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UNIT-3 compensation management (1).pptx
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- 2. What Is PerformanceManagement? • Performance management is defined as the process of continuous communication and feedback between a manager and employee towards the achievement of organizational objectives. • Performance management is the process of continuous feedback and communication between managers and their employees to ensure the achievement of the strategic objectives of the organization. • The goal is to ensure that employees are performing efficiently throughout the year, and in the process, address any issues that may arise along the way that affect employee performance. • Performance management is a set of processes and systems aimed at developing employees, so they perform their job to the best of their ability. The goal is to help employees build on skills that enable them to perform better in their roles, reach their potential, and boost their success while also accomplishing the strategic goals of the organization. • Effective performance management establishes a continuous conversation between employees, managers, and HR.
- 3. • Performance managementis the process by which an organizational leader, manager or supervisor monitors and evaluates the work of the employees they're responsible for overseeing. It functions as an alternative to the standard employee appraisal system by allowing managers to assess their employees' performances in a more comprehensive way. A successful performance management strategy is often continuous, meaning that managers have numerous opportunities to correct and reward team members. • Performance management also allows team members many opportunities to improve their work. Effective performance management can help empower teams to work toward achieving both long- and short-term company goals and objectives. Typical performance management programs use tools to measure goals, objectives and milestones and ensure that employees continue to work productively.
- 4. Performance management goals •Performance management aims to develop the skills and competencies employees need to improve performance and success in their job. In turn, these skills help the organization meet its goals. • Performance management goals include setting performance expectations so that employees have clarity on what is expected of them and what they can gain by meeting these expectations, including compensation, rewards, or even a promotion. • Continuous, real-time feedback helps employees understand where they are, learn, self-correct, and grow. They can constantly improve their performance at work, providing them with a greater sense of accomplishment. This equips the organization with a skilled, engaged, and qualified workforce. • Performance management improves individual and team performance which helps businesses achieve their goals and objectives. For example, if a business objective is to grow revenue, effectively managing the performance of your sales employees can help you achieve this. • Performance management also allows employees to see how their individual goals align with the company goals and understand how they contribute to achieving those, encouraging engagement.
- 5. 7 reasons whyperformance management is important • Performance management can be important for helping managers and employees align their goals and expectations. Here are seven additional reasons why it's an important mechanism for measuring employee performance: • 1. It helps with goal setting • Performance management can make it easier for managers and leaders to develop a set of realistic goals to measure employee progress. A good performance management strategy also allows employees to set practical goals for themselves. Consider preparing an updated job description for your team members and discussing how you'd like them to progress. You can then work with your team to establish SMART goals that align with their current roles and career objectives. These goals have the following criteria:
- 7. • These goalshave the following criteria: • Specific: It's important that your team's objectives be as specific as possible. For example, one team member might aim to secure a senior assistant role within the company, while another might prefer a promotion as a project leader. • Measurable: Each goal needs boundaries that your team members can quantify. For example, completing a training session and mastering a skill by a specific date are easy goals to measure because they provide you with a timeline. • Achievable: It's also necessary for your team's goals to be realistic. For example, accomplishing a promotion during the next year may be more attainable than transferring from an entry-level role to a chief executive position in just a few months. • Relevant: It's important that every goal be relevant to what your team members truly want to accomplish. For example, each skill that your team members aim to master preferably relates to the ultimate goal they want to achieve. • Time-based: Completion dates can help your team members achieve their objectives on time. For example, an employee may decide to earn an administrative certification within the next six months to support their wider goal of advancing into a new position.
- 8. • 2. Itallows you to better engage your team • A successful performance management system can help increase team engagement and encourage an open dialogue between managers and those they supervise. You can increase team engagement by establishing weekly team meetings or monthly check-ins with individual employees. Before you meet with your team, develop a process for measuring their engagement and motivation levels. Consider asking them to complete surveys on a regular basis and offering them the opportunity to write reviews after completing a project. • 3. It can improve productivity • Besides helping you improve team engagement, adopting a performance management program can help you encourage and inspire employees to perform their best work, allowing you to improve productivity. Improved productivity can help reduce stress in the workplace and allow employees to retain their focus more easily and achieve more in less time. When advising team members about SMART goals, discuss how they can track their output and measure their progress. In addition to facilitating regular progress meetings, collect data to monitor and analyze team productivity. This allows you to offer more objective feedback and guidance to your team.
