Beyond Efforts, Beyond Results, Beyond Recognition

The Greater the time difference between performance and reward, the less is its value
Abstract:
The system of rewarding the performances has been inherited from long back in days of
Mahabharata when the greatest soldiers were rewarded with gold ingots or knick-knacks, or get
an extraordinary place in the kings assembly, when they returned from states of war. The best
performer in the swayamvara gets wedded with the fine-looking princess! The concept is still the
same, only the approach today has become more quantitative. At its nucleus, performance
management is designed to fairly and accurately assess how well people do their work, provide
feedback to help them improve, identify goals and objectives for future performance, and tie the
overall evaluation to some valued consequence, such as a pay increase, bonus, promotion, or
some other form of recognition. People perform well and are motivated by both fundamental and
extrinsic rewards. To be successful, the reward structure must make out both sources of
motivation. Almost all reward systems target the three essentials of any business attracting,
retaining and motivating the best talent available on board.
If you pick the right people and give them the opportunity to spread their wings and put
recognition as a carrier behind it you almost dont have to manage them Jack Welch
Not Just Money: An Introduction to

factors that encourage

employees

and

Performance Rewards

influence the ir level of performance. In fact,

For a country like India, out of all, financial

quite a lot of studies have set up that among

rewards have always been a vital constituent

employees surveyed, money was NOT the

of the reward system, but there are other

most central motivator, and in several

1

instances managers have found money to

listing is not very comprehensive, and

have a DEMOTIVATING or negative effect

individual units/departments possibly will

on employees.

have to make out further mechanisms that

are appropriate for and sustain their culture

To make certain that the reward system is

and goals.

in- line with the business goals and motivates

the preferred behaviors in employees, it is

Satisfaction Surveys identify lack of

essential to consider carefully the rewards

recognition

and strategies utilized and ensure the

In a client employee satisfaction survey, the

rewards

on

question about whether the company cared

any

about the welfare and happiness of its

performance measurement system must be

employees drew divergent views. Some

attached to the monthly compensation or

people agreed; others disagreed.

some

Rewarding

So, the Culture and Communications team

continuing

put out a second survey asking what would

managerial activity, not just an annual pay-

make the employees feel as if the company

linked ritual.

cared about them. We developed several

are

linked

performance.

To

genus

performance

to
be

of

or

effective,

reward.

must

be

based

answers
Strategies
performance

for
and

rewarding

employees

contributions

to

the

employees

could

check

and

supplied room for their comments and

additional thoughts.

business objectives include non- monetary

Fifty- five percent of the respondents said

and monetary mechanisms. We have tried to

that

put in few strategies in this write- up. The

supervisor would make them feel as if the

praise

and

attention

from

their

company cared about them and their well-

smile, resembling the dude in the leading

being. As you might also expect, money,

motorbike TV commercial.

benefits, and events such as company

Couldn't believe, right? Well, this is the

lunches ranked high, too. But recognition

familiar story in corporations all the time.

from the supervisor ranked above all other

choices.

This is what happens when the performance

I have sponsored similar surveys in different

appraisal process is not in line with the

organizations. The findings are always

business goals and mission. Employees are

similar. Employees want to know that they

evaluated based on subjective and pointless

have done a good job and that you noticed.

standards because nobody has defined the

Employees

proper benchmarks. Marketing guys are

want

to

be

thanked

and

appreciated.

acknowledged by marketing managers for

bells and whistles and are praised for

Performance

Management

linked

to

creativity,

not

articulacy

or

internal

business goals

customer satisfaction. HR employees get de-

Just visualize this: you join the Indian

rated if company attrition is skyrocketing, as

cricket team, and have a grand year. Your

if the HR chaps are liable to make people

team wins the title match, and you are in the

from production or quality departments to

running for Man of the Match. But, the

go away. Quality Systems people are

judges summon and award the Man of the

rewarded for the big binder of strategic

Match to a bighead and ball- hog on the

recommendations for business, not the

worst team in the league. The justification:

accomplishment of the projects. When

the ball- hog has fine long hair and dimply

performance appraisal fails to make the

3

organization efficient, that entire physical,

You must be surprised to know, but strategic

mental,

drains

vision is illustrious for in no way getting

employees and generates a negative feeling

implemented! We have seen companies

in general.

putting further exertion into new names and

and

emotional

attempt

new logos than into actual change. The

We need to further analyze that in a

system that bogs down change most

developing country like India, why does

freque ntly is performance management, by

performance management so much stand to

limiting discussion and deliberation to the

other side from organizational line of attack?

