MANAGING & REWARDING EMPLOYEE S PERFORMANCE

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1 262 ABSTRACT MANAGING & REWARDING EMPLOYEE S PERFORMANCE S. SUBRAMANIAM* *Assistant Professor, Datta Meghe Institute of Management Studies, Rashtrasant Tukadoji Maharaj Nagpur University, SDMP Campus, Atrey Layout, Nagpur The objective of the study is know the various challenges in Managing the performance of the employees in the present competitive environment and rewarding the same for talent retention. Hypothesis Talent retention is possible only if we have a policy of rewarding the deserving employee and enhancing his living standards. Managing performance is the most difficult task since the pool of talent available is very demanding. The present employees expect a lot from the management and management expects much more from the employees. This demand has created the major problem for the management to retain talents. The question arises how to manage people and who are the people capable to get reward? The capabilities of each individual in the organization are varied and it is difficult to identify. It is difficult to satisfy all the employees at the same time so the organization should have a progressive policy so that the employee s morale is sustained. Over the years the common technique of ascertaining performance has been performance management system or performance appraisal system. There are lots of loopholes in this system which has to be identified and bettered in order to grow in the industry and survive. Performance assessment centre must be created in every organization and quarterly assessment must be done. Improvements after the assessment also should be communicated to each employee. The answer to the above referred question lies in the research that I am going to undertake. The research will study on the various assessment tactics as well the difference between expectations and demand. It will also give insights into talent retention and rewarding system to be adopted. KEYWORDS: Managing, Rewards, talent retention, competitive environment. INTRODUCTION Talent management is about ensuring that the organization attracts, retains, motivates and develops the talented people it needs. It is associated with a number of the other reward processes summarized above such as designing jobs and developing roles that give people opportunities to apply and grow their skills and provide them with autonomy, interest and challenge. It is also concerned with creating a working environment in which work processes and facilities enable rewarding (in the broadest sense) jobs and roles to be designed and developed.

2 263 Talent management also means developing reward processes and a working environment that ensure that the organization is one for which people want to work an employer of the choice. There is a desire to join the organization and, once there, to stay. Employees are committed to the organization and engaged in the work they do. Performance Management is a very important aspect on which every organization must give more concentration. Performance of people in the organization must be analysed and the capable person should be rewarded. Rewards better performance along with efficiency. The strategic aim of reward management is to develop and implement the reward policies, processes and practices required to support the achievement of the organizations business goals. The specific aims are create total reward processes that are based on beliefs about what the organization values and wants to achieve; reward people for the value they create; align reward practices with both business goals and employee values; as Duncan Brown emphasizes, the alignment of your reward practices with employee values and needs is every bit as important as alignment with business goals, and critical to the realization of the latter; reward the right things to convey the right message about what is important in terms of expected behaviors and outcomes; facilitate the attraction and retention of the skilled and competent people the organization needs, thus winning the war for talent ; help in the process of motivating people and gaining their commitment and engagement; support the development of a performance culture; develop a positive employment relationship and psychological contract. OBJECTIVES To create a system where the performance can be recorded. To create a reward system to enhance the performance. To understand the overall impact of rewards on the growth of the organization.

3 264 PERFORMANCE MANAGEMENT SYSTEM The 21 st century businesses are operating in the knowledge age. The business environment is dynamic and organizations are continuously exploring alternative strategies and policies. This is necessitating the Set the organization s goals Set departmental goals Discuss departmental goals Performance reviews Define expected results Provide feedback FIGURE PERFORMANCE MANAGEMENT SYSTEM While evaluating performance organization must follow certain procedure. The procedure planned must be easy, simple and communicable to all the employees of the organization. The performance evaluation should help the organization to achieve the following objectives Calculate the efficiency level of each employee. To match the need of the organization with the need of each employee. To confirm the overall objective of the organization. To decrease employee turnover. Increase employee loyalty.

