2013 Research Paper on Rewards and Recognition

8/11/2019 2013 Research Paper on Rewards and Recognition

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Aniruddha LimayeRazeyeh JalaliDivya Martyn

Research report by Great Place to WorkInstitutePresented to you by Edenred

Building a High Performance Workforce :A Study on Rewards and

Recognition practices in India


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AcknowledgementsWe would like to thank all the participating organizations for

giving us an opportunity to study their practices on Rewards and

Recognition. We are also grateful to the winning organizations

for allowing us to share their practices, knowledge and wisdom

developed with great effort over a period of time.

Authored by:

Aniruddha LimayeRazeyeh Jalali

Divya Martyn

Supported by:

Joyoti Banerji

Yuvika Gulati

Rajkumar Gupta

Indias Best Companies for Rewards and Recognition

anchored by: Madhavi Katre

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Sandeep Banerjee, CEO, Edenred India, The growing

economy has presented an avenue of robust opportunities

for the ever demanding workforce. The evolving dimensions

of the work environment have triggered Indian organizations

to relook at their rewards and recognition programs in a

strategic and structured fashion. Apart from higher pay

packages and a host of tangible benefits, companies are

differentiating in their offerings with elements that can

contribute to the overall employee experience, personal

growth and development within the organization. Edenred

and Great Place to WorkInstitute continue this association

for the 2ndyear in a row to applaud such organizations with

exceptional rewards and recognition practices that have

evolved themselves in order to maximize the performance of

the most valuable asset of the organization The Human

Capital. The outcome of the study - Indias Best Companies

for Rewards and Recognition 2013, will help organizations

benchmark their rewards and recognition initiatives with some

of the best in the country. We were thrilled with the response

and participation in the 1st year and this year over 105companies from across industry verticals have shown their

enthusiasm and participated in the study ascertaining our

belief in Indias Best Companies for Rewards and Recognition

and our endeavour to take this association to the next level in

the years to come

Prasenjit Bhattacharya, CEO, Great Place to WorkInstitute,

India and Sri Lanka, - The best workplaces in India have

demonstrated a significant shift in mind set when it comes to

rewards and recognition. Not only are they talking about total

rewards encompassing aspects of financial, intellectual,

physical, social and psychological rewards, but they are alsorecognising that talented employees are worth far more than

an average employee. There is growing realisation that

winning in the talent market is as important as winning in the

market for customers. We are grateful to Edenred who has

partnered us for the 2ndyear in a row in bringing this pioneering

study to you all. The Top 15 companies featured in this study

demonstrate that rewards and recognition can go far beyond

conventional definitions and be a key driver of emotional

engagement with the employees.

FOREWORD

Sandeep Banerjee.MD & CEO, Edenred India

Prasenjit Bhattacharya.CEO, Great Place toWorkInstitute, India

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Companies Featured

in this report

Eli Lilly & Company (India) Pvt. Ltd.Industry: Biotechnology and Pharmaceuticals

Number of Employees: 435

Years of Operation in India: 19

Year founded: 1993

Ownership: Privately held

Accor Hotels, IndiaIndustry: Hospitality


Years of Operation in India: 7Year founded: 2003


American Express India Pvt. Ltd.Industry: Financial Services & Insurance



Year founded: 1921

Ownership: Subsidiary division majority

Forbes Marshall Pvt. Ltd.Industry: Manufacturing and Production



Year founded: 1928


InterGlobe Enterprises Ltd.Industry: Transportation



Year founded: 1989


Mahindra Intertrade LimitedIndustry: Manufacturing and Production



Year founded: 1999


Intel Technology India PrivateLimitedIndustry: Information Technology




Intuit IndiaIndustry: Information Technology



Year founded: 2005

Ownership: Publicly held

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Companies Featured

in this report

NTPC Ltd.Industry: Manufacturing and Production



Year founded: 1975

Ownership: PSU

Music Broadcast Pvt. Ltd.RADIOCITY 91.1Industry: Media



Year founded: 1999


NIIT Ltd.Industry: Education and Training



Year founded: 1981

Ownership: Publicly held

Paypal IndiaIndustry: Information Technology



Year founded: 2006


Ujjivan Financial ServicesPrivate Ltd.Industry: Financial Services




Philips Electronics India LimitedIndustry: Electronics



Year founded: 1930


United Colors of BenettonIndustry: Retail



Year founded: 1965


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The need to focus on developing, nurturing and retaining

human capital has gained prominence in recent years.Organizations, in order to fulfil this need are turning towardscreative, unconventional and intrinsic approaches toformulate their rewards and recognition practices.

Organizations look to a variety of methods that ensureemployee engagement, productivity and loyalty. Innovative,viable and sustainable rewards and recognition programmesare now must-have tools for an organization and itsmanagers to motivate employees.

Rewarding practices fulfil an employees need to be fairlyrewarded for their capabilities, efforts and contribution.Organizations implement rewarding practices with an aim tooffer competitive salaries, bonus packages, and to share

the benefits of peoples combined efforts in a fair manner.Incentive plans, profit sharing schemes and otheropportunities for wealth and ownership sharing are thevarious forms of rewards organizations set out to presenttheir employees with.

Recognition practices are those that appreciate employeesefforts, contribution and results, thus positively recognizingand reinforcing desirable actions and behaviours. Suchpractices also help to create and maintain a Climate ofAppreciation in an organization with sincere appreciation ofgood work and extra effort, regularly and in a wide variety ofways. Such practices are of more intrinsic value toemployees as most often, they are carried out with noattached monetary value.

The second edition of Indias Best Companies for Rewardsand Recognition saw a total of 107 organization compete inthe sphere of rewards and recognition. Sampled employeesfrom these organizations were sent a questionnaireadministered over a period of 15 days. Before or during thistime, the participating organizations also had to provideinformation on its workforce strength, compensationstrategy, benefits policies, attrition rates, benefits etc. - thisformed part of the Culture Audit (2) submission.

In addition to this, organizations were required to share allrelevant information about their Rewards and Recognitioninitiatives that have been implemented. This is done by wayof answers to a specific set of questions sent to each of theparticipating organizations.

The study proposed two hypotheses:1: Once a threshold point is reached in terms ofcompensation, internal equity and transparency are moreimportant than the actual quantum of the rewards inenhancing the effectiveness of rewards and recognition(particularly rewards) programmes.

2: Higher frequency, genuine experience of appreciationand greater inclusiveness in recognition programmes makesthem more effective.

Literature review also indicates that these are relevant issuesthat organizations are grappling with as they try to enhanceperformance, innovation and cooperation in organizations

and reduce stress and employee burnout.

Both points above were tested by comparing the differences,between what the Top 15 in Rewards and Recognition,

2013 do vis-a-vis the other participating organizations .

Overall, on the statements related to rewards andrecognition, the Top 15 show significantly higher employeefeedback scores (and therefore experience) than the otherorganizations. A high percentage of the winners of both2012 and 2013 editions of this study have featured asIndias Best Workplaces of 2012.

The differentiating (between the best and the rest) factorsthat contribute to internal equity in reward mechanisms are: Wider distribution across levels and roles Liberal payouts and policies for medical benefits Higher differentiation based on performance with lower

fixed and higher variable pay along with higher incrementpayout at the highest end of the range.

Higher proportion of employee ownership schemes

(especially stock options) and a wider distribution More grievance redressal channels contributing to asense of justice

The differentiating (between the best and the rest) factorsthat contribute to climate of appreciation in an organizationare: Greater variety and parameters for recognition including

greater opportunities for public recognition Recognition for for effort and not only high performance,

including potential and skill levels Inclusiveness in recognition and more focus on every day

recognition by managers than monthly, quarterly orannual forums.

We envisage that these differentiating factors are useful forpractitioners and organizations seeking to enhance theirpractices and could evaluate these for implementation intheir organization.

