A Appraisal and Rewards

8/9/2019 A Appraisal and Rewards

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APPRAISAL AND REWARD

BT TRACK PRESENTATION

GROUP - 5


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PRESENTATION ITINERARY

INTRODUCTION

PRODUCTIVITY-FOCUSSED APPRAISAL

POTENTIAL-FOCUSSED APPRAISAL TEAM-BASED APPRAISAL

INCENTIVE-BASED APPRAISAL

APPRAISAL AND REWARD TECHNIQUES


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NEED FOR APPRAISAL & REWARD

SYSTEMS

ATTRACTING & RETAINING BEST TALENT

BOOSTING THE MORALE-MOTIVATIONAL TOOL

CREATING COMPETITIVE ENVIRONMENT FOR BETTERPERFORMANCE

PERMEATING A HEALTHY ORGANISATIONAL CULTURE

IMPORTANT FOR SUSTENANCE OF FLATTER STRUCTURES


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PRODUCTIVITY-FOCUSSED APPRAISAL

NEED FOR WELL-DEFINED OBJECTIVES

SHOPFLOOR WORKERS PRODUCTIVITY

MANAGERIAL PRODUCTIVITY- NOT TARGET-BASED

EMPHASIS ON BOTH MEANS AND ENDS

EVALUATION INVOLVES SUBJECTIVITY-

Self evaluation by employees

Assessment by heads of the employees

BENCHMARKS TO MEASURE PRODUCTIVITY- RECKITT & COLMAN,AMTREX, HINDUJA FINANCE


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RECKITT MODEL

Organizational objectives are set

Broken into functional objectives

Broken into individual objectives

Key result areas (KRAs) are identified

KRAs are broken into activities with pre-set performance levels

Productivity is measured and periodic and final assessments are done

Performance-review and development document is

generated and acts as basis for annual increment


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PARAMETERS FOR EVALUATING

MANAGERIAL PRODUCTIVITY

SUPPLY CHAIN

CUSTOMER SERVICE

INTERACTION

INNOVATION

FINANCE

HUMAN RESOURCE DEVELOPMENT


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BEST PRACTICES TO MEASURE

PRODUCTIVITY

ARTICULATION OF BUSINESS, FUNCTIONAL,DEPARTMENTAL AND INDIVIDUAL OBJECTIVES

GRADATION OF EMPLOYEES ON OBJECTIVE AND

TRANSPARENT PRODUCTIVITY PARAMETERS

CREATION OF A SELF-APPRAISAL FOLLOWED BYSUPERVISORY AND TEAM APPRAISALS

ESTABLISHMENT OF A CLEAR LINK BETWEENREWARDS AND PRODUCTIVITY TO INCREASEMOTIVATION LEVELS

MAKE EMPLOYEES FULLY AWARE ABOUT THEPARAMETERS USED TO EVALUATE THEIR

PRODUCTIVITY


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POTENTIAL-FOCUSSED APPRAISAL

Integral part of management developmentprocess and career planning

Subjective, non-quantitative approach

Focus on future rather than past performance

Essential for grooming future leaders


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GENERIC COMPETENCES

Job Knowledge

Thinking Clearly

Goal-setting & planning Relationships

Leadership

Innovation


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PSYCHOMETRIC TESTS

Personality tests to capture abilities suchas logic, aptitude, deduction and inference

Attribute appraisal:Attitude

Accountability

Commitment

Initiative

Leadership

Ethics


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POTENTIAL-FOCUSSED APPRAISAL

PROBLEM

CHILDRENSTARS

?PLANNEDSEPERATION

SOLIDCITIZENS

PO

T

E

N

T

IA

L

HIGH

LOW

PERFORMANCE

HIGH

THE PHILIPS MODEL

LOW


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POTENTIAL-FOCUSSED APPRAISAL CRITERIA

CONCEPTUAL

EFFECTIVENESS

VISION

BUSINESS ORIENTATION

ENTREPRENEURIALORIENTATION

SENSE OF REALITY

INTERPERSONAL

EFFECTIVENESS

NETWORK

DIRECTEDNESS

NEGOTIATING POWER

PERSONAL INFLUENCE

VERBAL BEHAVIOUR

OPERATIONAL

EFFECTIVENESS

RESULT ORIENTED

EFFECTIVENESS

RISK-TAKING

CONTROL

ACHIEVEMENT

MOTIVATION

DRIVE

PROFESSIONAL

AMBITION

INNOVATIVENESS

STABILITY


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BEST PRACTICES TO MEASURE

POTENTIAL

Separation of reward for potential fromreward for past performance

Evaluation and identification of pastperformance

Transparency of evaluation and appraisalprocedures

Communication of potential assessment toeach individual at regular intervals


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TEAM BASED APPRAISAL

Appraisal system that splits employeecompensation between companystandards, individual merit & team

performance

Along with team rewards, members havetheir annual bonus pegged to performance

Individual reward systems are also presentto retain star performers


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REWARD PROCEDUREDefine min. performance benchmark for team reward

Make team performance mandatory for individual rewards

Award in proportion to basic pay of team member

Geometric rate of progression for each successive stretch target

Award linked to basic pay of the grade of the individual


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BEST PRACTICES

Setting quantifiable targets when evaluating teamperformance

Highest level of rewards earned by top performers

Link-up of team performance with companys profitsand financial health

Avoiding subjectivity when evaluating performance

Offering uniform non-team based increments to

employees within each grade


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INCENTIVE BASED APPRAISAL

Mainly to boost performance

No graded salary structure

Shop floor incentives Performance index-SMH/(AMH-(Idle Time + Learning))