- 9. • 4. Ithelps establish transparency • By sharing organizational goals and helping teams develop their own SMART goals, performance management can help you increase transparency in the workplace. To create a performance management system that supports transparency, outline the tasks that employees can complete and demonstrate how they can prepare to achieve a positive outcome. This helps provide them with the structure necessary to succeed. • Informing employees of the motivations behind the performance management process can help them better optimize its use. • 5. It can help employees make improvements • Continuous performance management allows employees to better understand how they're performing at all times. As a result, they may have a better idea of how to manage themselves, set goals and plan for the future. Performance management allows managers to monitor their employees and learn who may require additional training or guidance. Managers who successfully adopt a performance management program can also make more informed improvement plans for their employees. It can also offer them insight into how their team is progressing, allowing them to allocate resources accordingly.
- 10. • 6. Ithelps recognize the high performers • A good performance management system allows managers to identify the employees who perform their jobs well and offer them recognition and rewards. This can help motivate them to continue to optimize their performance while also inspiring other employees. You can recognize team members during weekly check-ins, at the end of a project or after they've accomplished a task or achieved a goal. • 7. It can help you with leadership development • Performance management can be a useful way to allow employees to further develop their leadership skills. You can use a performance management system to encourage them to become more accountable while also reinforcing accountability among team members. You can also identify potential leadership qualities during meetings with your team members and help them further develop those qualities by taking advantage of training programs or workplace development workshops. By offering support and feedback throughout the performance management process, you can enable team members to perform at their best and offer consistent value to the company.
- 11. Common steps inperformance management • Setting expectations. Performance management begins with establishing clear, specific, and measurable expectations for your people. This involves defining job roles, responsibilities, and performance goals. • Continuous feedback. Regular feedback is essential for professional growth and development. This entails ongoing communication between managers and team members to discuss progress, address concerns, and offer guidance. Timely feedback ensures that people can make the necessary adjustments to meet performance expectations. • Performance evaluation. Regular performance evaluations are an important part of performance management. During these evaluations, team members are assessed based on their performance against the established expectations. • Professional development. HR leaders and managers can collaborate with individual contributors to create development plans—which may include training, mentoring, and additional responsibilities—to enhance skills and competencies. • Recognition and rewards. Recognizing and rewarding exceptional performance maintains people’s motivation and engagement.
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- 13. The Performance ManagementCycle • 1. Planning • This stage entails setting employees’ goals and communicating these goals with them. While these goals should be disclosed in the job description to attract quality candidates, they should be communicated once again when the candidate becomes a new hire. Depending on the performance management process in your organization, you may want to assign a percentage to each of these goals to be able to evaluate their achievement. • 2. Monitoring • In this phase, managers are required to monitor the employees performance on the goal. This is where continuous performance management comes into the picture. With the right performance management software, you can track your teams performance in real-time and modify and correct course whenever required.
- 14. • 3. Developing •This phase includes using the data obtained during the monitoring phase to improve the performance of employees. It may require suggesting refresher courses, providing an assignment that helps them improve their knowledge and performance on the job, or altering the course of employee development to enhance performance or sustain excellence. • 4. Rating • Each employees performance must be rated periodically and then at the time of the performance appraisal. Ratings are essential to identify the state of employee performance and implement changes accordingly. Both peers and managers can provide these ratings for 360-degree feedback. • 5. Rewarding • Recognizing and rewarding good performance is essential to the performance management process, as well as an important part of employee engagement . You can do this with a simple thank you, social recognition, or a full-scale employee rewards program that regularly recognizes and rewards excellent performance in the organization.
- 15. • Benchmarking ismeasuring key business metrics and comparing them to metrics from internal departments or competitors. Implementing this practice can help a company understand its strengths and weaknesses to optimize internal processes. Though organizations can have various approaches to benchmarking, standard goals include increased efficiency, revenue and customer and employee satisfaction. • Consistent benchmarking can help you: • Improve processes and procedures. • Gauge the effectiveness of past performance. • Give you a better idea of how the competition operates, which will help you to identify best practices to increase performance. • Increase efficiency and lower costs, making your business more profitable. • Improve quality and customer satisfaction.