Equally it is also clear that some aspects have becomehygiene and are especially useful for organizations whoare starting this journey. Ensuring non-discrimination ofrewards vis--vis age, race, gender by ensuring audits,basic medical benefits, long tenure recognition andrecognition for results in monthly, quarterly or annual forumsare some examples of these.

There are some areas that are still to be clearly implementedby organizations and are practiced only by a few. These arehowever important subjects of debate and discussion aswe prepare our organizations for the future. Employeesfamilies need to be included not only in medical benefits butin overall recognition as well. recognition for finding newperformance levels, personalization of recognition are someof the aspects that have been discussed here. Lastly, animportant element to ensure continued success of suchinterventions is the extent of participation and collaborationin design and modification of policies and programs. Theseensure that there is a self-correcting mechanism in theorganization and that programs are designed to suit diverseneeds of different generations, gender and roles. There isdefinitely scope for companies to do more in this area.

We trust you will find this report interesting and useful asemployees, HR practioners and leaders. We would like to

thank all participating companies for their involvementwithout which this could not have been possible.

Good luck with your journey.

Executive Summary

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Contents1. Introduction

2. The 2012 study Lessons for 2013

3. Literature review and Key Hypotheses

a. Rewards and recognition explained

b. Defining rewards and recognition

c. Key hypotheses

4. Great Place to Work framework and study methodology

5. Key findings

a. Overall effectiveness

b. Findings on rewards

i. Quantum of compensation and internal equity

ii. Non- discrimination

iii. Distribution of rewards

iv. Fixed pay versus variable pay and differentiation

v. Employee ownership schemes

vi. Grievance redressal and perception of justice

c. Findings on recognition

i. Variety and frequency of programs

ii. Recognition for efforts and not only high performance

iii. Recognition for long tenure is a common trend

iv. Inclusiveness in recognition

v. Forms of recognition

d. Assumptions

6. Conclusion

7. References

8. Appendices

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The need to focus on developing, nurturing and retaining

human capital has gained prominence in recent years. To

this end, companies in India are restructuring their rewards

and recognition programs, as means to retain and motivate

their employees. Organizations today are turning towards

creative, unconventional and intrinsic approaches to

formulate their rewards and recognition practices. From

sophisticated single window employee rewards and

recognition platforms, to contextualizing rewards and

communication to the specific needs of every employee, or

even providing them with learning and development

opportunities for personal growth, companies are forging

ahead in the new era of rewards and recognition programs

which are in line with the needs and aspirations of the Indian

workforce. Edenred is adept in the rewards and recognition

space, designing structured programs for progressive

organizations to help them make their workplace come alive.

Great Place to Work Institute, on the other hand, has

extensive experience in research and consulting and

benchmarks best people practices at a global level. This

alliance drives a lot of synergies for both partners in their

areas of proficiency to be able to understand and honor theexceptional rewards and recognition practices of

organizations in India to motivate talent and improve their

overall performance.

Great Place to Work Instituteis known globally as one of

the pioneers in the practice of studying and recognizing the

best workplaces. Over 2.5 million employees from over 7000

organizations in over 40 countries participate in the Best

Workplace study each year- making this the largest global

study of its kind in the world. The mission of the Institute is to

build a better society by helping companies to transform

their workplaces. The Best Workplaces Study in India is

inspired by the vision of Making India a Great Place to

Work. The institute has been conducting workplace studies

and has been recognizing the best companies in India for the

past 9 years now. Along with studies the Institute provides

advisory and consulting support for companies that wish to

enhance their workplace experience. Indias Best

Companies to Work For, conducted by Great Place to

WorkInstitute India and The Economic Times, is the largest

study of its kind in India.

Edenredis the world leader in prepaid service vouchers with

over 50 years of experience in corporate and public benefits.

In India, Edenred partners over 3,500 organizations with a

wide range of innovative Work-life Benefits, Rewards and

Loyalty Solutions. Edenred entered the Indian market in

1997 with Meal Vouchers & Cards, Gift Vouchers andRewards & Loyalty Solutions; and has become a major

player providing services to corporate clients and public

institutions.

INTRODUCTION

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2012 witnessed the first edition of Indias Best Companies

for Rewards and Recognition (henceforth, R&R) Awards

and White Paper. A total of 76 organizations applied to

participate in the study. These 76 organizations represented

11 industries including Information Technology, Financial

Services, Media and Telecommunication.

Of the 76 organizations who participated, Great Place to

WorkInstitute together with Edenred felicitated the Top 10

in Rewards and Recognition. The first edition White Paper

highlighted the findings and unique practices from these 10

organizations.

This section outlines the major findings of the 2012

research. The 2013 edition of this study will build on a few

findings from last year, and will take a deeper look into a few

elements of both rewards and recognition, and the factors

contributing to its effectiveness in organizations.

To begin with, the report determined that an organizations

culture (basic values and beliefs) needs to be reflected in its

rewards and recognition practices. We have incorporatedthis learning into this years study and we have looked at

organizations that recognise employees for displaying

behaviours that are true to its values. The report also found

that recognition practices have immense potential, many of

which are yet to be utilised to their full potential . This

recognition can be both public and private, can be non-

monetary (no budgetary constraints in implementing), can

be provided by all levels in the organization, can be more

proximate to the actions and results and can be done

frequently. It was also established that most organizations

have not been utilising the potential of effective recognition

practices effectively. Hence this study aims to understand

this in greater detail.

Employee perception of fairness depends on factors such

as internal equity, external parity, impartiality in assessment,

clarity on desired actions/behaviours and results that will be

rewarded, and, the level of transparency on the reasons or

parameters of a reward. The 2013 study will explore a few

of these factors in detail. Data relating to the establishment

of internal equity and employee perception of fairness will

be used to test the hypotheses discussed later on in this

report.

The previous study also reported that it was important to

involve employees in decisions on the various ways in which

rewards and recognition can be provided. Additionally, it

was also discovered that using recognition to drive certainbehaviours and efforts, not just results, increases the

positive impact of an R&R program. Personalised or

individualised gifts (without violating the essence of fairness

in the practice) make recognition elements more motivating

and meaningful. All three data points mentioned above will

be further tested in the current study.

Another factor that plays a vital role in the acceptance and

effectiveness of an R&R practice is communication.

Communication here not only refers to the process of

informing employees about what can be earned but also

refers to the medium used to transfer information throughout

the organization. Companies may choose to announce a

new Restricted Stock Units (RSU) scheme via internal mass

mailers. They may also choose to conduct country wide

road shows to gain face-time with employees from all

regions - to communicate the same initiative. The current

study will highlight a few such practices implemented by the

winning organizations.

A few factors contributing to effectiveness have emerged

from the 2012 data. The defined metrics of a programme

(what is achievable and who can achieve what), the

transparency of communication of these metrics and the

accuracy with which performance is calculated are factorsthat positively contribute to an effective R&R programme.

The weight of the amount/gift/recognition needs to be

calculated in line with the values/goals of the organization.

If the weight is too little, employees will lose interest and, if

it is unrelated to demonstration and practice of desirable

behaviours, it will be perceived as unfair by employees.

The study conducted this year will build on these points and

will also attempt to answer questions relating to the exact

factors that ensure effective rewards and recognition

programmes. The benchmark to check and measure this

effectiveness is the employee feedback collated as

responses to the Trust Indexquestionnaire. Thus, for the

purpose of this report, the feedback scores of the Top 15 inRewards and Recognition will be used as a measure of

effectiveness.

Additionally employee referrals and voluntary separations

have been looked at as indicators of effectiveness. A

surrogate measure that has been considered is whether the

companies have featured as Indias Best Companies to

Work For ,2012 and 2013 - A Study by Great Place to

Workin partnership with the Economic Times.

In summary, the 2012 study provides some learning for the

current one, an opportunity to continue to test some of the

earlier hypotheses and critically examine some new ones

with data

THE 2012 STUDY- LESSONS FOR 2013

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The war for talent today is one of the biggest challenges faced by

organisations, both large and small, and it has become increasingly

harder to attract and retain the kind of talent that is necessary to

sustain a growing business in the long term. Talent management

in India constantly needs to tackle two major issues. The first deals

with the employability of students being churned out of our

universities. The second deals with retaining talent in organizations.