past and present, and ignoring the future. It's

easy to talk about what you needed to do

Performance management systems are by

yesterday. It's much harder to guess what

now in position in more or less entire

you'll need to do tomorrow.

corporate world. They may be unproductive,

but employment statutes mandate them. Fear

Thrust Employee appreciation up a mile

of union grievance fills many personnel

Employee

records with worthless formalities and

considered as vital in most organizations.

paperwork. Even if the organizations have

Employees grumble about the lack of

evidently defined mission, time and again

recognition repeatedly. Senior management

they don't communicate this

their

is so engaged in daily work that they often

employees nor do they believe on those

ask, Why should I recognize or thank him?

missions

Hes just doing his KRA. Such incidental

to

recognition

is

not

being

factors combine to create work places that

fail to provide recognition for employees
4

and this goes on to build up dis-grunted

A person in charge of employees makes

mindsets and finally the separation.

other

people

feel

imperative

and

appreciated. The leader excels at creating

Senior managers who prioritize employee

opportunities

recognition

of

recognition and thanks to his team. A leader

recognition. They know that employee

creates a work atmosphere in which people

recognition is not just a pleasant thing to do

feel important and appreciated.

understand

the

power

to

endow

with rewards,

for people. Employee recognition is a

communication tool that reinforces and

Dont just go adopting best practices: The

rewards the most important outcomes people

saga

create for your business.

monitoring

of

360

degree

performance

Formalized performance assessments are

When you recognize people efficiently, you

important for several reasons. Performance

strengthen, with your selected means of

reviews are one

recognition, the actions and behaviors you

benchmarks for employees work area. In

most want to see people go over.

the era of chaotic work environments, these

An effective employee recognition system is

reviews provide for a prearranged time to

simple,

pause,

immediate,

and

powerfully

plan

goals,

way of

and

establishing

set

concrete

reinforcing. Employees feel cared about and

guidelines that the employee will be judged

appreciated. It may seem simplistic, but

against in terms of deciding grade hikes,

people who feel recognized and cared about

salary hikes, and his or her yearly training

produce more and better work.

needs. Organisation can accomplish this

without including the employee in the
5

process, but that is to close the eyes to the

ease with

employee side of the equation, and thus

organization. Ensure that the administrator

performance

gathering

reviews

make

time

for

and

the

that

data

works

from

for

the

your

various

employee participation. This is NOT the

reviewers is sensitive to the concerns of the

time for the employer not to tell the

employee being reviewed and treats all

employee what he/she did right or wrong,

information

accordingly

rather, it is time to discuss with them various

quantitative

weightage

aspects of his/her key responsibilities.

mutual discussions between the reviewer

Employees like to be heard by management

and reviewee, persona l issues, etc.).

and

with

(anchored

the
with

and this is the guarantee that, no issue how

hectic or practical the organization might be,

For corporations with long-established top-

there must be specific time allotted for their

down structures, implementing 360 degree

input.

systems can be somewhat thornier. The

employees in such cultures with their set

Now actually what is this 360 degree

inertia are inherently going to be rougher

review? The concept is to improve team

with the proposal of co-workers, rather than

functionality from diversified perspectives -

their

supervisor, subordinate, associate, in- house

performance review. Moreover, others might

contact, outside contact, and of course, the

not be in a situation to do a sufficient

customer. It is best, on the other hand, to

assessment

gradually put such systems into operation.

information flow. In these situations, 360

Begin with two or three reviewers and work

degree systems can be used as an instrument

your gradient to a number that you are at

to open the lines of communication within

direct

supervisor,

because

of

conducting

the

narrow

the company. But it is absolutely essential to

to

multilevel

interfaces,

start little by little to build the self-

performance judged by all these people,

confidence of the employees in the system.

especially

If you decide against a 360 degree system

discomfort.

subordinates

having

your

may

cause

companies

give

for this type of setting, definitely stick with

some kind of a formal performance review

Some

incidents

from

process - even if it means the old supervisor-

dimension on why 360 degree feedback can

only review standby.

be a negative, even when the basic concept,

getting feedback on managers from all

Its

true

emphasize

that

for

organizations

multidirectional

environments,

360

degree

and

that

sources, seems so sound. In one company

team

most of the managers loathed the practice,

feedback

and

resisted

cooperating.