- 16. 7 benefits ofbenchmarking in business • 1. Increase efficiency • Performing regular benchmarks contributes to a company's overall effectiveness and efficiency by allowing it to identify potential areas of improvement internally. This is true for both sales and manufacturing businesses as well as service- oriented companies. Components that benchmarking can help improve upon include sales, marketing, support and advertising. • 2. Set clear business goals • Performing regular benchmarks can allow you to set clearer business goals for your employer. Understanding why the competition is successful can also give you insight that may help create measurable goals by defining success, developing innovative strategies and effectively monitoring your progress towards each goal. As you monitor your progress, be sure to make adjustments when necessary to accommodate changes in the market or changes within the company.
- 17. • 3. Providenew opportunities for discovery • Another reason benchmarking in business is important is that it gives you a way to discover opportunities for increased growth and success. This is especially important if your company is stuck or not moving forward the way you want. Performing benchmarks allows you to identify areas for improvement to get the company on par with the growth and success of other businesses in your industry or niche. By assessing what other companies are doing successfully, you can develop a plan to boost performance and take advantage of opportunities. • 4. Increase sales performance • Strong sales significantly increase a company's overall success, but not having the appropriate insight to understand your sales performance can create a barrier. Benchmarking allows you to assess your sales figures and compare them to the most successful businesses in your niche or industry. For example, you could examine how much another company is selling, how many people are on their sales team, how many sales teams they have and whether your competitors are working with other major companies in partnerships. • 5. Motivate employees • Regular benchmarking in business also provides a great opportunity to rejuvenate employees and increase their overall motivation and contribution to the organization. The best benchmarking to improve employee motivation is benchmark tests that evaluate the competition's departments. You then compare these results to the departments within your company and set goals to match the competition.
- 18. • 6. Betterunderstand the competition • An apparent reason why benchmarking in business is important is that it allows you to understand your competition better. Understanding their methods of operation and what contributes to their overall success will let you expand your current operations and increase overall productivity and performance. While a competitor's metrics can influence its operations, they can also help define its unique value proposition. • 7. Improve product quality • You can also use benchmarking to assess your current product quality and improve it. You might analyze how durable a competing product is or measure the customer satisfaction of the competitor's consumer base. From there, you can source the appropriate materials for your items and revise your approach to customer service to increase overall satisfaction.
- 19. Types of benchmarkingin business • Performance benchmarking: The process of identifying the difference between anticipated and desired results by measuring key performance indicators • Internal benchmarking: The process of comparing data from departments within a single organization • External benchmarking: The process of an organization's data with data from a competitor • Practice benchmarking: The process of collecting qualitative information about a specific business operation • Strategic or competitive benchmarking: A strategy in which a business attempts to emulate specific standards of world-class organizations
- 20. • There aremany different types of benchmarking that fall into three primary categories: internal, competitive, and strategic. • Internal benchmarking • If other teams or organizations within your company have established best practices in processes similar to yours, internal benchmarking involves analyzing what they are doing so you can find areas where you can improve and be more efficient. For example, you could compare the performance of one warehousing and shipping site against another warehousing and shipping site. The site with superior performance simply needs to share their processes and procedures so that the entire company benefits from increased performance. • Competitive benchmarking • This type of benchmarking is a comparison of products, services, processes, and methods of your direct competitors. This type gives you insight into your position within your industry and what you may need to do to increase productivity. For example, you can compare the customer satisfaction of a competitor’s product to yours. If your competitor is getting better customer reviews, you need to analyze what the difference is and figure out how to improve the quality of your product. • Strategic benchmarking • Use this type of benchmarking when you need to look beyond your own industry to identify world-class performance and best practices so you can look for ways to adapt their methods to your procedures and processes.
- 21. 8 steps inthe benchmarking process • 1. Select a subject to benchmark • What to benchmark is just as important as how to benchmark it. Executives and other senior management should be involved in deciding which processes are critical to the company’s success. Prioritize the processes based on which metrics are most important to all stakeholders, with an emphasis on processes or functions that are easily quantifiable. After prioritizing, select and define the measures you want to collect. • 2. Decide which organizations or companies you want to benchmark • Determine if you are going to benchmark processes within your own company, a competitor, or a company outside of your industry. • It may be hard to collect all the data you want if you benchmark a direct competitor. So you should select several different organizations to study in order to get the data you need. Gather information from several sources to get the most detailed information about the organization you select to study. • 3. Document your current processes • Map out your current processes so you can identify areas that need improvement and more easily compare against the chosen organization.