4 265 The following steps are involved in evaluating performance of the employees of the organization- 1) Set the organization s goals The first step involves the participation of employees in setting up the organization s goals. The reason behind encouraging the employees to participate is to have a common goal rather than separate. Common goals on the part of the organization and employees will lead to a phenomenal growth rather than haphazard growth. 2) Set departmental goals Departmental goal will be set on the basis of the organisation s goal. The overall goal of the organization will help in setting the short term goals of each department. The achievement of goals of each department will help the growth of the organization. 3) Discuss departmental goals The departmental goals set up by the departmental head must be discussed with all the employees of the respective department. Communication of the objective or goals set up by the head will help in a better coordination and cooperation among the employees. 4) Define expected results The expected result from the goals set up by the head must be defined. The results should be in such a fashion so that it can be achieved. Impossible targets lead to unhappiness amongst the human resource. 5) Performance reviews Periodic review of the performance with respect to the expected results should be taken. These reviews will help the organization to understand where they stand and where they want to go. The employees will also get an opportunity to rectify there mistakes or improve there performance to achieve the objective. 6) Provide feedback Regular feedback or reviews must be communicated to each employee. Feedback if taken in a positive sense will help the organization to achieve the objective or goal. The feedback process must be taken seriously in order to show a progressive image to the stake holders. Performance management provides the key results areas as well as key performance indicators. These key performance indicator acts as a bench mark for the achievement of the overall object of the organization.

5 266 KEY RESULT AREAS Key result areas provide you with the basic requirement to achieve the goal. An organization can have several key result areas and these key results can be achieved through proper planning and foresightedness. In order to decide the key result areas it is very important for the intellectuals of the organization to sit together and come to a conclusion. KEY PERFORMANCE INDICATORS As described in the earlier figure of key result areas, it is important that before planning for the achievement of the goal we must decide on key performance indicators. Key performance indicators will decide on the achievement of key results. The performance of the group or individual in relation to the prescribed key result areas will help the organization to achieve the

6 267 overall objective. It is very important on the part of the head of the department to communicate the key performance indicator. In order to consistently do a good job, employees need a periodic feedback to fine-tune their performance. The employees need to be communicated with at regular intervals if their performance is found lacking by the management. The employees should b e told where they stand and how they can improve throughout the year and not just during the annual review when they have no opportunity to take any corrective action. Observations relating to expected improvements should be precise, accurate, unbiased and performance-specific, as they go a long way in helping people to improve. REWARD STRATEGY Once you have prepared a stringent Performance Management System you must have supportive strategies in order to achieve the overall objective of the organization. Reward strategy is a declaration of intent. It defines what an organization wants to do in the longer term to address critical reward issues and to develop and implement reward policies, practices and processes that will further the achievement of its business goals and meet the needs of its stakeholders. It starts from where the reward practices of the business are now and goes on to describe what they should become. Reward strategy provides a sense of purpose and direction, a pathway that links the needs of the business and its people with the reward policies and practices. It constitutes a framework for developing and putting into effect reward policies, practices and processes which ensure that people are rewarded for doing the things that increase the likelihood of the organization s business goals being achieved. Reward strategy is underpinned by a reward philosophy. It is concerned not only with what should be done but how it should be done, with implementation as well as planning. It is based on an understanding of the culture of the organization and an appreciation of its needs and those of its people within the context in which the organization operates. This provides the basis upon which cultural fit is achieved and needs satisfied. AIMS OF REWARD STRATEGY A key aim of reward strategy is to foster the development of a high performance culture, thus helping the organization to achieve its business goals. In the familiar phrase, reward strategy also aims to create policies and practices that will attract, retain and motivate high quality people. Moreover, it is concerned with enhancing job engagement and encouraging behaviors that deliver the required results and are in line with the organization s values. Reward strategy often has to be a balacing act, because of the potentially conflicting goals. For example, it may be necessary to reconcile the competing claims of being externally competitive and internally equitable paying a specialist more money to reflect market rate pressures may disrupt internal relativities.

