The enterprise is fast undergoing changes. And these changes are being brought forth by the increasing population of Gen Y in the mainstream workforce. There was a time when an employee would look forward to the annual increment with the hope and expectation that could justify an entire year’s worth of hard work and effort. On top of that, a ‘Diwali bonus’ or a ‘mid-year performance incentive’ would be just the kind of thing that would make an employee married to the company for life. And, of course, the real impact in engagement would happen around March when the annual increments would be announced. To an employee, a reward meant a culmination of the year’s work in the form of an annual increment. So much has changed since those times, and so quickly!
An increasing number of research studies indicate that enterprise employees consider annual increments less rewarding. Rewards, lately, have come to indicate much more than monetary increment in salary. Great Places to Work® published a research among Indian companies indicating that successful rewards and recognition (R&R) programs are predicated on aspects of fairness, besides frequent, inclusive and heartfelt appreciation. The days of the annual increments to engage and retain employees are over.
According to various research studies, the top three reward trends in India are as follows.
Big-bang payouts. Big-bang, sensational payouts are valued more by Indian employees than an annual increment of the same value. The market is seeing new benchmarks set in India every month. Very recently, Infosys sent its top performers an iPhone 6 each with a letter personally signed by the CEO, Vishal Sikka. HCL hit the roof by doling out Mercedes cars and international vacations to its key people not too long ago. A diamond merchant in Surat, Gujarat made news a few months back by handing out 500 cars and two-bedroom flats to his key employees.
Medical benefits matter. Surprisingly, the enterprise of today looks at medical payouts as an important part of feeling rewarded. Accordingly, companies are taking the topic of overall health and wellness much more seriously. Walkathons and workplace redesigns are becoming increasingly mainstream.
Frequent recognition. The enterprise of today is looking for recognition in real-time. Recognition of long tenure, which was earlier an insignificant measure, has suddenly become a very important factor for driving engagement. Also, another significant factor that the modern-day enterprise values is 360-degree recognition, not just recognition from a manager or superior. Companies are, thus, putting together practices to recognise vendor, client and peer appreciations.
The space of R&R has changed, and changed drastically within a short time. Traditional models are no longer effective as the demographic composition of the workforce continues to change. The People Matters ‘Total Rewards Conclave’ on February 3, 2015 promises to bring together many leading practices in Indian organizations. We will continue to profile these leading practices in the coming weeks.