A McKinsey study reported that only 10%25% of the 14 million

university graduates churned out by Indian universities work in

MNCs, mostly because they do not have the language skills,

cultural awareness or other competencies needed for the job

(Holland, 2008), required in global corporations. Equally challenging

has been their retention of knowledge workers beyond 23 years.

In India, the information technology (IT) and business process

outsourcing (BPO) sectors experience annual attrition rates of

30%45% (Bhatnagar, 2007). This is also the case in many other

industries in India today. As an article in Business Standard states

"India Inc. may see attrition rates as high as 31%" 2013), a study

has found that while IT/ITES (BPO) industry showed the highest

attrition rates in the country during the first quarter of the Financial

Year, it is closely followed by the Telecom industry (26%), Banking

and Financial Services (23%), Aviation and Hospitality (22%),FMCG (21%), Automobile and Manufacturing (19%) and Real

Estate (15%).

Several research studies have revealed that this is not just an

Indian phenomenon. It has been estimated that in most significant

economies across the globe, around 55% - 60% employees are

either actively seeking alternative job opportunities or seriously

contemplating a job change.

What is recognition?

As much as this is a widely understood concept, there are some

definitions that capture the essence of the word well. One such

definition has been put forward by Brun and Dugas (2008) who

say Recognition is first and foremost a constructive response; it isalso a judgment made about a persons contribution, reflecting not

just work performance but also personal dedication and

engagement. Lastly, recognition is engaged in on a regular or ad

hoc basis, and expressed formally or informally, individually or

collectively, privately or publicly, and monetarily or non-monetarily.

Similarly, rewards are an important part of an organisations

system, and the right kind of rewards system helps in contributing

to employees feeling motivated and committed to their job

(Bonsdorff 2011). It has been long understood that rewards and

recognition in the workplace are important, and the integral

aspects of motivating employees, whilst keeping them engaged at

the work they do. Today, employees are not satisfied with just

going into work today. As studies done by Great Place to Work

Institute have shown us year on year, employees want a lot moreout of their workplace be it in terms of feeling like they belong to

a community, that they are valued and their differences appreciated,

or even in knowing that their management is taking them in the

right direction companies we have studied and identified over

the last 25 years as the best in their space have consistently

scored high on these elements.

There have been numerous studies in different industries trying to

establish a link between the right kind of rewards and recognition

programmes, and the impact on employees. A study conducted

by Bhattacharya and Mukherjee (paper 12) among Information

Technology organisations in India found that employees in the IT

sector placed a great emphasis on rewards. They also identified

many key aspects an effective rewards and recognition programme

will need to encapsulate, which include:

The need to be fair, transparent, inclusive, timely and varied.

The form of recognition should be appropriate to the contribution

that was made.

Recognition should be meaningful and reflect the preferences

of the recipient.

Any related activities should be respectful of workplace diversity

and must be done with the involvement of employees.

When recognition is the result of a group or team effort, all

contributing members of the team should be recognized. The right kind of communication on recognition activities needs

to happen to promote a culture of recognition and pride among

employees.

Brun and Dugas (2008) have found interesting relationships

between recognition and the psychology of the worker. An excerpt

from their paper explains the relationship even better .

Brun and Biron et al. (2003) reveal that lack of recognition

constitutes the second-largest risk factor for psychological

distress in the workplace. Among managers, for instance, it would

appear to constitute a stress-tolerance factor and a key element in

their ability to handle difficult professional situations (Dany and

Livian 2002). One of the most important sources of organizationalmobilization and engagement (Wills, Labelle, Guerin and Tremblay

1998; Tremblay, Gay and Simard 2000), recognition plays a key

role in the success and continuity of organizational change

(Atkinson 1994; Fabi, Martin and Valois 1999; Evans 2001).

Moreover, it promotes on-the-job learning (Lippit 1997) and is a

building block of learning organizations (Griego, Geroy and Wright

2000). Finally, by contributing to employee job satisfaction,

recognition has a positive impact on organizational productivity

and performance (Applebaum and Kamal 2000).

What do companies mostly base their recognition schemes on? A

study conducted in the USA by the Society for Human Resource

Management in 2011 shows that 58% of the organisations

recognised tenure in the company, 48% recognised employeeswho went over and above their regular call of work, 43%

organisations recognised employees for adding to the

organisations financial bottom line, 37% recognised employees

LITERATURE REVIEW,DEFINITIONS AND KEY HYPOTHESES

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who behaved according to the values of the organisation, 9%

recognised employees for the high-quality outputs on work

projects and 2% on completing the projects ahead of deadlines.

This information is very important for organisations especially as

further research conducted by Globoforce, Intuit, and Stanford

Graduate School of Business reported that for a recognitionpractice to be considered an important strategic tool within the

company, it had to involve 5%-8% of the employee base. If it did

not, the recognition scheme was irrelevant to the organisation.

As is obvious, there are many common reasons for implementing

rewards and recognition schemes within an organisation. Then

why do some companies not give enough emphasis to these

schemes, or look at implementing them in the proper manner

within their organisations? Studies have shown a plethora of main

reasons, and the bottlenecks that crop up for these continue to be

managers within the organisation. Brun and Dugas (2008) refer to

research that has found that managers are apprehensive of giving

recognition to their subordinates due to:

1. Fear of losing control,

2. Apprehensions about others creative power,

3. Resistance to more egalitarian relationships, and,

4. Detachment from employees actual work often caused by

new management constraints.

Other reasons for companies not giving due prominence to

rewards and recognition schemes for employees include biases

against recognition and the perception of recognition being

misconstrued as flattery and that they have to be handled carefully

and accurately, as they can have unexpected repercussions (Brun

and Dugas 2008). Brun and Dugas (2002) also point out that this

is an implication of the lack of time, knowledge or skill of managers

for implementation.

In summary current literature on the subject indicates that rewards

and recognition plays a key role in helping organizations achieve

employee commitment and result. It is important to be fair,

transparent and team oriented when recognising employees.

Additionally absence of it causes stress. Lastly the manager is the

key player in making it successful.

REWARDS AND RECOGNITION EXPLAINED

Rewards and Recognition is therefore a subset of the overall

framework of employee perception lays a vital role in creating trust

in the workplace. Organizations today are engaged in two major

battles: the battle for customers and the battle for the best talent.

An increasing number of organizations in India are realising that

the first battle cannot be won without winning the second.

Therefore, in addition to providing their workforce with a dynamic

work environment, organizations look to a variety of methods that

ensure employee engagement, productivity, and loyalty. Innovative,

viable and sustainable rewards and recognition programmes have

become must-have tools for an organization and its managers to

motivate employees.

Rewarding practicesfulfill employees needs to be fairly rewarded

for their capabilities, efforts and contribution. Organizations

implement rewarding practices with an aim to offer competitive

salaries, bonus packages, and to share the benefits of peoplescombined efforts in a fair manner. Incentive plans, profit sharing

schemes and other opportunities for wealth and ownership

sharing are the various forms of rewards organizations set out to

present their employees with.

This study includes the following areas under Rewards and

Recognition:

1. Assured annual compensation

2. Special or annual increases in assured compensation

3. Increases in benefits and/or compensation with changes in

grade, role or position

4. Performance based variable pay, incentives, bonus (that may

be monthly, quarterly, half yearly or annual) or even longer term

rewards

5. Rewards for loyalty or long tenure

6. Rewards in gifts or cash for specific actions, behaviours, and

contribution

7. Rewards ingifts or cash for contribution from suppliers,

vendors, third party employees

8. Rewards in gifts or cash for family members contribution/

achievements

9. Personal recognition/appreciation for desirable actions and

contribution without any significant cash component in a

public or private manner

10. Wide range of benefits and perquisites i.e. those that are

beyond the statutory mandates.