- 22. • 4. Collectand analyze data • This step is important—but it can prove difficult when you are trying to gather data from a competitor because a lot of that information may be confidential. Gather information through research, interviews, casual conversations with contacts from the other companies, and with formal interviews or questionnaires. • You can also collect secondary information from websites, reports, marketing materials, and news articles. However, secondary information may not be as reliable. • After you have collected enough data, get all stakeholders together to analyze the data. • 5. Measure your performance against the data you’ve collected • Look at the data you’ve collected side by side with the metrics you gathered from your analysis of your own processes. You may want to layer your performance metrics on top of your process diagrams or map out your competitor’s processes to more easily see where you’re falling behind. As you analyze the comparisons, try to identify what causes the gaps in your process. • 6. Create a plan • Create a plan to implement agreed-on changes that you have identified as being the best to close performance gaps. Implementation requires total buy-in from the top down. Your plan must include clearly defined goals and should be written with the company’s culture in mind to help minimize any pushback you may get from employees.
- 23. • 7. Implementthe changes • Closely monitor the changes and employee performance. If new processes are not running smoothly as expected, identify areas that need to be tweaked. Make sure all employees understand their jobs, are well trained, and have the expertise to complete their assigned tasks. • Document all processes and make sure all employees have access to documentation and instructions so that all are on the same page working toward the same goal. • 8. Repeat the process • After successfully implementing a new process, it’s time to find other ways to improve. The benchmarking process is one of continual improvement and iteration. Review the new processes you’ve implemented and see if there are any changes that need to be made. If everything is running smoothly, look to other areas or more ambitious projects that you may want to benchmark and start the process again. • When you correctly implement and follow the continuous practice of benchmarking, your company will grow, and you will keep up with (or even surpass) your competitors.
- 24. What are performancestandards? • Performance standards are guidelines the employers give to their employees to outline what the company expects of them as a part of its team. They explain job duties and qualities and to what quality the employee should complete them. Though employers use performance standards for all employees, they typically give these guidelines to new hires to help them understand their roles and responsibilities. Employers may also use performance standards to help evaluate team members. Performance standards should treat all employees equally and should be specific, measurable and easy to understand. There are three common levels of performance management: • Strategic: This level refers to goals on the organizational, or company, level. Strategic standards should align with the company's vision, objectives and values. • Operational: This level of performance management emphasizes how departmental activities work to achieve the company's goals. Employers may make performance standards that apply to the company's departments. • Individual: This level focuses on the individual employee to ensure that all employees are performing their tasks well. Individual standards evaluate employees' work and seek to improve the quality of their performances.
- 25. Types of performancestandards • Professionalism • This standard refers to how an employee acts within the workplace. Many companies value a respectful and serious workplace, which means that employees should act professionally. Professionalism in the workplace may include being calm and composed, polite and supportive toward other team members. It could also refer to other aspects of workplace culture, such as being punctual and dressing according to the company's dress code. Professionalism can be especially important in a company where employees work as a team or work with customers. • Example: The employee demonstrates a professional demeanor in the workplace, including both their actions and language. The employee also maintains respectful relationships with other employees, management and customers.
- 26. • Teamwork • Employersmay include performance standards regarding teamwork if their employees often work together. Teamwork is the ability to collaborate and work well with other people to complete certain tasks. In a work environment where employees may complete projects together, teamwork is a valuable performance standard to include. Companies may expect employers to help each other when necessary. For instance, employees have to be willing to share work-related information to their team when doing a project. Employers may emphasize that the workplace should be collaborative and employees are committed to helping each other. • Example: The employee actively helps other team members when necessary and appropriate. Employees may either ask for help or provide help to other employees.
- 27. • Communication • Thisis the ability to convey messages or information clearly to other people. Communication refers to both written or oral conversation, such as writing an email or presenting on a topic. This requires clear language and strong writing skills. Employers may include this performance standard to promote open lines of communication between employees. In many situations, communication is a valuable skill for an employee to have because it can increase productivity and collaboration. When employees work together, they often communicate to complete a task. Communication can also refer to speaking with clients, which is essential to customer service positions. • Example: The employee clearly communicates with managers, team members and customers. The employee communicates accurate information when appropriate. • Time management • This is the ability to complete a set of given tasks by a deadline. Time management often requires organizational and prioritization skills. Employers may include time management as a performance standard to show that they expect employees to complete their duties by an indicated time. Time management is an important performance standard because many jobs require their employees to perform and complete multiple tasks during the workday or week. Employers can use this performance standard to evaluate how their employees spend their time while working. • Example: The employee finishes their duties by a given deadline. The employee uses prioritization to determine which tasks they should complete first in order to finish their projects on time.
