MCCIA Report

7/25/2019 MCCIA Report

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Motivation of Employees

through Rewards; Success &

Failure cases

MCCIA Competition


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Acknowledgement

Firstly we would like thank the Mahratta Chamber of Commerce, Industries and

Agriculture (MCCIA) for providing us the opportunity to work on this project. The project wasa great learning experience.

This project consumed huge amount of work, research and dedication. Still, research would not

have been possible if we did not have the support of many individuals and organizations.

Therefore we would like to take this opportunity to express our gratitude to everyone who

supported us throughout the course of this project. We are thankful for their aspiring guidance

and friendly advice during the project work. We are sincerely grateful to them for sharing their

truthful and illuminating views on a number of issues related to the project.

We would also like to express our warm thanks to our project guide, Mr. Philip Coelho for hissupport and guidance.


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CONTENTS

I)

a. Executive Summary

b. Introduction

c. Name of the team leader ( faculty member)

d. Names of the students in the team

e. Contact details of c & d

II)

a. Objective of the project

b. Literature review

c. Research Methodology

d. Data analysis and recommendations

e. Conclusion

f. References


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I) A) Executive summary

Topic: Motivation of Employees through Rewards; Success & Failure cases"

As competition for critical talent increase, organizations look to diversify their employee

engagement and retention strategies. Many organizations realize that an effective Reward andRecognition framework (R&R) is an important tool to drive desired behavior.

Organizations turn to recognition today because it can have a positive impact on employee

performance and engagement. For example, recent Bersin & Associates research on high-impact

performance management found that, in companies in which recognition occurs, the

organizations average score for employee results (an index comprised of employee engagement,

performance and productivity) was approximately 14 percent higher than in organizations in

which recognition does not occur

Across the past few years, five market factors resulted in organizations to focus more onrecognition, including: 1. A volatile economy; 2. The need for greater agility; 3. The flattening of

organizational structures; 4. Technology; and, 5. The rise of the millennial generation in the

workforce.

The project thus tries to find out what does actually motivate the gen Y. What are the key drivers

of employee recognition that impact business outcome? An attempt has been made to understand

it from employer as well as an employee perspective.

I) B) Introduction to the study

To increase the productivity levels many companies try to figure out if it is possible to mitigate

the effects on employee engagement of less compensation increases, longer working hours and

reduced promotion opportunities. An increasing number of companies have tried to use

employee rewards and recognition policy as an important tool to increase engagement and

satisfaction level of employees. Based on research conducted by CEB and World at work

survey some of the top findings are-

71% of highly engaged employees work in organizations in which their peers are

recognized frequently

When senior leaders provided and recognized achievements of goals, the organizationswas nine times more likely to have strong business results

Organizations highly effective at integrating technology into recognition were three times

more likely to report better business results


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Technology should be integrated into a holistic recognition approach

Organizations at the highest level of recognition maturity are nearly 12 times more likely

to have stronger productivity levels.

Over the years, the volatile economy forced organizations to integrate rewards and

recognition policy so as to motivate as well as retain the employees. Thus, companies try to

come up with innovative, low cost yet effective recognition practices.

1.2 Industry Analysis

India is the world's largest sourcing destination, accounting for approximately 52 per cent of

the US$ 124-130 billion market. The country's cost competitiveness in providing IT services,

which is approximately 3-4 times cheaper than the US continues to be its unique selling

proposition (USP) in the global sourcing market. The sector ranks fourth in Indias total

foreign direct investment (FDI) share and accounts for approximately 37 per cent of total

private equity (PE) and venture investments in the country.IT sector provides maximum employment opportunities in our country. There is tremendous

competition in this industry and companies are companies are coming up with new and

innovative methods to motivate, engage and retain their workforce. IT/ITES companies were

selected in the Pune region to understand their ongoing trends in rewards and recognition

practices and what are the expectations of the employees.

Given below are the names that were contacted to understand their practices and the industry

view on rewards and recognition.

Convergys

Accenture

Serco

IBM

Cognizant

Mind Tree Solutions

TCS

Wipro


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GE global servicing

Fidelity

First Source

Jardine Llyod Thompson Group

Homeward

Infosys

Capgemini

WNS


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I ) C) Name of the team leader (faculty member)

Dr Philip Coelho , Adjunct Faculty, SCMHRD

I ) D) Names of the students in the team

Sl No Student Roll No

1 Ankit Gupta 2014B24

2 Anuj Mudwel 2014B26

3 Priyanka Marmath 2014B60

4 Swapnil Karia 2014C16

5 Medha Gupta 2014C25

6 Sree Sai 2014D28

I) E) Contact details

SlNo

Name Phone No Mail ID

1 Dr Philip Coelho Faculty [email protected]

2 Ankit Gupta Student 9873069950 [email protected]

3 Anuj Mudwel Student 9920584756 [email protected]

4 PriyankaMarmath

Student 9158817665 [email protected]

