Work well, get reward points from your employers

An employee at Godrej Industries has just received an alert through his intranet mail, saying he has received an e-certificate from his superior for completion of his target before time.

He just needs to get a printout of this certificate and exchange it for reward points, which can be redeemed for gifts. The gifts include Godrej products and other items.

Godrej Industries and its allied companies have a policy of giving reward points to employees.

The employees are referred by a superior, based on their performance/behaviour. The company has been doing it to encourage the best performing employees through gifts, apart from cash incentives.

Human resource (HR) initiatives in Indian firms are beginning to think beyond compensation, according to Vivek Nath, MD, Towers Watson.

This is because corporates are reluctant to pay the high price of attracting and retaining talent, especially the high performing employees.

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"As compensation programs start to look unsustainable, more and more companies are expanding their HR related communication beyond compensation. The current agenda for HR heads is to reduce the focus on direct compensation, while raising the profile of other HR programmes and initiatives that make them more attractive as an employer," he said.

Rewards refer to the other parts of compensation besides the salary that may include incentives like stock options, performance based increments, reward points that can be redeemed for gifts and training-mentoring programmes by companies.

Surabhi Mathur Gandhi of Team Lease agrees. She said among the banking, financial services, insurance, telecom and retail sectors, offering reward points for the sales workforce has been happening for some time.

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"The reward points are linked to their performance, and a set of reward points can be exchanged for a gift. Another interesting aspect we have noticed is in addition to the monetary bonus, many of mid-sized IT companies are giving points for internal referrals that can be redeemed for gifts, making it much more attractive for employers. This is being done to reduce monetary payout," says Gandhi.

Take MphasiS, for instance. They keep having referral campaigns, time and again, for internal referrals. The company had a programme, some time ago, where an employee was given an iPod for referring a certain number of people. The gift was given after the people referred by the individual were hired.

Training and mentoring programmes are other non-cash initiatives used by HR heads, who want to create value for employees without compromising on the financials.

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"The big change we are seeing is that companies are increasingly looking at entry level hiring and 'promote from within' talent approaches in order to stabilise their wage costs," Nath added. He said this trend applied to the large and mid-size firms across sectors.

According to him, at the junior management level, there would be a mix of increments and career development/training programs that would be used to attract and retain talent.

Nath explained that companies have been able to properly identify their key performers and strategically significant talent, and will look at both bonuses and increments as a means of differentiation within their organisations and be more discerning with their rewards strategy.

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Firms like Tower Watson are helping companies get this equation right between the cash and non-cash aspects of compensation. Nath believes that an over-emphasis on either may prove disastrous.

"Our focus with our clients currently is to help them develop a Total Rewards Optimisation framework, so that HR budgets are optimally utilised through reducing the gap between employee's needs and wants and the organisations' costs.

This framework also helps companies identify and segment their employees in a manner that will help them determine who gets what and how much," he said.