- 28. • Problem-solving • Employersmay add problem-solving as a performance standard as well. Problem-solving is the ability to assess an issue and provide possible solutions based on the situation. This is a common standard because most jobs require problem- solving skills regardless of the industry. For example, a dietitian may have to problem-solve to create a diet that works for a client's specific needs. A hiring manager may use problem-solving to create corresponding schedules for multiple employees. Problem-solving standards can evaluate how an employee reacts and resolves a challenge. • Example: The employee demonstrates strong problem-solving skills when faced with an issue. The employee can think of creative solutions and is flexible when problem-solving. • Accountability • This refers to taking responsibility for one's actions. Accountability is an important performance standard because it shows employees that they have ownership over their decisions. This performance standard also informs employees that the company expects them to work independently at times. Employers typically value when employees are determined and can complete tasks without direct management. Accountability can also mean that employees understand their roles and responsibilities as a team member. Employers can use accountability to evaluate an employee's independence and ability to take responsibility. • Example: The employee takes responsibility while at work, meaning they take ownership of their actions and obligations. The employee is able to work independently with limited supervision from management.
- 29. Performance Measurement • Performancemeasurement is an essential tool in the workplace that allows supervisors and managers to assess employee performance to decide whether they're reaching the company's expectations. The measurement technique differs depending on the work environment, the type of company, and, to some extent, the employee's occupation. Learning more about how to assess performance can help you enhance the operations of the company you work for. • Performance measurement is a method of evaluating employees and providing feedback on their job performance that managers and supervisors use. The gathered data from measuring performance enables evaluation and feedback to take place. This approach aids in communicating expectations and requirements to employees, making it more straightforward for them to fulfil their objectives. • Managers may provide constructive criticism during a performance management review to encourage their employees. When employees aspire to do their best, they're more likely to gain the knowledge, expertise, tools and support and take personal responsibility for their work performance.
- 30. Benefits of measuringperformance • It's capable of identifying underperforming individuals and teams. When a performance assessment procedure is in place, it's much easier to identify underperforming individuals and teams since their managers can directly compare their performance to the productivity of others using objective means. • It aids in staff motivation. Employees may have a greater incentive to work harder if they know their supervisors are watching them and measuring their performance. Employees may perceive a clear and motivating end goal. • It has the potential to enhance communication. Managers and their direct reports have fewer opportunities for misinterpretation when reliable and objective performance assessment measures are in place. A performance management system can clearly define each action with comprehensive instructions that may lead to success, so there's no question about what every person can accomplish.
- 31. • It allowsfor the recognition of outstanding achievers. Failure to recognise exceptional performers can often occur because managers incorporate the individual's valuable contributions into overall team performance. It's possible to locate and reward the best performers in a group by establishing personalized performance criteria that increase an organisation's chances of retaining its most effective employees. • It establishes a recognizable chain of command. A performance assessment clarifies each employee's and manager's role within the organization. It minimizes uncertainty within a team when members believe they're in control and assume a leadership position. • It may help in rebalancing the team. If you're a team leader, evaluating your team's performance provides an excellent chance to adjust team duties. If a team member excels at a specific skill or job, you might align your assignments to concentrate on that specialization.
- 32. Methods to measureperformance • Performance standards • Using performance standards helps define the company's expectations before the beginning of each week or month. Depending on the sector and profession, employers may use this method to determine standards and enforce daily, weekly, monthly or annual targets. This may encourage employees to set new long-term objectives and work harder to accomplish them. • Management by objectives • Employers can use management by objectives to assess team members in managerial roles. This strategy may include individual sessions with employees to learn about their ambitions. During these meetings, employers can identify helpful tools to assist the employee in reaching those objectives. • Employers may also establish employee deadlines depending on the type of objectives and management role. For example, if the employee's goal is to advance to a more senior position, the employer may offer skill development training to enhance leadership traits.
- 33. • Rating system •A rating scale for performance assessment may use a numerical rating system to identify significant strengths in the workplace. A rating of one indicates the lowest level of effort, while a rating of five might show high levels of motivation and successful job completion. For instance, when management is evaluating the job performance of their staff, they may use the numerical scale to distinguish between areas of improvement and efficient teamwork skills. • Self-assessment tasks • Self-evaluation tests with multiple-choice answers, essay questions and personality quizzes can help employees quantify their work performance. This method may assist employees in identifying areas for development or objectives they aim to attain on the job. Managers often encourage employees to assess their actions since this allows individuals to evaluate their contributions to achieving organizational goals and their long-term professional development. • 360-degree feedback • Employers can use this method to collect comments, thoughts and self-evaluations from staff members about their roles and responsibilities within the team. A company may invite employees to provide constructive criticism of one another to assist everyone in performing better. Once management has collected enough data, they may use it to conclude issues like employee satisfaction, productivity and areas for development.