7 268 STRUCTURE OF REWARD STRATEGY Reward strategies are diverse and so are the structures used by different organizations to define and present them. However, the following four heading provide some guidance on what might be included: 1. A statement of intentions The future desired state of reward and the reward initiatives that it is proposed should be taken in order to achieve it. 2. A rationale the reasons why the proposals are being made. The rationale makes out the business case for the proposals, indicating how they will meet business needs and setting out the costs and the benefits. It also refers to any people issues that need to be addressed and how the strategy will deal with them. It includes a clear statement of the objectives of the strategy and the criteria for success. 3. A definition of guiding principles the values that it is believed should be adopted in formulating and implementing the strategy. 4. A plan how, when and by whom the reward initiatives will be implemented. The plan indicates what steps have to be taken and allows for resource constraints and the need for communication, involvement and training. The priorities attached to each element of the strategy are indicated and a timetable for implementation drawn up. The plan states the person who will be responsible for the development and implementation of the strategy. CONTENT OF REWARD STRATEGY The content of reward strategy will of course vary according to the circumstances and needs of the organization. The strategy may be expressed as an overall statement of intent that simply indicates the general direction in which it is thought reward management should go in such terms are develop a high performance culture; promote a total reward policy introduce a more integrated approach to reward management encouraging continuous personal development and spelling out career opportunities; adopt a more flexible approach to reward that includes the reduction of artificial barriers as a result of over-emphasis on grading and promotion; reward people according to their contribution rather than length of time in the job; Clarify what behaviors will be rewarded and why.

8 269 INTEGRATED REWARD STRATEGIES Business Strategy To improve productivity and profitability and maintain the organizational growth HR Strategy Reward Strategy Enhance employee commitment and minimize the loss of organization Position organization as one of the best employers Develop new reward philosophy which send the right signals on corporate values and beliefs Create a new employment value proposition which makes organization an employer of choice. Introduce new store team bonus Develop family friendly benefits Introduce recognition programmes Introduce new pay and progression arrangements Provide total reward statements HORIZONTAL ALIGNMENT OF HR AND REWARD STRATEGIES HR Strategy Area Resourcing Reward strategy contribution Total reward approaches that help to make the organization a great place in which to work. Competitive pay structures that help to attract and retain high quality people Performance management Contingent pay schemes that contribute to the motivation and engagement of people Performance management processes

9 270 that promote continuous improvement and encourage people to uphold core values. Talent Management Non-financial rewards such as recognition and opportunities for growth and development policies that recognize talented people for their contribution career-linked grade and pay structure, for example a career family structure Learning and Development Performance management processes that identify learning needs and how they can be satisfied Career family structures that define career ladders in terms of knowledge and skill requirements Work environment Total reward approaches that emphasise the importance of enhancing the work environment Work life balance policies If you analyze the above figure where the HR strategy area and Reward strategy contribution is mentioned you will come to know that Talent Management is a non-financial award but it provides the major contribution toward the development of the organization. It also important to know that performance at the highest level is rewarded handsomely. CONCLUSION To conclude it can be ascertained that if we have good Performance Management and Reward strategy we can accomplish the overall objective of the organization. Strategic reward is ultimately a way of thinking that you can apply to any reward issue arising in your organization, to see how you can create value from it. It also confirms our view that reward strategy has a vital role to play as a key element in an organization s HR strategy. You cannot succeed without focusing on business goals and understanding what these mean for your core people goals. Shareholder value was our ultimate objective. But we unbundled this objective and examined how we would generate shareholder value through out reward strategy.

10 271 Performance Management is the core indicator which will lead to phenomenal growth resulting into improvement in goodwill of the organization. As John Ruskin says, The highest reward for a man's toil is not what he gets for it but what he becomes by it. Note This article is my own experience and thinking, I have not referred any article, magazine, newspaper, web or any other material.