11. Long term wealth sharing mechanisms such as restricted

stock units, stock grants, phantom stock grants, stock

options, discounted stock purchases, etc.

Thanking practicesare those that appreciate employees efforts,

contribution and results, thus positively recognizing and reinforcing

desirable actions and behaviours. Such practices also help to

create and maintain a Climate of Appreciation in an organization

with sincere appreciation of good work and extra effort, regularly

and in a wide variety of ways. Elements contributing to this climate

of appreciation will be looked at while testing the hypothesis at a

later stage in this report. Thanking in most organizations is done

by creating a wide variety of opportunities for employee recognition.

Some of these are - peer recognition, awards for performance,

tenure of service, adherence to safety norms both at individual or

team levels and recognition for display of company values.

DEFINING EFFECTIVENESS OF REWARDS & RECOGNITION

PROGRAMMES

As mentioned earlier in this report, employee perception has been

measured using the Trust IndexQuestionnaire. This perception is

measured in the form of feedback on certain statements from the

questionnaire that relate to an organizations reward and

recognition practices. Effectiveness of the R&R programmes in an

organization is measured primarily on the basis of this employee

feedback. Therefore, this report adjudges an R&R programme as

effective when the following criteria are met:

1. There is positive employee perception about Rewards andRecognition programmes i.e. the arithmetic mean of the

weighted average scores of the relevant Trust Index

statements for the best companies for R&R are higher than the

rest of the organizations who have participated in the study.

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2. These organizations - the Best in 2012 & 2013 -(winners in

Rewards and Recognition)have also been featured in the list of

Indias Best Companies to Work For, 2012- A Study by Great

Place to Workand The Economic Times.

3. Finally, the rate of voluntary separations is lower in thesecompanies while the employee referrals are higher (both, in

terms of numbers and percentage of employees recruited) for

the Top 15 companies for Rewards and Recognition than for

others who have participated.

KEY HYPOTHESES

After having discussed the literature on Rewards and Recognition,

this report now sets forth two working hypotheses that will be

validated with the help of qualitative and quantitative data collected

from participating organizations.

1: Once a threshold point is reached, internal equity and

transparency are more important than the actual quantum ofthe rewards in enhancing the effectiveness of rewards and

recognition (particularly rewards) programmes.

2: Higher frequency, genuine experience of appreciation and

greater inclusiveness in recognition programmes makes them

more effective.

The first aim of this study is to prove that perceived equity, fairness

and transparency in a reward practice together have a greater

impact on the effectiveness that just the actual size/quantum,

amount or value of the reward. This study has already identified

that a high employee feedback score reflects effectiveness of

rewards and recognition practices. Therefore this hypothesis willbe proven only if the data collected reveals that for all (or at least

significant majority) of the elements mentioned below, the data for

the Top 15 is significantly different from that of the other

participants. Findings of the study will be used to demonstrate the

various factors that contribute to internal equity in an organization.

Secondly, this study suggests the ideas that, in order for recognition

programs to be truly effective, they must be frequent, close to the

action, reflect a genuine sense of gratitude and attempt to include

a majority of the workforce. Data on recognition will be used to

discuss and illustrate the points that validate this hypothesis.

This study will also look at those contributing factors/ characteristics

that have scattered evidence and may be points for discussion forfuture practices.

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The following statements have been considered as

indicators for employee perception on rewards and

recognition in the organization.

REWARDS

People here are paid fairly for the work they do.

We have special and unique benefits here.

Managers avoid playing favourites.

I feel I receive a fair share of the profits made by this

organization.

Promotions go to those who best deserve them.

Performance of employees here is fairly evaluated.

RECOGNITION

Management shows appreciation for good work and

extra effort.

Everyone has an opportunity to get special

recognition.

Managers avoid playing favourites.

Performance of employees here is fairly evaluated.

THE CULTURE AUDITFRAMEWORK

This report has already defined a great workplace from an

employees perspective. However, while managerial

employees are also employees, once in a managerial role,

their relationship with the organization, self, team and

individual goals changes. Therefore, from a managers point

of view, a great place to work can also be defined as one

where a manager is able to get people to achieve the

organizational objectives, give their personal best and

work together cohesively as a team/family - all in anenvironment of trust.

Employee feedback reflects an employees perception ofthe practices, policies, processes, values and overall

cultural environment of his/her workplace as he/she

experiences it. Every manager plays a vital role in planning

and implementing practices and programmes that

contribute to this overall cultural environment of the

organization. Great Place to Work Institute, after several

years of research has identified 9 people practice areas

that complete an organizations cultural circle, and

encompass an employees life cycle within an organization.

The picture below illustrates the 9 people practice areas

that organizations are required to focus on in order to

develop into great workplaces.

Examples and descriptions of each practice area can beseen in APPENDIX 1 .

Thanking and Sharing (Rewarding) are the two people

Globally, Great Place to Work Institute has developed

research in the field of employee trust & engagement over

the past 20 years. This experience and learning has led to

the definition of a great workplace. Research has shown

that the key to creating great workplaces was not present

in any prescribed or predetermined set of employee

benefits, programs and practices, but in the building of high

quality relationships. Great Place to WorkInstitute defines

a Great Workplace as one where employees trust the

people they work for, take pride in what they do and enjoy

the people they work with. Thus, the fundamentals of

building a great workplace rely on three, core elements

Trust, Pride and Camaraderie.

THE GPTWFRAMEWORK

Figure 1: Great Place To WorkModel

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practice areas that are relevant for the purpose of this report.

Although these practice areas will be discussed at a later stage, it

is important to understand the fundamental premise behind each.

Thanking: A manager (or peer, or anyone in an organization)

recognises and rewards good work and extra levels of effort.

The organization as whole strives to create a climate of

appreciation, gratitude, approval and reinforcement.

Sharing (Rewarding): Employees of an organization are allowed

to share the fruits of their labour in a variety of ways. The

organization also ensures that rewards are equitable and

egalitarian in nature.

METHODOLOGY

Indias Best Companies to Work For is an annual study which

rates Indias Best Employers. All organizations participating in the

2013 edition of this study were invited to participate and share

information on their Rewards and Recognition practices/

programmes and to compete in the second edition of Indias Best

Companies for Rewards and Recognition.

A total of 107 organization opted to compete in the sphere of

rewards and recognition. 75 organizations completed the 2 step

process and the winners of Indias Best Companies for Rewards

and Recognition have been selected from this lot. This is a 41%increase since last year and a testimony to the growing awareness

and keenness of organizations to participate.

DATA COLLECTION PROCESS:

STEP 1: Organizations desiring to participate in Indias Best

Companies to Work For, 2013, registered themselves.

STEP 2: Organizations desiring to participate in Indias Best

Companies for Rewards and Recognition, 2013, registered

themselves for this award as well.

STEP 3: Information about qualification criteria was sent to

organizations. An organization was informed if it did not qualify to

participate.

STEP 4: As a critical process in the overall study, a questionnairewas administered to all/a sample of employees within the

participating organization (depending upon what the participating

organization had chosen). This is the Trust Indexquestionnaire,

which required employees to plot their responses to 62 statements

on a 5 point scale. These responses then formed the basis of the

quantitative analysis which was done.

STEP 5: The questionnaire was administered over a period of 15

days. Before or during this time, the organization had to provide

information on its workforce strength, compensation strategy,

benefits policies, etc. - this formed part of the Culture Audit (1)

submission. A detailed description of the practices implemented

by an organization for each of the 9 People Practice Areas was

submitted by participating organizations as part of the Culture

Audit (2) document.

In addition to this, organizations were required to share all relevant

information about their Rewards and Recognition initiatives that

have been implemented. This is done by way of answers to a

specific set of questions sent to each of the participating

organizations. This Rewards and Recognition submission is the

second part of what is analyzed to select winners in this sphere.

Excerpts and relevant points from these submissions will be

discussed at a later point in this report.