- 34. How to measureperformance at work • Reviewing personal accomplishments and areas for growth may inspire employees to work towards common goals and uncover new avenues for development. You can select approaches highlighting areas for improvement, desired talent, critical strengths, levels of satisfaction and professional skills. Here's a simple guide to measuring performance: • 1. Select a methodology • You may improve the accuracy of your performance evaluations by considering the approach you want to employ beforehand. For instance, if you wish to assess the leadership qualities of individuals in managerial roles, you may use the management-by-goals measurement. The rating system might be an excellent place to start if you want a simple way to measure how well someone is doing in their job before moving on to more complicated team activities. • Understanding the desired outcomes for the company and the preferred working styles for the employees can assist you in choosing an appropriate strategy.
- 35. • 2. Starttracking performance • Once you know the approach you want, you can monitor the employees' performance while on the job and record your findings. Keeping records of your evaluations enables you to compare past and present efforts. Talk to those in the human resources department about setting up group activities and company-wide meetings as part of the performance evaluation process. • After the performance evaluation, you can stay in contact with the employees and provide them with constructive feedback on how they can better work together. • 3. Assess the outcomes • By reviewing the findings of the performance assessment, you may get insights into areas of individuals' work that need improvement and the qualities they possess. This may be crucial for the company's growth and success. If you don't have enough information, you may try other ways to get more work performance outcomes. • For instance, giving employees self-evaluation assignments lets you get more in-depth information about their perspectives on their working environment.
- 36. • 4. Communicatethe results • Establishing meetings with staff to discuss performance outcomes can help them understand potential areas for their development and those in which they excel. For example, if you advise employees on improving their communication abilities, they may discover new methods to practice verbal communication skills. If individuals know how to accomplish their objectives, this kind of discussion could inspire them to do so. • It may also be worthwhile to schedule team meetings to highlight the value of working together to surpass company goals. • 5. Develop specific action plans • The findings of the performance assessment may provide you with sufficient knowledge to develop specific action plans. Depending on your team's level of performance, you may create strategies for each month or year. For instance, if you discover employees want more tasks throughout shifts, you may develop a plan to assign them more duties or objectives to accomplish. Increased job satisfaction may boost the employee's productivity and encourage them to contact you with future issues.
- 37. Rewarding Employees forPerformance • Rewarding employees for good performance is vital to motivating and retaining talent. When employees are rewarded for their efforts, they are likely to become more loyal and productive. This can boost the overall productivity and output of the organization. In this article, we discuss the benefits of rewarding employees for good performance and how to reward employees.
- 38. Benefits of rewardingemployees for good performance • Makes employees feel more valued • Motivates employees to work harder • Improves employee productivity • Increases commitment to job responsibilities • Improves job satisfaction • Boosts loyalty to the organization • Creates role models for other employees • Incentivize s collaboration and teamwork • Ensures talent retention • Creates good company culture • Positively impacts overall business growth
- 39. How to rewardemployees for good performance • 1. Align rewards with performance • Aligning rewards to highlight good performance and recognize top performers is a good way to show employees how their productivity helps the company. For example, if the company needs to achieve certain sales targets, a rewards program can be established to incentivize employees based on how well they meet or exceed these targets. Employee recognition programs can include: • Bonuses • Stock options • Profit-sharing • Salary increments • Perks • Remote work • Reimbursement of commuting expenses
- 40. • 2. Provideunique rewards • Besides financial incentives, you can also provide your employees with a variety of unique rewards. Based on the company culture, unique rewards can be a combination of the following: • Organize a warm welcome: Decorate the company entrance to welcome outstanding employees so that other employees can see and congratulate them. • Give gift cards for family dinners: This can help employees celebrate their success with their families. • Give impromptu time off: Surprise the employee by sending them an e-mail that they have been given time off. • Offer a subscription to movie or music streaming service: An annual subscription to either service can be very rewarding and fun for the employee. • Offer tickets to a concert: If the employee enjoys music, offering tickets to a concert of their choice will be well received. • Offer gift vouchers for groceries: Consider gifting vouchers for the purchase of groceries from the supermarket of their choice.
