Rewards and Incentives after 2010

In a quest to give a gist of the year gone by HR heads share specific trends that gained significance in 2010 and paved the way forward for a more productive 2011.

New retention models: The reworked cost structure which proved highly effective in delivering business results, took a stronger foothold during 2010. For instance instead of the one size fits all formula or retention we have seen a more customized approach focused on development of critical individuals filing vital roles.

Rewards and remuneration: In the reward area, with an increasing emphasis on wealth sharing linked to PAT / profitability companies are likely to look beyond ESOPs at innovative models of short term and long term incentives. The trends that will gain importance in 2011 are career development and planning and leadership enhancement.

Unique incentive schemes: From project completion lunches to holiday sponsorship companies around the world doled out several innovative incentives to employees in a bid to retain them.

Green HR best practices: By asking what one could do to make a difference in terms of one’s health, community or the natural environment, organizations successfully engaged a majority of their associates globally to take some kind of action.

Trends change right? In 2010 too, while a few HR trends became redundant the rest had to undergo a transformation in an endeavor to stay relevant.

Leadership planning reinvented: In 2010, practices of succession planning changed dramatically. Focusing on only very senior positions will not suffice and organizations 2011 onwards will need to look at bench strength for middle and junior level positions too.

Don’t show me the money: Methodologies of engaging talent in the last couple of years will not work in 2011 as the market has opened up and job opportunities are aplenty. Only higher compensation will not be adequate to retain talent. Youngsters today are more focused on holistic growth and thus, overall involvement of the employee will be the key to success.

Work life balance overrated: Firms will need to relook at how much leeway they can afford w.r.t shorter working hours, five day week, special leaves, etc. Also, employees with their galloping aspirations may not value such benefits as most of them are more than willing to stretch themselves for quicker recognition.

Meet your new appraisers; In 2010 one could see the focus shifting from only a superior evaluating performance and potential of the subordinate to peer reviews, 360 degree feedback customer (internal & external) evaluations etc.

The boss may not be right: There also is a shift from autocratic style of management and leadership to a more participative collaborative style, this was also evident in the leadership practices.

Building your own career:
There were many instances that highlighted the onus of employee development that lies more on the employee and less on the company. The company can only provide a path and direction. In 2010 career pathing and career planning got more flexible with more co-ownership from the employees and organizations playing a facilitating role.

Short term loyalty: The concept of employment in declining from lifetime to value adds contracts. No one wants to be wedded from life with any organization and employees are exercising options, if they find their workplace not energizing enough or fail to connect with their goals and aspirations.

M&As: Although deal sizes varied there were many mergers and acquisitions (M&A) that involved thousands of employees. The HR function was keenly involved in these, not only in terms of integration but also during the early stages of selection and due diligence.

HR the business partner: There were better examples of HR adding value of the business by way of improving productivity (for example increasing revenue per dollar of salary), effectiveness for example by measuring and maximizing the impact of training) and reducing the time to hire and train the new employees thus reducing time on the bench (reduction of direct cost) etc.