5 Swapnil Karia Student 9904049999 [email protected] Medha Gupta Student 7038097404 [email protected]

7 Sree Sai Student 7709564811 [email protected]


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II) A) Research objective

The objectives of the project are-

To understand what the companies are doing in the presentIT/ITES companies

What are the different rewards that are given What are the existing criteria

Monetary or non-monetary rewards- what companies are doing and what does

actually employee want

How awards are communicated

What are the major impact parameters of such rewards

Do rewards and recognition actually motivate employees? Can the impact be seen on the

top as well as the bottom line of the company

What can companies do to motivate employees?

What different low cost recognition or innovative methods can be used

Why and how companies integrating online point based system for rewarding employees.


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B). Literature Review

What Is Reward and Recognition and Why Does It Matter Today?

Over the past year few years, the volatile economy forced many organizations to do more with

less. As a result, businesses sought new ways to innovate and grow without increasing costs. To

better motivate and retain employees during these trying times, many organizations focused onincreasing employee recognition. But what does this really mean? Our research found that

recognition means different things to different people.

Recognition is defined as the expressed appreciation by one person to another for that persons

behaviors, activities or impact. Recognition may or may not be accompanied by a physical or

financial reward. Recognition programs generally are designed to touch a large number of

employees across the enterprise (e.g., more than just top performers). In many ways, recognition

is part of the total rewardsan employee receives in that they can provide additional financial

recompense for performance. Importantly, recognition should align with an organizations

comprehensive talent management approach, and reinforce critical employee behaviors and

expectations.

Fig Total Reward framework


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Employee Motivation through rewards

There are two main types of motivationintrinsic and extrinsic. Intrinsic motivation occurs

when people are internally motivated to do something because it either brings them pleasure,

they think it is important or they feel that what they are learning is significant.Essentially, the

motivation comes from inside an individual, rather than from any external or outside influence(e.g., rewards).On the other hand, extrinsic motivation comes from outside the individual.

This motivation needs to be tapped differently.

In the context of the workplace, people who are intrinsically motivated in their work will put

forth strong effort in a project simply because it is enjoyable and not because there is a reward.

However, having intrinsic motivation does not mean employees will not also seek extrinsic

rewards available to them. Organizations should understand both intrinsic and extrinsic

motivation, and deploy strategies to drive extrinsic motivation in appropriate situations.

Fig- Maslows hierarchy of needs


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II) C) Research Methodology

The methodology that was adopted for our research was in the form of a questionnaire. A

questionnaire was designed and sent to employees across various IT companies in order to

understand the criteria on which the rewards & recognition is based on, in their respective

companies. Basically this questionnaire aimed at analyzing and assessing the organizationscurrent and potential employee reward and recognition program as a tool for motivating its

employees.

Questionnaire was chosen among various other research tools as enormous amount of

information can be collected from a large number of people in a short period of time. They are

reliable and validity is high since the employee himself fills it. The results of the questionnaires

can usually be quickly and easily quantified. The data collected through questionnaire can be

analysed more 'scientifically' and objectively. Also when data has been quantified, it can be used

to compare and contrast other research and may be used to measure change

The questionnaire stressed on various aspects such as

An overall understanding about the organization and about the employees role in the

organizations functions.

An understanding about the employees opinion relating to how they expect the

organization to recognize and reward them for their efforts.

An understanding about the organizations current Reward and Recognition System and

to what extent it meets the employees expectations.

The details that were captured in the questionnaire are as follows.

Average working age within the company

Managerial level that the employee belongs to

In the employees opinion do these factors really matter - Independence and freedom in

deciding the working hours, Provision for up gradation of skills, Being recognized by

management for their efforts and many more

Mode of communicating the reward

Frequency of recognition that they expect etc

After the collection & compilation of data from various organizations, the Chi square test was

sorted to for analyzing the data.


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Chi-square is a statistical test commonly used to compare observed data with data we would

expect to obtain according to a specific hypothesis. The Chi-square test is intended to test how

likely it is that an observed distribution is due to chance. It is also called a "goodness of

fit"statistic, because it measures how well the observed distribution of data fits with the

distribution that is expected if the variables are independent. The Chi Square statistic compares

the tallies or counts of categorical responses between two or more independent groups. It is

designed to analyze categorical data. That means that the data has been counted and divided into

categories. It will not work with parametric or continuous data.