- 41. • 3. Recognizemajor and minor achievements • Although celebrating major accomplishments is imperative, recognizing all the minor milestones that led to that major accomplishment can motivate employees to stay focused until they reach their ultimate goal. Here are a couple ways to recognize these achievements: • Celebrate work anniversaries: Give a gift to employees to celebrate their work anniversary every year as a reward for their loyalty. Offer a special recognition when they complete five or ten years at work. • Celebrate promotions: Recognize employees when they get promoted to the next level. • 4. Reward teamwork • Rewarding teamwork can motivate employees to strengthen collaboration, which can amplify productivity and boost innovation in the workplace. As this is more time-consuming and requires good project management skills, team-based rewards should be more substantial than individual rewards and must simultaneously reward the entire team. For example, you could plan a team outing or lunch after your employees achieve a major accomplishment for your company.
- 42. • 5. Offerpersonalized and specific recognition • Providing personalized and specific recognition can make employees feel appreciated and valued, as it specifies the impact of their contributions on the company. This also shows employees that the company cares about them. Here are some ways to provide personalized recognition to employees: • Provide a personal recognition note from the CEO: Give the employee a recognition note from the CEO of the company that expresses their appreciation of their hard work and dedication. • Publicize achievement: Recognize outstanding employees by a company-wide email, newsletter, internal communications platform or social media channels. • "Employee of the day:" Make an employee feel valued by recognizing them as “Employee of the Day” and give them a token of appreciation. • Conduct an interview: Interview the employee and feature the video on the company's internal communications platform. • Present a certificate of achievement: Announce this certificate on the company's internal communications platform or newsletter. • Offer upgraded office equipment: Upgrading the employee's existing office equipment such as chairs or computer equipment can further improve their productivity. • Award them with a personalized T-shirt or mug: A T-shirt or mug bearing the employee's photo and a brief congratulatory message is an excellent way to personalize a reward. • Arrange for a family visit: Arrange for the employee's family to visit for company events and celebrations. • Celebrate birthdays: Surprise employees with a gift on their birthdays.
- 43. Fringe Benefits • Fringebenefits are compensation that employers sometimes offer team members in addition to wages. They could benefit the individual's finances or lifestyle. Understanding the different kinds of fringe benefits available and their value can help you determine which ones may benefit you in the future. • Fringe benefits are extra perks that companies give to their employees. They are not required by law, but many companies choose to offer them anyway. This is a great way to increase employee satisfaction and build loyalty among your workers. • A fringe benefit is a benefit that an employee receives in addition to their regular salary. It can include a variety of perks, including: • Health insurance • Subsidized meals • A company phone or laptop
- 44. Types of fringebenefits • Free or discounted meals: Employers might offer free or discounted meals as a fringe benefit. This could include catered lunches, coffee or discounts on company food offerings. • Free gym membership: Free or discounted gym memberships may be a popular fringe benefit if you work in an athletic store. If your company has an in-house gym, they might also provide you with free gym access. • Transportation assistance: If you commute to work, your employer might offer you transportation assistance, including reimbursement for buses, trains, parking or gas. If your position requires frequent travel, your employer might offer access to a company-owned vehicle. • Life, dental or vision insurance: Some employers offer their employees various forms of insurance. The type of insurance and the coverage plans available may vary to suit different team members' needs. • Childcare reimbursement: Some employers offer to pay for some or all of your childcare costs during the time you're at work. Others offer childcare on-site. • Company cell phone: If your position requires you to make many calls, employers might offer a company cell phone. This can save you money on monthly usage costs and the price of the phone itself.
- 45. • Moving expenses:Your employer might offer relocation assistance to offset the cost of moving for a job if you don't yet live in the area. • Free or discounted lodging: Employers might offer free or discounted lodging at a hotel or similar establishment if you travel on the job. For example, if you're speaking at a conference in a different city, your employer might pay for your stay at a hotel. • Paid sick days: It's common for most employers to offer a certain number of paid sick days per year for the times when you are ill. These days are in addition to other forms of paid time off.