The participating organizations also provided information relating

to benefits, attrition rates, employee referral percentages, etc.

Figure 2 : 9 People Practice Areas

INTEL INDIA:

Customer Excellence Program

CEP uses an annual customer survey to generate top-level customer improvements.

Feedback obtained from the CEP survey is analyzedand compared with other Intel customer feedback toidentify issues that have a high impact on customercommitment and retention.

Two days of pay per year are tied to the CustomerExcellence Program based on achieving their goal of75% delighted customers._______________________________________________

PHILIPS INDIA

Dronacharya Award for the Best Mentor (PIC)

To recognize the mentor who has shown dedication &commitment to mentor the early career potentials ofPIC. The mentees and menteess managers are askedfor feedback about the mentors. The weighted averageof the feedback is taken and the mentor whose rating isthe highest is declared the winner.

This award is also announced during the Grand townhall which happens in the end of the year.It consists of aCertificate, memento & Cash award_______________________________________________

UJJIVAN FINANCIAL SERVICES

Stock options at Ujjivan are available for everyone- rightfrom the driver to the CEO

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OVERALL EFFECTIVENESS

Overall on all statements related to reward and recognition,

the best companies show a significantly higher employee

experience than the other. (Statements to demonstrate the

difference in weighted average scores between the Best

Companies in Rewards and Recognition, and the Rest. )

The graph above shows that the perception for the Top 15

organizations is higher at granular as well as at an overall

level. The numbers in brackets represent the number of

employees surveyed. Employees are more positive about

reward practices and factors affecting fairness at the Top

15 organizations for R&R. Interestingly, statements relating

to employees getting a fair share of profits and managers

avoiding favouritism have lowest scores for the bestorganizations as well as the rest. But in both cases the

average scores of the rest are lower than the best by 19%.

Employee perception on recognition follows a similar

pattern as that on rewards. However, the scores for all the

participating organizations are a little closer to the scores

for the Top 15 here and scores are higher for recognition

related statements than rewards related statement for all

participating organizations. It will be interesting to compare

analysis of the recognition practices for both sets of

organizations in the upcoming sections. One inference that

could be drawn here is that employees in both sets of

organizations have more positive perception about

recognition practices than rewards.

This report also set out to show the link between robust

rewards and recognition practices and overall positive

employee perception about their organization as a great

workplace. The data below shows the number of

organizations who have also been featured as a Best

Employer for 2012- Indias Best Companies to Work For,

2012.

11 out of the Top 15 in Rewards and Recognition in 2013

have featured in the 2012 edition of Indias Best Companies

to Work For. It will be interesting to see whether these

organizations will also feature as Indias Best Workplaces

for 2013. 7 out of 10 companies from the 2012 Best in

Rewards and Recognition list have been ranked as Indias

Best Workplaces of 2012. This goes to show that employees

at these workplaces (Best in Rewards and Recognition for

2012 and 2013) have a more positive perception of theirworkplace than other organizations, and robust rewards

and recognition practices go hand in hand with building a

highly empowered workforce.

Most organizations (91%) that have participated and have

provided R&R data (68 organizations) pay a bonus for a

successful referral. While this is a common practice, it is not

a differentiating practice which sets the best apart from the

rest. Organizations that are in the Top 15 (12 with data)

have an average referral rate of 36%. For the other

organizations, (40 with data) this average drops to 30%.

The average voluntary separation rate for those in the Top

15 who submitted this information (14 organizations) is12%. This rate increases to almost 20% for other

participating organizations (40 organizations). Therefore,

there are fewer voluntary separations and more employee

80%

75%

70%

65%

60%

55%

50%

76% 76%

71%

69%

78%

70%

65%66% 67%

58%

71%

59%

Taking everything into accont, I would say that this

is a great place to work. Best-87%, Rest-82%

Average scores for the Top 15-15 companies (4755)

Other organization-60 companies (21121)

People here

are paid

fairly for the

work theydo.

I feel I receive

a fair share of

the profits

made by thisorganization

We have

special and

unique

benefitshere.

Promotions

go to those

who best

deservethem.

Managers

avoid

playing

favourites.

Performance

of employees

here is fairly

evaluated.

EmployeeFeedback-TrustIndex(c)Score

Figure 3: Perception of rewards- The Best versus the Rest.

KEY FINDINGS

85%

80%

75%

70%

65%

60%

55%

50%

82%

78%

69%

78%

75%

70%

58%

71%

Taking everything into accont, I would say that this

is a great place to work. Best-87%, Rest-82%

Average scores for the Top 15-15 companies (4755)

Other organization-60 companies (21121)

Management shows

appreciation for good

work and extra effort.

Everyone has an

opportunity to get

special recognition.

Managers avoid

playing favourites.

Performance of

employees here is

fairly evaluated.

EmployeeFeedback-TrustIndex(c)Score

Figure 4: Perception on Recognition- The Best and The Rest

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UJJIVAN FINANCIAL SERVICES

External Parity

Compensation surveys are conducted from time to time

to benchmark against the industry compensation

trends. Ujjivan undertook a compensation survey at the

Industry level with MFIN (Micro- Finance Institutions

Network the Industry body similar to NASSCOM, CII),

this year for compensation benchmarking.

_______________________________________________

INTEL INDIA PRIVATE LIMITED

Focal Tools (annual performance appraisal tool) and

Base Pay Comparison tool which allows managers to

view the relevant position of their team members in theirsalary range. The tools can show the internal parity

(within the company) and external parity (within the

industry). Any salaries which go beyond or below a

particular grades range are flagged and highlighted and

these cases are to be justified by the manager at senior

level meetings. However, such exceptions in salary

ranges are rare and not encouraged. All managers have

access to the CRT (Compensation Reference Tool)

which details out the salary.

My Total Package:

Employees can view their salary range as well and can

find where they stand in their grades salary range.

INTERGLOBE ENTERPRISES

CLAP (Champions League Appreciation Program)

CLAP is a tool to recognize employees of our Air

Transport business, for living the values of the

organization namely Integrity, Customer Orientation and

Future Mindedness. CLAP Awardees are recognized as

Champions. The award consists of a Certificate signed

by Business Head and a token of appreciation a giftvoucher worth INR. 15000/-.

_______________________________________________

PHILIPS INDIA

K.I.T.E. Awards

Keep Improving To Excel is a one of a kind competition

at Philips which aims at promoting Lean and Six sigma.

The program consists of workshops on Lean and Six

sigma initiatives. Post the training workshops, the

employees who are able to sustain results are given

projects. These projects become part of the businessimprovement competition which is judged by the India

management team.

_______________________________________________

AMERICAN EXPRESS INDIA PRIVATE LIMITED

An in-house wellness program- Healthy Living which

promotes awareness on healthy eating habits within

their employees along with mental and physical fitness.

Under this umbrella, various initiatives such as the on-

site clinic (Care@Amex), on-site gym and fitness

sessions, smoking cessation program, pregnancy care

program and Employee Assistance Program, Weight

management program etc. have been designed for ouremployees.

referrals, in the Top 15 organizations. Employees at these

workplaces are less likely to decide to move on, and are more

likely to recommend their workplaces to their social and

professional circles.

The findings provide interesting learning on factors that differentiatethe best, those which are hygiene across the organization and

also areas that need to be considered in the future.

Let us now look at rewards and recognition separately.

FINDINGS ON REWARDS

The following factors have been measured to infer about an

organizations internal equity and transparency of its rewards

programs:

Compensation of the CEO of the organization, when compared

to that of fresh graduates and /CAs as a multiple of the

compensation of these categories.

Total compensation of Supervisors to Managers and Senior

Management Team Members.

Appropriate market corrections and internal corrections made

in the compensation level of deserving lower paid employees,

proactively, from time to time, to minimize anomalies and

inequities.

Non-discrimination in compensation, benefits and rewards on

the basis of gender, caste, race, language and religion.

Incentives and performance bonus availability across all levels,

roles and functions.

