied, Firstly, it will not contain ratings. Many performance management approaches do not contain ratings today. We know that ratings are bad data, and we know that the process of manufacturing ratings wastes a lot of time that could be put to much better use at work. Secondly, the fundamental currency of a performance management system should be frequent attention to humans in our teams. We know that this is the most powerful thing to actually lift levels of performance over time. And the point of performance management, of course, is not to categorize performance as much as it is to enhance and increase it over time.
He also highlighted that the best way to measure what a team leader thinks of somebody on their team is not to have them attach a rating to that person but to describe how they would invest in them. And so, the performance management system of the future will have some way of understanding which investments we decided to make in people—who did we decide to move, who did we decide to promote, who did we decide to give a stretch assignment to—and ask which of those decisions we followed through on, and then use those as a gauge of what our team leaders actually think about their team members.
Well, the changes that were brought in by COVID-19 are permeating far beyond the peak of the contagion. As companies navigate these uncharted waters, they are dealing simultaneously with immediate measures for employee wellbeing and business continuity as well as starting to plan what normalcy or rebound to growth for their employees and business would look like. Organizations that will embrace empathy with economics while rebalancing their priorities would emerge as true leaders.
According to industry experts, one of the key aspects that employers need to consider is their short term plans. This plan will focus on instant employee rewards and workforce compensation changes to bring the business back online if it has been closed due to the COVID-19 virus pandemic or to bring employees back into the business.
Revisiting the incentive plan
It is also possible that some companies will pay out much smaller, or potentially even no bonuses or merit increases this year. In order to retain and engage top performers, organizations should develop a contingency plan now to address whether across-the-board merit increases, as well as the bonus pool, should be reduced in order to reward those high-impact employees.
With total rewards revolving around on compensation, benefits, and, more recently, career development and recognition. With the recently demonstrated success of remote work, organizations are realizing that work location is also an important consideration, possibly on par with these other elements of the total rewards matrix. This is an important evolution, as it means companies have another powerful new lever to use in driving their talent strategy. Companies that recognize this and thoughtfully invoke work location in their employee value proposition could significantly multiple benefits.