- 46. Why do companiesoffer fringe benefits? • Improved team satisfaction: Team members who feel they're receiving fair compensation may experience improved job satisfaction, which may encourage hard work and company loyalty. • Public perception: Offering fringe benefits can help improve the way individuals outside the company think about the organization. Public approval can help companies gain new investors, team members and partnerships. • Team member engagement: Team members who receive fringe benefits in return for hard work may demonstrate high levels of engagement, improving their efficiency. • Fringe benefits are designed to motivate employees to stay loyal to the company. They help increase productivity and reduce turnover rates. It’s a great way of showing that the company values its employees and it does that by offering these benefits. • When employees know that they’ll be taken care of financially, they’re less likely to leave. And when they see that their coworkers are getting similar benefits, they’re more likely to stick around too.
- 47. Perquisites (Perks) • Perksare non-monetary benefits given to employees in addition to wages, salaries, and health/retirement benefits. Different from wages, salaries, and health/retirement benefits, it is often considered extras that are nice to have. That said, it can reduce employee turnover and attract top talent to your organization. • Types of perks companies give to their employees: • Taxable perks: Some benefits provided by employers are taxable. These include rent-free accommodation, utilities (gas, electricity, and water), income tax withholding from employees’ salaries, reimbursement of medical expenses, and wages paid to household help. • Exempted perks:Employers may offer various non-taxable fringe benefits to employees, including travel allowances and telephone lines. Other common examples include medical aid, sports clubs, health clubs, and refreshments during office hours.
- 48. • Benefits ofoffering perks: • Offering perquisites to employees can be a great way to motivate them, which will help your business stay productive. Furthermore, it can attract top talent in the form of recruits. • Turnover reduction: If you have high turnover rates, reducing them will be beneficial. Offering it such as professional development opportunities helps retain employees and make your company more competitive. Without these, you may find that your employees are drawn to companies that do offer them. • Hire the best talents: It can be a significant factor in attracting new employees. If the salaries and benefits are comparable across multiple companies in the industry, it is often the factor that will make a prospective employee decide where to work. If your company offers more perquisites that applicants want, then your company will be able to attract more of the top talent available. • Increasing productivity: By offering the right perks, a company can increase productivity. It can positively affect employees’ health and reduce stress. Many perquisites are designed to increase productivity. Morale improves, and the effect is even greater because employees feel valued.
- 49. Retirement Planning • Retirementplanning is a process of setting retirement income goals and taking all the possible actions and making decisions, which are essential to achieve those retirement goals. Retirement planning includes evaluating sources of income, estimating expenses, and setting up an investment plan or savings plan to achieve the retirement goals by managing the risks and assets. • A significant part of retirement planning is identifying income sources, evaluating expenses, investing in savings programs, and managing the risks. • To put it plainly, retirement planning means devising financial strategies that will help you save, spend, and invest according to your long-term goals in the later age. There are many financial instruments available that aid in retirement planning, depending on the individual’s profile.
- 50. Benefits of Planningfor Retirement • Financial security makes most things in life more convenient. Retirement planning provides that surety of being secure in monetary terms throughout life, regardless of employment. • 1. Independence • Most people worry about being a burden to their family in their old age. It can also be emotionally distressing to be dependent on someone else for your expenses. Retirement planning allows you to maintain a good lifestyle without depending on family members. • Some people think of retirement as a time for achieving goals that were ignored due to more pressing needs in life. If you put in time and effort into retirement planning, such dreams can come true with ease. • 2. Life Expectancy • You may not realize it now, but life after retirement is considerably long. For example, if someone retires at the age of 60, the average life expectancy of 70-75 years gives them many years to manage their post-retirement fund. This is what makes retirement planning at the right age more crucial.
- 51. Benefits of Planningfor Retirement
- 52. • 3. MedicalCosts • With each passing day, the cost of medical treatment is reaching new heights. A medical emergency can burn a massive hole in one’s savings. Furthermore, people are more susceptible to illnesses at an older age. Retirement planning is of immense importance to meet such expenses and receive quality medical care at a time of need. • 4. Tax Relief • Each earning individual wishes to reduce their tax liability and maximize their savings. The government of India allows certain tax benefits on several financial instruments, which you can include in your retirement planning agenda. It is an effective way to plan for your future and save money in the present simultaneously. Tax benefits are as prevailing tax laws subject to change. • 5. Peace of Mind • Your peace of mind is invaluable. The stress of managing money to meet your long-term and short-term expenses can be dreadful. It may even cause health-related issues such as hypertension and other unfortunate illnesses. It is more important to shield yourself from such problems at an older age. • Retirement planning is an effective method of ensuring a happy and healthy life for a long time.