The parameters of rewards especially for incentives/

performance bonus and the amount of increments Wealth

creation/wealth sharing opportunities such as Stock Options/

Restricted Stock Units/Stock Purchase Plans, etc., made

available to the largest number and percentage of employees

regardless of their level, function and tenure.

Percentage of the organizations stock owned by employees

Grievance redressal/appeals that specifically deals with matters

relating to compensation, grade & salary fitment, performance

rating and increment/incentive/performance bonus and

promotions.

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the Top 15, than in the other organizations.

Taking a deeper look into select industries, data demonstrates that

the financial services sector has returned the highest difference

between the salary structure of CEO and entry levels. The average

salary multiplier for CEO compensation compared with an MBA

entrant is 45; whereas, it is 25 and 21 for the IT and Manufacturing

industries respectively. Similarly, for fresher comparisons, the

CEO salary average is 68 times in Financial Services, while it is 32

and 40 for the IT and Manufacturing industries. This indicates that

there is greater sense of internal equity in these two sectors, when

compared with Financial Services.

Internal equity is also established when organizations regularly

track and compare their compensation and benefits with a suitable

basket of organizations. Compensation of newly hired employees

versus those with tenure (of comparable performance) is also

tracked. Appropriate market corrections and internal corrections

are made in the compensation level of deserving lower paid

Accessibility of generic benefits which are not required to

perform ones role effectively to employees across levels, roles,

functions and locations.

Extent of feedback and inputs from employees, supervisors

and managers to decide on introduction, withdrawal or changein benefits.

QUANTUM OF COMPENSATION AND INTERNAL EQUITY

Data indicates that the Top 15 do not have vastly higher

compensation at and between various levels, thereby suggesting

that the quantum of compensation need not be drastically high to

create an effective rewards experience.

The table shows the salary range for 3 different levels, and

compares this between the Top 15 and the rest. Although the

minimum and maximum amounts for most levels are higher in the

Top 15, the difference in amounts is only marginal. The

compensation range 5 lakhs to 52 lakhs- for both, the Best and

the Rest is the same.

Equity in compensation

Total Compensation of the CEO of the organization, when

compared to that of fresh graduates and MBAs/Engineers/CAs is

a smaller multiple of the compensation of these categories. Given

the fact that CEOs (with some guidance & governance from the

Board of Directors and/or Compensation Committee of the Board)

significantly influence their own compensation, a lower ratio

between the CEOs total compensations and that of other

categories mentioned here, shows restraint and a sense of fairness

on the part of the CEO and the Board/Compensation Committee

and the organisation.

The data in figures 6, 7 and 8 suggests that the difference between

the CEOs salary and entry level personnel is significantly lower for

Ceo's Salary

compared to a

Graduate

Number of

respondents

AVERAGE of Top 15 26 times 10

AVERAGE OF THE REST 46 times 25

Figure 8: Comparison of the CEOs Salary to that of a fresh graduate/engineering graduate.

RADIO CITY 91.1 FM

Proportion of variable pay depending on:

Organization Achievement

B1 - Senior Management 50%

B2 - Middle Management 25%

B3 - Junior Management 0

Individual Achievement

B1 - Senior Management50%

B2 - Middle Management 75%

B3 - Junior Management 100%

_______________________________________________

MAHINDRA INTERTRADE

Overseas Incentive Scheme

Successful teams travel for 3 nights/4days on a leisure

trip. The organization takes pride in seeing the delight

in the eyes of employees, most of whom are from tier-II

and tier-III cities and many of these were on their maiden

overseas trip, courtesy the overseas incentive scheme.

In fact significant number of employees applied for a

passport as they were eligible for a company sponsored

overseas incentive trip.

Average of Top

15

(INR lakhs)

Average of

Rest (60)

(INR lakhs)

Supervisory - Min 5 5

Supervisory - Max 6 6

Managerial - Min 14 12

Managerial - Max 17 15

Senior Managerial - Min 43 37

Senior Managerial - Max 52 52

Figure 6: Comparison of Minimum and Maximum Fixed Compensation

Ceo's Salary

compared to a

Fresh MBA -

Number of

respondents

AVERAGE of Top 15 18 times 9

AVERAGE OF THE REST 26 times 23

Figure 7: Comparison of the CEOs Salary to that of an entry level MBA.

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employees, proactively, from time to time, to minimize anomalies

and inequities.

The data was tested to check whether organizations from this

study consciously made an effort to track their compensation and

benefits against others in the market. 60% of the Top 15 indicatedthat they regularly conducted external benchmarking as against

32% of other participating organizations.

In an organization, internal equity can get disturbed in many ways.

Let us take two factors that can cause this quite often. First of all,

when an organization is growing rapidly and there is significant

pressure to hire new employees to keep up with the staffing needs,

recruitment team and hiring managers are sometimes tempted/

pressured to offer suitable candidates higher salary to get them to

accept the offer. This can lead to a situation where existing/loyal

tenured employees, doing the same/similar role and performing at

the same level, are paid less than the new employee(s), who had

to be made an attractive offer to get them to accept the offer and

join quickly.

As we know, for a variety of reasons, employees playing the same/

similar role are not at a single point in terms of their fixed

compensation. They are spread over a range. When in the course

salary increments, an organization offers the same % increase to

different employees doing same/similar job at the same

performance rating, the existing gap between two employees

widens e.g. if one employees fixed annual compensation is INR

500,000/- and that of the other comparable employee (in the

above aspects) is at INR 550,000/- (difference of INR 50,000/-), if

10% increase is given to both, the salary of the former will become

INR 550,000/- and that of the latter will be INR 605,000/-. Thus,

difference will increase to INR 55,000/- (10%). Over the years, this

can keep increasing. Best companies for R&R proactively tracksuch differences that may have arisen during the course of one

year or sometimes two years, and then, with the help of external

and internal benchmarking correct such anomalies, by determining

target salary for each job category and each performance level/

rating and bringing lower paid employees on par with those who

are being paid higher, nor for a sustainable justification, but due to

historical reasons.

The data indicates that 73% of the Best Companies for R&R track

these anomalies. In contrast, only 33% of the other organizations

carry out anomaly tracking procedures with this purpose. These

anomalies, after having been identified are attended to by, 67% of

the Top 15 and only 25% of the rest. This indicates that more

organizations in the Top 15 are consciously aware and are

proactive about establishing internal equity between peers at the

same level in an organization, who have the same performance

rating.

Thus the best companies put in far greater effort to manage

internal equity than the others.

Non Discrimination

Perception on fairness is also affected by an employees perception

on the extent of discrimination faced and observed in an

organization. An organization with a high level of internal equity will

have no discrimination in compensation, benefits and rewards onthe basis of gender, caste, race, language and religion. This

organization will also have conducted an equal pay audit or some

such similar process to ensure effective non-discrimination.

Non-discrimination in compensation, benefits and rewards on the

basis of gender, case, race, language or religion is the third factor

which contributes to internal equity. Companies conduct audit of

their compensation keeping this in mind and this process appears

to be fairly routine for most organizations with 100% practice in

the top 15 and 88% practice amongst other organizations.

Distribution of rewards

Internal equity is demonstrated by the fact that all levels, roles and

functions have the opportunity to earn meaningful amounts (% of

assured compensation) in terms of performance based variable

pay.

Companies in the Top 15 realise that equity is also established

when all types of roles, responsibilities and levels have an

opportunity to be rewarded. Data shows that a higher percentage

of the Top 15 reward all levels and roles in their organization.Compared to 87% of the Top 15, only 35% of other organizations

pay performance incentives or bonus to all employees; including

those who are in non-sales and non-operations roles. Also, 87%

of the Top 15 for R&R extends this performance bonus incentive

to those in non-supervisory (front line) roles, while only 47% of the

others do so. Hence wide distribution of rewards across roles and

levels is a differentiating factor.