For

some

performance review systems are great. But if

managers meeting with their subordinates

you go in deep research work, like we did at

and discussing what the boss needed to

SONA Koyo before implementing this

improve was too alien and frightening a

colossal system, you will be shocked! A

concept. For others, there was insufficient

recent study about HR practices, the Watson

training in how to use the process, thus

Wyatt Human Capital Index study, found

dooming it from the beginning.

that 360 degree feedback can be counterproductive in some situations. In fact, the

One manager in a large Wall Street bank had

study concluded, the practice might produce

nothing but contempt for the process,

negative returns for shareholders. Even in a

particularly the part relating to peer review:

work culture where people are accustomed

"Once a year we have to go around and ask

7

somebody for a peer review. It's either screw

Rewards need to be SMART - Specific-

your buddy or kiss up to them. Nobody

Measurable-Achievable-Time

picks someone they are not tight with. The

Realistic

whole process is ridiculous".

Performance reviews play a critical role in

bound-

career development of employees, and it is

That is what Watson Wyatt has to state. But

in the best interest of the organisation to

to us at SONA, the issue we faced was

understand how performance reviews work,

whether 360 degree feedbacks should be

how to prepare for a review, what to do and

part of the salary equation. One answer was

say during the review, and how to follow up

to the point: once you've included 360

at the salary negotiation and beyond. There

degree in the review, it's definitely related.

are ranges of ways to measure performance;

the method often depends on your company

But now we didn't get into specifics on 360

and the nature of your job. The two most

degree systems. There are many out there:

common approaches are the weightage scale

some are out of the box and inexpensive,

method and the Management for objectives

some are customized and implemented by

method. The methods use different criteria

pricey consultants, while some are created

to judge performance.

in- house. There is a plethora of choices out

there. Many are good and many are not-so-

Weightage scale method: This approach

good. Evaluate your options and make the

emphasizes

choice that is best for your particular

behaviors. An employee's performance is

organization.

rated on these characteristics and on specific

competencies,

traits,

or

items such as quality of work; quantity of

8

work; communications skills; interpersona l

What to Reward Certain Behaviors and

skills; and decision making.

Achievements that are required by an

organization to be cherished, promoted and

Management for Objectives method: We

rewarded. These need to be prioritized to be

exercise this method at SONA. This

rewarded; other things which are not in line

approach

with

measures

performance

by

comparing the business objectives set by the

organization

and

performance

objectives can be given second priority.

employer and the employees with the

results, or what was accomplished. Goals are

When to Reward It is very important to

set and prioritized by both parties at the

reward employee instantly when he achieves

beginning of the period. The review is used

the results or at least recognize his efforts;

to evaluate and record the results - whether

delivery of rewards may come later. It is not

the employee has met, exceeded, or failed to

good to reward the employee after 6 or 12

meet expectations.

months in the next appraisal cycle, it gives

no meaning or value to his achievement.

Rewards

are

no

longer

static,

nor

reactive, but adaptive

How to Reward Some like it in public,

To motivate and promote high performance,

some in private. Each one has his own

it is very important to link efficient rewards

likings about how he should be recognized

mechanism or system in the organization.

and rewarded. Cash, Stock options, Profits,

However we should know 3 golden rules of

Promotions, Relocations etc. The list could

rewarding.

be endless

Write out the recognition, what the

spent, you want the employee to

employee did, why it was important, and

remember the recognition.

how

the

actions

served

your

organization. Give a copy of the letter to

employee meeting, for example. Even if

the employee and to the department head

the employee is uncomfortable with

or CEO, depending on the size of your

publicity, it is important for the other

company.

employees to know that employees are

Place

copy

in

the

employees file.

Present the recognition publicly, at an

receiving recognition.

Write a persona l note or e-mail to the

employee. Perhaps have your boss sign

Performance

Reward

is

self-

it, too. Photocopy the note and place the

management tool, not control mechanism

recognition in the employees file.

Exigency in job assigned Challenging

Accompany the verbal recognition with

and inspiring work assignments are the

plaques,

best instrument on hand with seniors to

merchandise that carries the company

reward good quality performance. Such

logo, even certificates of appreciation

assignments can provide employees

reinforce the employee recognition.

opportunities to expand to new skills,

Everyone likes cash or the equivalent in

subject knowledge, and boost their

gift cards, gift certificates, and checks. If

visibility inside the organization. They

you use a consumable form of employee

as well propel an important message that

recognition, accompany the cash with a

employees contributions are recognized

note or letter. When the money has been

and valued. In allowing for such

spot

gift.

Engraved

assignments, seniors

should

consult
10

employees

about

the

types

of

assignments that would be most valued,

developing

and they should also assess whether

organisation benefits from the added

workloads will need to be redistributed

proficiency individuals fetch in to the

to ensure employees have adequate time

job. At a latest survey at SONA we

to devote to new tasks.

found 87% of the fresh recruits viewed

A pat on the back Just a modest smile

individual training as an encouraging

or a pat or a little hug (which we at

incentive,

SONA call Jaadu ki Jhappi!) from

meaningful

seniors is consistently found to be

postgraduate

among the most effective motivators.

management staff.