Productivity index-SMH/(AMH - Learning)

Managerial incentives Individual objectives

Business objectives


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INCENTIVE BASED APPRAISAL

BOARD

Performance targets Productivity targets

Productivity index(eligibility: 75%)

Performance index

(eligibility: 60%)

Performance bonus

(celing:130%)

Productivity bonus

(ceiling: 120%)

Individual /group

incentive

THE SIEMENS MODEL


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BEST PRACTICES

Deployment of incentive pay systems for managersand workers at all levels

Transparency of principles and workings

Periodic review of specific objectives for everyemployee

Incentives for performance and disincentives for non-performance

Indexation of incentive pay for workers to customersatisfaction


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VARIOUS TECHNIQUES

360 Degree technique

Assessment Centre technique

Non-Monetary technique Stock Option technique


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360 Degree technique

Evaluation of a managers approach towork

Evaluation of quality of interaction withcolleagues

Method of application: Administerstructured questionnaire to colleagues

Parameters: Performance, behavior,effectiveness, communication anddelegation skills, administrative skills,values, ethics, etc.


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MERITS

Evaluation methods applied to achieve targets

Reveals strengths and weaknesses in managing style

Forces inflexible managers to initiate self-change

Creates an atmosphere of teamwork andempowerment

Unearths truths about organisation culture andambience


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DEMERITS

Ignores performance in terms of reachinggoals

Colleagues responses tend to be biased

Assessees deny the truth of negativefeedback

The system can be utilized to humiliatepeople

Linking findings to rewards can prove tobe unfair


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360o v/s Other Appraisal Systems

360o lays emphasis on road taken whileothers judge outcome of managers efforts

Focus on intrinsic qualities and not just onachievements like in normal systems

Teamwork will thrive as assessment by

peers is embedded in system fabric

Bridges the gap between self-assessmentand colleagues views


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ASSESSMENT CENTRE TECHNIQUE

Intensive laboratory of tests toevaluate functional expertise,

aptitude and skills Isolation of individual at an

assessment centre and evaluate onbasis of games of skills and

interview Primarily designed to identify

managerial fits for higher posts


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MERITS

Provides detailed picture of highperformers potential

Ensures that wrong people are notelevated

Facilitates inter-cadre promotion

Identifies talented individuals

Defines the criteria for promotion


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DEMERITS

Creates a strong and unhealthy sense ofcompetition

Frustrates those who fail to pass the tests

Not possible to be conducted frequently

Test performance may sometimes be

overemphasized

Promotions assume extraordinary importanceamong employees


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NON MONETARY REWARD

TECHNIQUES

Method to increase Employee participationand Employee satisfaction

Use of rewards, awards, and other benefitsfor both employees and their families

Started in 1980s by American corporates

Recognition is the driving force nowadays


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NEED FOR NON-MONETARY

REWARDS

For creating more value, companyinstitutionalized non-monetary methods,rewards, and recognition system

Used as a Motivational tool

Recognition and Rewards-

o creates positive work cultureo Encourages to deliver quality

o Creates personal challenges

o Effective way of building loyalty

o Inspires to give their best


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TYPES OF NON MONETARY

REWARDS

Treats Free lunches, Picnics, Bday treats

Knick-Knacks- Desk accessories, T-shirts

Awards- Trophies, Certificates

Social Acknowledgement- Informalrecognition, Recreation clubs membership

Office Environment- Flexible hours

Tokens- Vacation trips, Allowances

On the job- More responsibility, Training


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MERITS

Motivates employees to perform better

Costs your organization next to nothing

Builds tremendous self-esteem among

people Makes employees more loyal to company

Creates an atmosphere where changer isnot resented


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DEMERITS

Demotivates if process is not transparent

Could result in unhealthy competition amongpeople

May lead to short-sighted, hasty decision making

Work intrudes on the home life of employees

Will never work if monetary rewards are

inadequate


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EMPLOYEE STOCK OPTIONS

Hottest Pay for performance tool nowadays

Offered to management as executive compensation

package

The technique links managers reward to efficiency

Offer certain shares at todays price and have benefit froman increase in the value of the stocks in future

The stocks price will go up depends on his performance


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Need of ESOs

Motivation booster directly links performance tomarketplace

Benefit to employee like other investors

A performance Enhancer

Bonus or Perks

Is often a call option


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Stock Option Contract

Strike price is non-standardized

Non-standardized quantity (varies)

Duration, maturity period (Varies) Non-transferable

Over the counter (private contract)

Tax issues


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Trading Phenomenon

The Transnational Formula

Foreign trading is done bycompany on employee behalf

The Indian Equation

-offer shares from the promoters holdings

-Preferential issue of new shares

Option Trading also done byunlisted companies


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MERITS

Links compensation package closely to performance

Offers a way for you to retain your best employees

Motivates recipients to perform even better

Inculcates a sense of ownership and responsibility

Establishes importance of team effort among employees


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DEMERITS

Only profitable companies can use the tool

Stock prices do not always reflect fundamentals

Falling share price could mean losses foremployees

The inability to cash in quickly can dampeninterest

Lack of transparency can earn accusations of

favoritism


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FUTURE.

Maturity period needs to be decided

To see only deserving gets theopportunity

Translate ESOs into efforts

Survival in strict environment


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Documents

A Appraisal and Rewards