Fixed versus variable pay and differentiation

Data has also revealed that the overall trend for all organizations is

that the fixed component decreases while the variable component

increases as one moves up a grade/level. The following table

demonstrates this. What is interesting is the fact that, thepercentages of fixed compensation for the Top 15 at the Senior

Management level is lower than the Rest.

UNITED COLORS OF BENETTON

Communication and branding

SMILE UNLIMITED - It signifies Benetton Indias

commitment to recognize, acknowledge and appreciate

Benetton-ians. Some current and past initiatives under

Smile Unlimited include wall of Fame, Pat on the Back,

Core Value Champion Awards, and Spot Awards,

Outstanding Awards, T 120, Biz Master, idea Champions

etc.

BENETTON UNLIMITED This campaign was launched

as a part of their internal branding exercise and formulate

defined platforms to various HR initiatives. Hence all the

Rewards & Recognition communication is driven

through the concept of SMILE UNLIMITED. Apart from

recognizing the top performers in public, there are

communications send across the organization

highlighting the winners and top performers who have

beenawarded.

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The average increase awarded to employees at all levels appears

to be similar for the Top 15 and the Rest. However, it is interesting

to note that the maximum annual increment that employees can

earn is much higher increase in the Top 15, than the Rest. This can

be seen in the following graph. This means Top 15 for R&R reward

performance and contribution more handsomely and create higher

differentiation for performance than the rest.

Interestingly, we notice a significant dip in the maximum increment

% for Top 15 vis--vis the Rest when moving up to supervisoryemployees from front line employees.

Employee Ownership Schemes especially stock options

Wealth creation/wealth sharing opportunities such as StockOptions/Restricted Stock Units/Stock Purchase Plans, etc., are

made available to the largest number and percentage of employeesregardless of their level, function and tenure - at least a seriousattempt is made to create a sense of participation and ownershipin the organization for the largest number of employees.

Many organizations these days offer stock options, restricted

stock units and other long term retention cum wealth creation

opportunities to members of the senior and top managementlevels. However, we notice that the Top 15 have discovered that itis also important to offer such incentives to those at lower levels,in fact, at all levels in the organization.

The table below highlights the following:

In addition to offering stock options to all levels, 33% of the Top 15

offers stock options to new employees, while only 7% of other

organizations do this.

Grievance Redressal and perception of justice

Perception of fairness with reference to grievance redressal also

determines the perception of equity within an organization.

Companies were asked to state and describe their grievance

redressal process which deals with issues relating to compensation

i.e. grade & salary fitment, performance rating and quantum of

increment and incentive/performance bonus and promotions.

73% of organizations in the Top 15 have formulated such practices

and procedures, while the percentage drops to 42% for other

organizations. Most organizations indicated that this grievance

redressal process could be used by any employee of the

organization irrespective of grade or level. Hence creating a sense

of justice and appropriate feedback channels appears to be a

lesson that the Top 15 have learnt and implemented.

The I- Club committee at Accor Hotels for example, is entrusted

with the job of sensitising management to employee unrest over

any decision made. This committee, along with the grievance

redressal system, is used to convey employee feedback on

rewards and recognition programs to managers and senior

management.

Benefits and Perquisites

Fairness (internal equity) in an organization can also be determined

by the distribution of benefits and perquisites across all levels.

Organizations were also asked to share data on the benefits

offered. They were also asked to indicate the specific levels thesebenefits were offered to. The data has led to the following

interpretation:

Average of variable %

Top 15 Rest

Supervisory 13.5 12.9

Managerial 17.1 16.4

Senior Management 27.9 22.2

Overall 19.7 17.3

FORBES MARSHALL

Safety Awards

During the safety Week celebration i.e. from 4th March

to 11th March every year the organizations holds Poster

and Slogan competitions, which are open to members

and their children. Besides, there is also competition of

innovations and improvements done related to the

safety in the organization. The Best Slogan, Best Poster

and best innovation are awarded on the last day of the

Celebration i.e. on 11th March.

_______________________________________________

NTPC INDIA

Manveeyata Puraskar

It is given to employees who have exhibited random

acts of humanity and kindness at their unit and

surrounding areas. An Appreciation Letter and a gift of

up to Rs 1,000/- are given.

Category of Employees % of Top 15% of the

Rest

Non Supervisory 27% 13%

Supervisory 33% 13%

Managerial 47% 23%

Senior Managerial 60% 28%

Figure 12: Stock options offered to each level

40%

30%

20%

10%

0%

32%

14%

20%

13%

24%

13%

23%

12%

Annual increases in increment

Maximum increment: Top 15 Maximum Increment: Rest

Non Supervisory Supervisory Managerial Senior Managerial

Percentage

increase

Figure 11: Average Annual Increments

Figure 10: Comparison of Variable Pay across levels.

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47% of the Top 15 offers Domiciliary medical support to all

employees while only 28% of the other organizations extends

this benefit to the entire workforce. Those in the Top 15 also

offer a significantly higher amount for this purpose.

The Top 15 offer a vastly higher cover amount for Hospitalizationand Personal Accident Insurance relative to other organizations.

The Manufacturing and Production industry offers the highest

amount under this category in comparison to the other

industries.

80% of the Top 15 offer annual health check-ups to employees

compared to 57% of other organizations. Also, 27% of the

Best, extend this benefit to all employees, irrespective of level

or designation, compared to 15% of the Rest.

Inclusion of family members in insurance is a practice that is yet to

become a trend for the Top 15 as well as other organizations.

Nevertheless, the percentage of the Top 15 who currently extend

medical benefits to family members is significantly higher than thepercentage of other organizations who do so.

Table 1 shows that 33% of the Top 15 offers post-retirement

medical benefits to senior management as compared to only 7%

of the rest. This practice is mostly seen in the Manufacturing and

Production sector as compared to the others. Companies however

are not providing this benefit in a significant way across levels.

The process of actively seeking feedback on practices and policies

is also indicative of an attempt to create a sense of participation

and collaboration within an organization when deciding modifying

rewards and benefits. 30% to 40% of the deciding to modify

participated in this study actively seek feedback from their

employees before introducing, changing, modifying or withdrawing

any HR policy or Benefit. A larger proportion seeks feedback from

senior management than other levels.Hence there is scope here

for companies across the board to do more.

An interesting practice at Philips is Parivartan.In order to involve

employees in the decision making process for changing/

implementing the benefits/policies, Philips has created a progam

called Parivartan. Parivartan means change and this is an

initiative to make employees part of the change that they want to

bring in the organisation. This is a bottom up approach where

employee representatives also called employee champions

collect feedback about new/existing policies and make a proposal

to the management, with its pros and cons. These employeechampions are not only responsible to assess the viability of

implementing the benefit/policy, but are also responsible for

putting in place the guidelines and procedures and communicating

the change. Once the changes are approved the employee

champions ensure that the same is circulated through Philips own

social network page to all employees. The team of Parivartan in

the last year has co-developed 8 policies for e.g., optional leave

work from home, etc.

Based on the above data we can conclude that the organizations

who have been rated as the Top 15 in terms of Rewards and

Recognition make conscious efforts to build internal equity and

transparency in these programmes and practices and have indeed

succeeded in achieving this result far more than the Rest.

FINDINGS ON RECOGNITION

Recognition practices are more effective when they are frequent,

targeted at all employees and demonstrate a true sense of

gratitude. This study measured effectiveness of recognition

practices defined as follows

a) Variety of programmes to recognize and appreciate different

category of employees for different types of tasks, behaviours,

efforts, achievements for which they are recognized.

b) Frequency of programs represented by how often employees

are recognized.

c) Private & public recognition provided to the largest numberand percentage of employees during the course of any period

d) Recognition provided to employees across levels, roles,

functions and locations. This includes employees in revenue

Table 1: Post-retirement medical benefits

Top 15Rest

(60)Overall

All 7% 2% 3%

Supervisory 20% 5% 8%

Managerial 27% 7% 11%

Senior Management 33% 7% 12%

AMERICAN EXPRESS

American Express follows an employee relations

guideline of 21 days advance communication in case ofchanges to the variable pay plan.