Employees want to be recognized and

competencies. Employees benefit by

new

and

skills,

it

to

and

the

appeared

most

employees

with

education

in

junior

Of course Salary hikes too! Grant

feel their contributions are noticed and

your employees an annual merit raise to

valued. It is important that seniors

recognize

recognize the value and importance of

performance or successful achievement

sincerely thanking employees verbally

of a KRA that had a significant impact

and/or in writing for their specific

on a department or the organisation. The

contributions.

reward may be in any amount up to

consistently

meritorious

through

7.5% of the employee's current basic

adequate trainings Seniors should

salary (The figure corresponds to annual

offer employees with occasions to take

increment for FY-07 at SONA), subject

part in learning programs or other

to the budgetary constraints of your firm.

activities

Budgetary information regarding fiscal

Employee

Development

that

will

enlarge

their

11

year merit increases are issued annually

the

as part of the budget process as soon as

Promotions are typically associated with

the organisations fiscal position can be

a flat increase in salary, and the increase

determined. To be eligible for a merit

may be any amount up to 12.5% of an

increase, employees must have been

employees current basic salary.

employed for at least six continuous

Non

monetary

in

new

rewards

roles.

When

months and at least six months must

necessary, seniors may choose to give

have elapsed since the employee's last

employees informal rewards for specific

salary

accomplishments/contributions.

increase,

promotion,

salary

Some

increase due to progression in the salary

laws and institutional policies allow

range,

another

expenditures of state and non-state funds

department. Employees may receive

for employees as informal non-cash

salary

the

rewards

the

organizations

or

transfer

increases

attainment
enhancement

organisation

of

to
new

from

recognize
and/or

demonstrate
positive

the

reception.

existing

Seniors can be creative in identifying

skills/competencies or for assuming

informal rewards that will be appreciated

increased responsibilities within the

by

scope of the current position.

recognized,

Grade elevations and lateral moves -

purchasing rewards, seniors must be

Promotions and sideways movements

sensitive to the organisations cost

are long term rewards that recognize

constraints.

employees

of

that

professional

the

particular
but,

individual
in

selecting

being
and

growth,

knowledge, and ability to contribute to

12

Case Example: Performance management

at SONA KOYO Steering Systems Ltd

Recognition has to consistently fair

across

organizational

boundaries,

functions and culture

The greater the time lag between

performance and reward, the less is
its value

Like fine wine, employees get better

with age and performance. Reward suc h

SONA sponsored National HRM Summit on

Performance Related Rewards Innovative
Approaches at AIMA, Pune

employees
We believe in Carkhuffs equation for

Performance as seen at SONA

Incentives and Rewards are a waste on
money, unless they are aligned to the
strategic objectives.
The key beliefs are:

Organization needs to be exceptional at

human productivity, i.e.

Productivity = Responsiveness+ Initiative+
Processing
Excellence is not a skill. Its is an attitude
Efficacy = Efficiency + Effectiveness

recognizing employees in ways they

value

capacity or power to produce a desired

effect

the ratio of the output to the input of

Recognition is a key driver for optimum

any system
performance

Ability to achieve stated goals or

Reward programs have to be proactive,

objectives, judged in terms of both
not reactive
output and impact

13

Performance management as concept

the entire organization starting from Top

It is Futuristic, i.e. how to plan, strategize,

Management, to Business Groups level,

organize, ensure and extract the desired

Business Unit level, Department level, Team

performance in the coming year or in near

Level and finally scaling down to Individual

future. Performance Management consists of

levels. SONAs performance goal is defined

following components.

in terms of business strategies i.e. increasing

market share from 15 to 20%, or increasing

SONAs performance policy

revenue limits from 20 crore to 27 crore, or

Right Policy Framework is also a key to

increasing sales from 7 lacs units to 9.6 lacs

understand

performance

units, increasing current clientele from 33

philosophy, performance expectations and

clients to 47 clients in the next year, or

the manner in which performance has to be

improving organizational productivity from

delivered.

x level to y level etc. It can be anything that

Management

SONAs

detailed

Policy

is

Performance
which

goes with organizations business strategies

outlines SONAs performance framework,

or goals. These expectations and plans can

measurement

assessment

be further cascaded to department level,

methodologies, rewarding and awarding

business unit level, and individual level.

mechanisms, and performance improvement

Performance standards can be set in terms

facilities etc.