Another way to describe the Chi-square test is that it tests the null hypothesis that the variables

are independent. The test compares the observed data to a model that distributes the data

according to the expectation that the variables are independent. Wherever the observed data

doesn't fit the model, the likelihood that the variables are dependent becomes stronger, thus

proving the null hypothesis incorrect.

Other method adopted was conducting interviews. HR managers as well as heads of differentdepartments were interviewed to understand the ongoing trends and what are the major

challenges they face in this process.


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D. Data Analysis

4.1 Employee survey data

The survey questionnaire was filled by employees from different IT/ITES companies like

Accenture, TCS, Infosys, Capgemini, Wipro, Reliance, IBM, Cognizant, Newgen softwaretechnologies , Ericsson, Adobe etc.

Analysis were done on the data collected

Reliability test

Case Processing Summary

N %

Cases

Valid 71 100.0

Excludeda 0 .0

Total 71 100.0

a. Listwise deletion based on all variables in the

procedure.

Reliability Statistics

Cronbach's Alpha N of Items

.898 9

A high value of cronbach alpha denotes high scale reliability. In this case as the value is 0.898(high), so the data collected is highly reliable.

On asking what kind of recognition they would prefer we got the following response.

Mean denote the mean rankings given by the respondents to each kind of recognition.

Lower the ranking mean , higher is the preference for the corresponding kind of recognition.


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The above table suggests that with means of 3.211 and 3.394 , the most preferred kinds of

recognitions are Senior Management visibility and Certificate of Appreciation respectively.

It can also be concluded that with the highest ranking mean of 4.211 , Experience gift vouchers

are the least preferred mode of recognition.

Question were asked to understand the motivational factors for the employees

Opportunities for career growth and career development is the most important motivating factor for

employees

Also maximum people preferred town hall meetings and wanted to be recognized by both

supervisors as well as managers

When asked about ideal frequency major percentage was inclined towards quarterly recognition

methods.

Motivational Factors at Job Extremely Important

Somewhat

Important

Not at all

Important

Opportunities for career growth andcareer development 74.60% 22.50% 2.80% 100%

Possibility to achieve promotion 69% 27% 4.20% 100%

Being recognized by management for

your efforts 67.60% 31.00% 1% 100%

Provision for up gradation of skills 67.60% 32.40% 0% 100%

Bonus and financial incentives 64.80% 29.60% 5.60% 100%

Independence and freedom indeciding the work hours 60.60% 32.40% 7% 100%

More challenging work tasks 56.30% 40.80% 2.80% 100%

Receiving formal recognition for yourefforts in making difference 52.10% 45.10% 2.80% 100%

Being recognized by peers and co-workers for your efforts 50.70% 39.40% 9.90% 100%


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4.2 Analysis of ongoing trends

1. Standardization of rewards and recogni tion

57.7%

23.1%19.2%

39.0%

10.0%

51.0%

Company-wide Department-wide Company- and Department-wide

Our Benchmarking Exercise WorldatWork Survey

Organizations having Company- or Department-wide R&R Framework

Observation

Majority of organizations contacted by us have organization-wide R&R system

At a global level, majority of organizations have hybrid R&R, where some rewards are consistent

across organization, while others vary by department


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2. Cri teri a on which rewards are being given

Prevalence of Spot Awards

Observation

Prevalence of Recognizing Various Activities and Behaviors

100.0%92.0%

62.0% 58.0%

35.0%23.0%

12.0%

63.0% 70.0% 59.0% 63.0%48.0%

56.0% 52.0%

Individual

Performance

Length of

Service

Team

Performance

Innovation Company

Values

Customer

Satisfaction

CSR

Our Benchmarking Exercise CEB Survey

Observation

Awarding performance and innovation is most prevalent in the industry under consideration

Rewarding on the criteria of company values and/or CSR is less prevalent as these do not have a direct and

visible impact on the companys performance

Introduce spot awards to incentivize employees proactively and reward them in a timely manner

Managers would be able to use Spot Awards as a tool to drive desired employee behavior


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Prevalence of Peer Recognition

69.0%

85.0%

66.0%

Our Benchmarking Exercise CEB Survey WorldatWork Survey

69.0%56.0%

42.0%

Our Benchmarking Exercise CEB Survey WorldatWork Survey

Organizations Having Spot Awards in their R&R Framework

N = 26 N = 374N = 27

ObservationIntroduce peer recognition to increase employee engagement in rewards and recognition

Peer recognition will help recognize small positive critical incidents that get missed by

managers

Organizations Having Peer Awards in their R&R Framework

N = 26 N = 374N = 27


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5. Prevalence of redeemable Points-based System to administer R& R

Observation

4.3 Integration of online point based system

Many companies are adopting the trend of point based reward system. Companies like TCS have

developed a very robust system.

