Companies in India are increasingly restructuring their rewards and recognition (R&R) programmes in order to attract, motivate and retain the talent. This has given birth to unconventional and intrinsic approach towards the policies and practices they adopt. From single window employee R&R platforms, to contextualising rewards to specific needs of an individual, or L&D opportunities, organisations are deliberating on models that match the needs and aspirations of the Indian workforce. Edenred, a leading organisation providing work-life benefits, rewards and loyalty solutions, and Great Place to Work® Institute, came together for the second consecutive year to understand and honour the exceptional R&R practices in India to motivate talent and improve their overall performance. Great Place to Work ® Institute has been conducting workplace studies and recognising the best companies in India for the past nine years.
Sandeep Banerji, MD and CEO Edenred, says “Edenred and Great Place to Work® Institute continue this association for the second year in a row to applaud such organisations with exceptional rewards and recognition practices that have evolved themselves to maximise the performance of the most valuable asset of the organisation – The Human Capital. The outcome of the study – India’s Best Companies for Rewards and Recognition 2013, will help organisations benchmark their R&R initiatives with some of the best in the country.
Highlighting a significant change in the paradigm
of R&R, Prasenjit Bhattacharya, CEO, Great Place to Work® Institute, India and Sri Lanka, delves further deep into the philosophy. “The best workplaces in India have demonstrated a significant shift in mind set when it comes to R&R. Not only are they talking about total rewards encompassing aspects of financial, intellectual, physical, social and psychological rewards, but are also recognising 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. 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 employee,” he says. 2012 Overview The first edition of India’s Best Companies for Rewards and Recognition witnessed participation of 76 organisations from 11 industries. The report highlighted that an organisation’s culture needed to be reflected in its R&R practices. This became a crucial aspect in 2013, looking at recognition for value alignment. 2012 study found recognition to be highly underutilised and 2013 aimed at understanding it further.
One key challenge in 2012 was to measure the ROI and effectiveness of an R&R initiative. Determining what impacts the effectiveness of R&R practices was another concern area. The 2013 study aimed at taking up these questions head-on and finding answers for an effective R&R strategy.
The 2013 Study The second edition of India’s Best Companies for Rewards and Recognition saw 107 organisations compete in the segment. Sampled employees from these companies were sent a questionnaire administered over a period of 15 days. Before or during this time, the organisations had to provide information on its current R&R initiatives, workforce strength, compensation strategy, benefits policies, attrition rates, benefits etc. This formed part of the Culture Audit (2) submission.
Hypotheses 1. Once a threshold point is reached, internal equity and transparency are more important than the actual quantum of the rewards in enhancing the effectiveness of R&R (particularly rewards) programmes.
2. Higher frequency, genuine experience of appreciation and greater inclusiveness in recognition programmes makes them more effective.
The basic objective of this study was to prove that perceived equity, fairness and transparency in a reward practice together have a greater impact on the effectiveness than 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 R&R practices. Secondly, it suggested that recognition programmes, which are frequent and close to the action, reflect a genuine sense of gratitude and attempt to include a majority of the workforce.
Methodology Organisations participating in the 2013 edition of India’s Best Companies to Work For were invited to participate in the second edition of India’s Best Companies for R&R. Out of 107 organisations which opted to compete, 75 completed the 2-step process This was a 41% increase since last year and a testimony to the growing awareness and keenness of organisations to participate.
Data Collection Process: STEP 1: Organisations desiring to participate in India’s Best Companies to Work For, 2013, registered themselves.
STEP 2: Organisations desiring to participate in India’s Best Companies for Rewards and Recognition, 2013, registered themselves for this award as well.
STEP 3: Information about qualification criteria was sent to organisations. An organisation was informed if it did not qualify to participate.
STEP 4: As a critical process in the overall study, a questionnaire was administered to all/a sample of employees within the participating organisation. The employee sample size was a statistically valid number that was randomly drawn by Great Place to Work® Institute. This is the Trust Index© questionnaire, 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 organisation 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 for each of the 9 People Practice Areas was submitted by participating organisations as part of the Culture Audit (2) document.
In addition to this, organisations 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 organisations. This Rewards and Recognition submission is the second part of what is analysed 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 organisations also provided information relating to benefits, attrition rates, employee referral percentages, etc.
The R&R Scenario Organisations are going all out to provide their workforce with a dynamic work environment. Innovative, viable and sustainable rewards and recognition programmes are on almost every manager’s list today.
Rewarding practices fulfil an employee’s need to be fairly rewarded for his or her capabilities, efforts and contribution. Organisations implement rewarding practices with an aim to offer competitive salaries, bonus packages, and to share the benefits of peoples’ combined efforts in a fair manner. Incentive plans, profit sharing schemes and other opportunities for wealth and ownership sharing are some forms of rewards.
Forward looking organisations are adopting thanking practices which appreciate employees’ efforts, contribution and results, thus positively recognising and reinforcing desirable actions and behaviours. Usually, thanking employees means creating multi-fold opportunities for employee recognition. Peer recognition, awards for performance, tenure of service, adherence to safety norms – at individual or team levels – and recognition for display of company values are some of them. Such practices help create and maintain a ‘Climate of Appreciation’. The study also looked at the elements which contributed to this ‘climate of appreciation’.
Employee perception, an important aspect, has also been measured using the Trust Index© Questionnaire. The perception is measured in the form of feedback on certain statements that relate to an organisation’s R&R practices. Effectiveness of the R&R programmes in an organisation is measured primarily on the basis of this employee feedback. Therefore, the report adjudged an R&R programme as effective when the following criteria are met:
There is positive employee perception about R&R programmes i.e. the average score 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 organisations which have participated in the study.
Finally, the rate of voluntary separations is lower in these companies while the employee referrals are higher (both, numbers and percentage of employees recruited) for the Top 15 companies for rewards and recognition than others who have participated.
KEY FINDINGS 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.)
Employee perception on recognition follows a similar pattern as that on rewards. However, the scores for the all participating organisations 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 organisations. One inference that could be drawn here is that employees in both sets of organisations have more positive perception about recognition practices than rewards. This report also highlighted the link between robust rewards and recognition practices and overall positive employee perception about their organisation as a great workplace. The data revealed the number of organisations which have also been featured as a Best Employer for 2012 – India’s 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 India’s Best Companies to Work For. 7 out of 10 companies from the 2012 Best in Rewards and Recognition list have been ranked as India’s 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 their workplace than other organisations, and robust rewards and recognition practices go hand in hand with building a highly empowered workforce.
Most organisations (91%) that have participated and have provided R&R data (68 organisations) 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. Organisations that are in the Top 15 (12 with data) have an average referral rate of 36%. For the other organisations, (40 with data) this average drops to 30%.
The average voluntary separation rate for those of the Top 15 who submitted this information (14 organisations) is 12%. This rate increases to almost 20% for other participating organisations (40 organisations). Therefore, there are fewer voluntary separations and more employee referrals, in the Top 15 organisations. Employees at these workplaces are less likely to decide to move to other organisations, and are more likely to recommend their workplaces to their social and professional circles. The findings provide interesting learning on factors that differentiate the best, those that are hygiene across organisation and also areas that need to be considered for the future.