of; this year we need to expand our sales

and

defined

figures from X level to Z level, our brand

Performance benchmarking at SONA

equity in the ind ustry needs to move from A

It starts from Performance Benchmarking.

level to B level, to increase our market

SONA has set clear performance goals for

leadership, sustainability in the industry,

14

improve our core competencies and increase

converting it into qualitative terms which is

our competitiveness etc.

as follows
The

combined

weightage

Responsibility

SONAs PMS Policy defines very clearly

Objectives (Section II) equals 80% of the

what are the areas, factors that reflect

employees

benchmarked Performance, i.e. what are the

Weightage of each section depends on the

Key Performance Indicators, or Key Result

employee category. Performance Factors

Areas, which show performance to be

(Section III) is weighed at 30 % for Unit

achieved.

heads and 20% for all employees.

indicators

are

clearly

total

(Section

Key

Performance indicators

These

Areas

of

performance

I)

and

rating.

explained to each department, team and

individual so everybody sees clearly what
needs to be done and finished.

Category

Performance Planning
Once

we

identify

requirements

Weightage criteria:

of

Section I

Unit Heads
Division Head
Department
Heads
Section Heads
Seniors

20%
35%
40%

Section
II
50%
45%
40%

Section
III
30%
20%
20%

45%
50%

35%
30%

20%
20%

Rating schedule
performance, SONA plans performance
Use the following scale to rate the results
extraction in terms of the following.
achieved in Key Responsibilities (Section I),
The rating will be done on a total of 100
Objectives (Section II) and Performance
point scale. Each characteristic will be
Factors (Section III).
allotted certain points. Accordingly the
Ratings definitions
rating

will

be

further

simplified

by

15

3 = Exceeds Expectations - Consistently and

structure each job profile in each function

significantly

above

(technical, frontline, operational, support

Demonstrated

extra

all

expectations.
Key

functions) that enables the job holder to give

or

expected results as per KRAs. Further

performance factors, even when faced with

clarify transparently division of labor where

(most) significant challenges.

each employee has enough workload (avoid

2 = Meets Expectations - Fully met, and

overloading or under loading) so that

occasionally exceeded expectations (set for

performance

Managing Points, objective and / or

stretched.

performance factors).

engagement is required.

Responsibilities,

mastery

objective

of

and

doesnt
High

get

level

stressed
of

and

employee

1 = Below Expectations - Did not meet basic

expectations,

lacked

requirements

for

Also performance extraction can be phased

achieving Key Responsibilities, objective

out to simplify the delivery of results where

and / or performance factors.

say in a first quarter we should be able to

Overall rating criteria

achieve X, in second quarter Y and in the

Outstanding

280 300

Good

250 279

Adequate

249 and below

last two quarters Z,A,B,C etc.

Conclusion
Identify and understand if current job

A simple thank you counts as employee

profiles, roles are consistent to extract

recognition. But, you can also make

desired performance. If there is any role

employee recognition as elaborate as your

conflict or need to realign or redefine certain

imagination can conceive. Recognition is

job profiles or positions, do the rework and

not a scarce resource. You cant use it up or

16

run out of it. No budget is too small to

afford employee recognition. For increased
employee satisfaction, bring on lots of
employee recognition.

References
Web
site
www.haripassionhr.com,
www.watsonwyatt.com
The HR Scorecard: Linking People,
Strategy, and Performance by Brian E.
Becker, Mark A. Huselid, Dave Ulrich

Performance Management: A Business

Process Benchmarking Approach by
Asbjorn Rolstadas 1995
Powering up Performance Management: An
integrated approach to getting best out of
your people by Richard Hale, Peter Whitlam
2000
Abolishing Performance Appraisals: Why
They Backfire and What to Do Instead by
Tom Coens, Mary Jenkins, Peter Block
The Performance Appraisal Question and
Answer Book: A Survival Guide for
Managers by Richard C. Grote, Dick Grote

A
Critical
Look
at
Performance
Management Systems - Why Don't They
Work by Robert Bacal
Performance Management: Key Strategies
and Practical Guidelines by Michael
Armstrong 2000

17

The Author
MR. HARI NAIR, a young Masters in Public, Personnel Management &
Industrial Relations from Osmania University, did his Graduation in
Commerce and has a Degree in Education Psychology & a Diploma in
Journalism. Currently he is at the helm of affairs at Sona Koyo Steering
Systems Ltd, Gurgaon as its Vice President Human Resources, and can be
reached by e-mail hari.nair@sonagroup.com or hari.nair69@gmail.com and
on his Mobile No. +91-98-102-89047

18