What were motivational tools a decade back are now hygiene factors. Appreciation letter from the Managing Director, one-time ad-hoc bonus of INR 25000, out-of-turn promotion, publishing personal details in the in-house magazine, special jump in compensation, etc. have become too routine and rather unproductive. Such rewards have now become almost obsolete or have moved down from the managerial hierarchy to the supervisory or blue-collar hierarchy.
What is pushing the new philosophy of reward? Three factors stand out.
One, and accelerated change in the workforce demographics including changing expectations of older horses. Two, chronic need for retaining the performers, and the third, faster erosion of the perceived value of the reward.
If one goes with the trend, how would rewards for star performers look like in future?
For the Junior Management (up to 9-10 years of service), the rewards could include an unlimited GB data plan for personal use for a year or sponsorship of marriage expenses pegged at 50% of the annual compensation. Another option for this category would be a fully paid sabbatical for pursuing full-time education of choice. Sponsoring an all-bachelor group’s two weeks Europe tour is a fabulous idea and could be a perfect testimonial of the pinnacle performance.
This group being young has interest in sports and adventures. Then why not give them formal training and even consider sponsoring deserving ones for advance training in adventure sports? The company can analyse the hobbies & passions of star performers and offer matching rewards. If an employee likes old Hindi songs, the company can set up a meeting with the leading vocalist of his choice or gift him a Bose Audio System with complete set of the singer’s recordings. If an employee likes tennis, then how about a fully paid trip to a grand slam tournament of her choice? Imagine the impact if the reward is to shadow a board member for seven days.
This group brings energy, aggression, flexibility, and above all, passion. Of course, the attrition rate is the highest in this lot, but then the moot point would be to maximize the output while working on retention.
What would then the Middle Management (10 to 17 years of service) fancy as rewards? Annual sponsorship for a child’s education, foreign tour with family (including parents), all paid interior design of the house, subscription to an internationally acclaimed domain magazine, paid up wealth-management advisory services, and an exceptional bonus to prepay the housing loan up to half the annual CTC. This lot would be typically in 30s or early 40s and hence might even want sponsorship of a leading gymnasium for fitness & health management. This group too might like to have excursion trips or adventure sports training.
Employees in this group are more stable than the younger ones. However, the challenge for the HR people here is to offer ‘renovation’ opportunities. As knowledge fads faster than ever, this lot would certainly be pleased if offered advance training for managerial or leadership development at a premier management school (of course within the given domain) with a cap on the expenses at one month’s gross compensation. A reward that has an impact on the near-future career is always more valuable.
The Senior Management (18 & above years of service) is the most sensitive lot of the troika, simply because it carries the rich experiential knowledge of the business, domain, and the environment. Retention here has more to do with the job content and personal treatment. Monetary needs are no longer relevant for this lot. It is the most difficult group in terms of understanding what rewards would members like to receive.
The primary need for this lot is (public) recognition and opportunities for crossing the new bridge. Therefore, the approach for this lot would have to be personalized. Representing the company in international conferences, being nominated on the academic council of a leading management school, spending 3 months a year in the company’s CSR domain, retreating for spiritual purposes, are a few examples of rewards that could suit this group. It would not be wrong even to seek inputs from the lead performers on what type of reward they would prefer i.e. give them a bouquet of rewards to choose from.
To end, I recommend an employee survey on the effectiveness of the current rewards and for obtaining employees’ inputs on which could be dropped & what new categories could be introduced.