Harmonising Rewards &
Motivation
Aneeta Madhok, PhD, CMC
Dean
Center for Human Resources
S.P. Jain Center of Management
Email – [email protected]
www.hrsummitme.com
Some Facts About Pay
Differentials
According to Mercer’s survey:
• Highest-performing employees
(12 percent of the workforce) are
expected to receive base pay
raises of 5.7 percent in 2007.
• Average performers (52 percent
of the workforce) are expected to
receive base pay raises of 3.5
percent in 2007.
• Weakest performers (3 percent
of the workforce) are expected to
receive base pay increases of
1.7 percent in 2007 As cited in:
2008 Pay Projections: Increased Ties to Performance
By Stephen Miller, August 2007
www.shrm.org
Some Facts About
Incentives
Manage Profess Officer/
ment ional clerical
Highest
Rated 27% 20% 15%
Middle
Rated 20% 14% 11%
Lowest
Rated 10% 7% 6%
As cited in:
2008 Pay Projections: Increased Ties to Performance
By Stephen Miller, August 2007
www.shrm.org
Essentials of an Incentive
System
• Clear link between individual
goals and incentives
• Methods of differentiating
performance differentials
• Final review by impartial arbiter
• Grievance process to address
employee concerns
• Annual publication of ratings and
pay decisions
• Employee surveys to measure
satisfaction with the system
US General Accounting Office Guidelines
Pay-for-performance
Doesn’t Always Pay Off
“Pay-for-performance may
have a natural life cycle
that managers are
unaware of”
– Michael Beers, HBS
Professor
“Pay-for-performance can
cast a pull over self-
esteem, teamwork and
creativity”
– Teresa Amabile
Back to Basics on
Motivation
• Extrinsic Motivation works in
the short run
– Compensation (fixed, variable,
long term & short term
incentives)
– Benefits
• Intrinsic Motivation creates
harmony for long term
through
– Challenge
– Control
– Cooperation
– Recognition
Challenges
• Extrinsic Motivation
– Performance metrics (KPI’s
and KRA’s) are necessary
as a basis
– Individual measures
usually do not encourage
teamwork
– May encourage unhealthy
rivalry
• Intrinsic Motivation
– Requires massive efforts
and a personal touch
– Job Design, relationship
management and
teamwork hold the key
Total Rewards
• Total Rewards goes beyond Pay for Performance
• Incentive Plans are only a part of the solution and
effective in the short term
• Attracting, retaining and
engaging talent through
providing career and
personal growth
opportunities is the key to
harmony
Nature’s Way
The story of
the wise old
man
Lessons from the Wise
Man
• It is important to
differentiate high
performers from average
and poor performers
• Average performers are
those who meet
expectations and are
valuable. This message
is important
• Poor performers need to
be brought in line through
Total Rewards strategy
High Performers (A)
• Maverick personalities
• Driven by Achievement
• Don’t always go by the
rule book
• Usually on the periphery
of the system
• They make a quantum
difference
• Drive high-performing
organisations
Average Performers (B)
• Valuable people who meet
organisational goals and
expectations
• They are the backbone
• They need to be recognised
and valued
• Mentoring and coaching
inputs work well with
average performers to
motivate and anchor in the
mainstream of the
organisation
Poor Performers (C)
• Message of development
and improvement in
performance levels needs
to be given
• Need to invest in
turnaround
• Incentive plans help in
bringing their
performance to
acceptable levels
• Need intensive and
special performance
counselling
In Totality
• A total rewards
strategy that works
takes into account
extrinsic and intrinsic
motivation
• It is important to
differentiate High,
Average and Poor
performers
• Team performance
must be rewarded
Creating Harmony
Total Rewards: All of the
tools available to the
employer that may be
used to attract, motivate
and retain employees.
Total rewards include
everything the employee
perceives to be of value
resulting from the
employment relationship.
Contact at:
Aneeta Madhok, PhD. CMC
Dean
Center for Human Resources
Block 5, Academic City
Dubai, UAE
[email protected]
