It is a known fact that organizations are seeking opportunities to cut/curb costs. And when one talks about increments, bonuses and, perks these words itself qualify as unessential extras. Experts, however point out that even though we are in midst of a slowdown and cost cutting has become a necessary evil, rewarding employees through monetary and non-monetary benefits is imperative, as very organization needs an engaged workforce to get them through these tough times.
It is always easy to promise and offer financial benefits when times are good. However, when we are amidst an economic downturn, no company will make such promises. Therefore, the million dollar question is how can organizations reward high performing employees, despite the recession? Experts say that there may be a reduction in reward but there shouldn’t be a freeze on them. In such a dire economic environment even profitable companies must prepare themselves for a worsening economic environment. And that preparation requires the utmost streamlining and cash preservation, in an effort to ensure sustainability through a potentially drawn out economic downturn. Streamlining costs require reductions in costly benefits. But reductions and spending decisions need to be measured and smart. It is always important to reward performance with appropriate compensation increments. Monetary rewards can’t replace non-monetary recognition and vice versa. A balance is required.
The economy is headed towards a relatively better environment, but we still have some more ground to cover before it ultimately bounces back. It is at this time that we need to assure employees that the company is backing them, at all times. No doubt, monetary benefits will provide the necessary impetus to their productivity, but at the end, it is the organizational culture and the values instilled in the employees that will make difference. Recession or no recession, experts believe that it is absolutely essential to reward performers through monetary and non-monetary benefits. Also, at the time of recession, it is the security factor that counts. And all the important tangibles are required to reiterate the soft aspect that the organization values you and your contributions and you are safe for all the efforts that you have put through in the past year.
Experts unanimously agree that in an endeavor to curb costs, companies should resort to other measures of cost cutting instead of not giving benefits. Appreciate more through team gathering personalized letters, and peer recognition (not necessarily monetary). A few suggestions given below:
1) attach rewards to performance and tie in the retention concept which is cost beneficial and motivating too,
2) look at other operational costs and unnecessary expenditures (such as frills) office set up, energy consumption and try and cut cost on these not so necessary items and divert the cost to rewards
3) make a robust policy for performance which ensures a string focus on performance and business productivity and
4) try and continuously do a cost review every quarter, so as to know where there could be a combat strategy on pilferage loss and divert that cost effectively to enhancing employee productivity.
Kotak Mahindra Bank, as an organization does not believe that bonuses and new designations keep employees productive. Clarity of roles, process alignment, capability building backed by right infrastructure support and an environment where employees can grow and their potentials are tapped into are key factors. They are looking at this time as an opportunity to hone the skills of their workforce so that they are better prepared and poised to surge ahead once the economy is back on track. In the light of the current economic scenario, we are building on the group HR initiatives like re-skilling talent, and redeploying people, wherever needed. Cross functional teams have also been strengthened to take on new business initiatives.
It is a known fact that the global economic crisis has brought about a fundamental change in the organization’s functions itself. It is inevitable that employees have become more vary about their jobs and insecurities around the same prevail. It is therefore critical to elevate the morale/spirit of our employees. Besides giving a host of awards, Infosys BPO has a policy called RAMP (Rewards and Motivating Performance) which is designed to encourage employees to make a difference in their performance, either individually or through teams. Also, it has partnered with an agency wherein an employee can earn points, and later, redeem them at a large number of partner outlets based on which they can opt for gift vouchers.
Recession or no recession, employee motivation and engagement can be fostered through rewards and recognition. It could be a monetary form of recognition or otherwise; if the reward continues to be tangible, the organization’s purpose is served.