38.0%

11.0%14.0%

Our Benchmarking

Exercise

CEB Survey WorldatWork Survey

Implement redeemable points-based system to administer rewards and recognition programIt will enable employees to choose their own rewards, hence making the R&R more

meaningful

Organizations Using RedeemablePoints-based System in their R&R

N = 26 N = 348N = 27

Employee

Accumulate

reward points

Employees are allocated

reward points associated

with the reward they have

Employees redeem the

reward points against

products/coupons/vouche

Win any of the

rewards mentioned

in the R&R

Reward points

deducted from

employees


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Advantages of redeemable based point system are-

Employees prefer monetary awards to recognition; further, rewards of lower value do not

motivate significantly. Redeemable points-based R&R system lets employees

accumulate points from a number of rewards and then redeem those for a high-value

product; this helps is making even the smallest of rewards more motivating

The redeemable points-based system will also be extremely easy to administer

The employees can choose rewards according to their own preferences; this helps in

making the rewards more meaningful

It will also help drive consistency in performance as employees will look to accumulate

more points to be able to redeem higher value rewards


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E. Conclusion

5.1 Guide to recognizing Employees work

Managers are the ones who have to supervise as well as direct other people. They are in the

unique position to make others aware of the great things your employees have accomplished.

After interviewing various managers it was found out that recognizing employees is not an easy

task. Many managers find it tough to understand what the employees want. Managers have clear

and immediate visibility into their employees contribution and successes. Recognizing

employees work is easier than done. It is often difficult to pick up the right words at the right

time to express the gratitude. It should always be done in the effective way to motivate them so

as to get best out of them.

The research by a leading organization states that if the managers are effective at recognizing

employees, they can boost their performance by 20%.

The three major guidelines every manager should keep in mind is

Recognize right actions and behaviors

Link recognition to specific actions or behaviors

Brainstorm ways to recognize employees work

5.2 Low Cost Recognition Methods followed by company

This is the era of innovation and companies are coming up with various low cost recognitionideas. Different ideas can be

Token of appreciation Acknowledging employees actions and behaviors through

meaningful words of appreciation can boost employees emotional quotient leads to

improved efforts

Public acknowledgementProviding employees in the public forums actually help them

to increase their efforts and performance

Development Opportunities - Providing employees with job related opportunities such as

completing a special assignment helps to impact their commitment levels and intent to

stay. Awards and perksGiving employees low cost awards and perks make them feel valued.

Perks such as baby sitting etc. also alleviate personal concerns and ensures that

employees remain focused on their jobs


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5.3 Concluding Note

Employee reward and recognition is an important tool for two major reasons

It helps to improve employee engagement, which leads to higher productivity and

retention rates

It helps the organizations to reinforce right kinf of behavior, goal and culture

The reward and recognition strategy should be (S)SMART. i.e.

S- Supportive of Goals and values

S- Sincere

M- Meaningful

A- Adaptable

R- Relevant

T- Timely

This (S)SMART checklist makes sure that R&R program of the company drive the correct

behvaiour and no effort of employee is left unrecognized thereby contributuing to its increase in

productivity.


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F. References

Unleashing Excellence: The Complete Guide to Ultimate Customer Service, Second

Edition, Dennis Snow and Teri Yanovitch

Employers Award a Wider Variety of Incentive Pay, SHRM (March 2014)

Employee Recognition Survey Spring 2013 Report, SHRM/Globoforce (2013)

Trends in Employee Recognition, WorldatWork Underwritten by ITA Group (June

2013)

Benchmarking Rewards and Recognition Programs, CEB Corporate Leadership

Council (2012)

Bersin & Associates Employee Recognition Maturity Model, Bersin& Associates

Deloitte (September 2012)

Making recognition and rewards matter Five Practices to Drive Better Business

Results, Bersin & AssociatesDeloitte (September 2012)

The Employee Performance Paradox: Balancing Execution with Impact, CEB

Corporate Leadership Council (2015)

Peer Pulse: Integration of Reward and Recognition Programs, CEB Corporate

Leadership Council (2013)

Low- and No-cost Recognition Tactics, CEB Corporate Leadership Council (2013)

Guide to Recognizing Employees Work, CEB Corporate Leadership Council (2010)

Recognizing and Rewarding Employees, CEB Corporate Leadership Council (2010)

How to Recognize and Reward Employees Second Edition, Donna Deprose,

AMACOM - American Management Association

The Changing Face of Reward, Hay Group (2013)

Rewards and Recognition: 2014 Trends Report, Accelir (2013)

Articles from Harvard Business Review

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