This provides employees an opportunity to evaluate the

changes & raise/ clarify any concerns and subsequently

participate in the program by declaring acceptance of

terms & conditions.

_______________________________________________

AMERICAN EXPRESS

The RewardBlue is owned by Global Compensation

and Benefits team. Each Business can custom awards

as per their population. So, awards are not budgeted bynumber, but by the number of people in each business.

_______________________________________________

INTUIT INDIA

Incentive Plans

All employees participate in one of three incentive plans:

Intuit Performance Incentive awards

Customer Care Incentives teamwork focus customer

Sales Commission Plans

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earning & customer/client impacting as well as enabling

support functions.

e) Employees are recognized and appreciated for their loyalty

i.e. long tenure.f) Recognition of results or outcomes along with effort which

take the form of going the extra mile, demonstration of

desired actions and behaviours, adherence and upholding of

values, etc.

g) Inclusiveness of recognition defined by the fact that it flows

from and in all directions not only from seniors to juniors, but

between peers, from juniors to seniors, across functions,

business units & locations, to even outsiders and from

outsiders (such as clients, suppliers, business partners,

service providers, industry peers, etc.).

h) Recognition and celebrations are done for not only work

related efforts and achievements/results, but for achievements

which are beyond work as well .

i) Achievements of family members are also recognized,

appreciated and rewarded publicly within the organization.

j) Family members are informed and thanked and/or invited to

participate in events and functions where employees are

being recognized and felicitated.

k) Forms of recognition i.e. private and public, emotional &

personal as compared to the ones with trophy value.

l) Personalization of gifts and forms of recognition i.e. thought is

given to what the recipient of recognition really likes book(s) to

a bookworm, movie ticket(s) to a movie buff, music CD(s) or

ticket(s) to a music concert to a music lover, coupon to a

restaurant to a foodie, etc.

m) Extent of feedback and inputs sought from supervisors,

managers and employees on what should be recognized and

appreciated.

Variety and frequency of recognition practices

To begin with, the data collected was used to test whether the

best in rewards and recognition did indeed have a wide variety of

recognition practices.

The Great Place to Workguidelines have been used to measure

the variety of practices and programs (see appendix). It can be

seen from the table that the Top 15 companies in rewards and

recognition do indeed have a wider variety of recognition

programmes (80%). In contrast, only about 55% of the remaining

organizations offer a wide variety of recognition programs to their

employees. However knowing this alone, does not give a clear

indication on the frequency of these programs.

The next graph illustrates the frequency of the recognition

programs within organizations that are in the Top 15 this year.

INTERGLOBE ENTERPRISES

UABD (United Airlines Baggage Desk) Champions

How would you feel if you get to sit on a fabulously

decorated workstation designed especially for you?

This amazing feeling is earned by UABD Champions for

their well-deserved performance. UABD floor has a

spot-light workstation where employees who have

performed exceptionally get a chance to enjoy the glory

of championship for a month!

_______________________________________________

INTUIT INDIA

Awards given in 2012: 3557 (31 Service Awards, 63

Employee Referral Awards, 3337 Performance Awards,

126 Wellness Awards).

_______________________________________________

RADIO CITY- 91.1 FM

RING A LOUD

Objective: To be vocal about departments extra ordinary

achievement and share the same with all Radio Citizens.

To express gratitude, and appreciate the efforts and

hard work of functions and teams .

UNITED COLORS OF BENETTON

At United Colors of Benetton, India, those with 5 or 10

years of experience are recognised at the quarterly

Town Hall with certificates. For those with more than 15

years of tenure in the company receive an all expenses

paid holiday with family to a location of the employees

choice in addition to a Certificate from the Director HR

& Managing Director at the yearly town hall. Also, for

someone who has worked at the organization for more

than 20 years, educational sponsorships for his/ her

child are used as a form of recognition.

_______________________________________________

INTEL INDIA

Environmental Excellence Awards

These are awards which are given annually foroutstanding employee achievements in environmental,

energy conservation and pollution prevention programs

and performance. Intel won the #1 place in Green500

and theCEO Justin Rattner came to India especially to

reward the Intel Labs team which contributed to this

award.

_______________________________________________

INTEL INDIA

Volunteering Road Shows

Winners of the Social Initiatives Drive get to showcase

their work to other employees through road shows and

this helps them form larger teams of other interestedcollaborators, often with complementary skill sets to

work on their projects.

Top 15 Extent of Variety of

Recognition Programmes

Yes No

80% 20%

Rest (60) - Extent of Variety

of Recognition Programmes

Yes No

55% 45%

Figure 13: Comparison of Variety between the Best and the Rest.

20


22/30

When we compare this to the other organizations who participated,

it can be seen that while most organizations reward and recognize

employees every year, quarter, and, even every month; very few

organizations follow the practice of rewarding employees regularly

over shorter periods.While monthly/quarterly/annual recognition

has become a common phenomenon; it is the everyday aspect ofrecognition which seems to be the differentiator.

Organizations such as Intel, UCB, etc., have also implemented an

On the Spot recognition philosophy. This not only allows

immediate felicitation for a job well done; but it also ensures that a

culture of appreciation or thanking one another is created. This

also leads to more proximate positive reinforcement of the desired

actions, behaviours and/or outcomes. Most of the Top 15

organizations this year extend this Spot recognition opportunity to

employees as well - where they are allowed to recognize the

efforts of their managers or mentors too. It is important to know

the frequency of recognition programmes in an organization inorder to decide where there is a Sense of Spontaneity in the

nature of rewards given to employees.

Another contributor to this sense of spontaneity of recognition

programmes is the manner in which employees are recognized.

For example, most organizations may acknowledge the efforts of

all employees, by conducting one large event once a year. Some

organizations may also implement initiatives where employees

receive a decorated desk as surprise recognition for good perform

ers. Alternatively, organizations also use simple Post It notes on

subordinates lockers as a means of saying thank you.

Another aspect of an effective recognition programs deals with the

number of opportunities employees feel they have to be

recognized. As a part of this study, organizations were asked to

select the different types of parameters used for recognition at

their workplace. 53% of the Top 15 considers up-to 7 parameters

for recognition whereas 13% of the rest have that many parameters

which they use to recognize employees. Thus, the frequency of

recognition in workplaces is also affected by the exact behaviours,

performance levels, that are rewarded and the variety of techniques

used to do so

The most common methods for recognition as reported by

organizations are:

1. Recognition for long tenure or long service.2. Recognition for outstanding performance and results

3. Recognition of only the Top 3 in each category

4. Recognition for exceeding the laid down norm/performance

level

5. Recognition for demonstrating potential

6. Recognition for carrying out a specific role/for possessing a hot

skill

7. Recognition for carrying out desired actions/behaviours/

initiatives

8. Recognition for adherence to values and principles of the

organization.

Recognise for effort and not only high performance

Outstanding performance and good results are, by far, the most

common basis of recognition used by organizations. Of those who

participated in this study, 89% stated that they recognisedemployees who out-performed the rest. In contrast, only 55%

organizations recognise employees for meeting or exceeding a

laid norm, or new performance level. 67% of the top 15

organization recognise potential, in contrast to the 33% of the

other 60 organizations. Similarly a higher percentage of the Top 15

recognise employees for their skills or for performing in certain

roles than the other participating organizations.

The following table shows that the top 15 base recognition on

more parameters that the rest and thereby create more extensive

and frequent opportunities to recognize.

PAYPAL INDIA

Innovation AwardsLabrats & Innovation is one of the

key features of theorganization. The Labrats and

Skunkworks is a forum where employees have the

opportunity to innovate outside their work sphere. Here,

they can bring their Ideas to life. This is one among the

hot favorites with the employees. With whopping prize

money, this sure a great platform for people to innovate

and bring in their ideas to the organization and t

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2013 Research Paper on Rewards and Recognition

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