You are on page 1of 8


MAY 2013

H I R I N G & B E YO N D




A recently concluded survey highlighted
that average appraisals for the
2012-13 period has remained in the
range of 5-20% and maximum hike
has been offered to midmanagement staff.

Although salary is still the

preferred outcome of performance
appraisals, industry experts expect
things to change in near future.
Thus, many organisations are
working out strategies which goes
beyond just money.

With the changing business

environment, culture and values,
meaning and objective of
compensation and benefits
associated with performance
appraisals are also changing. Experts
share their perspective inside.

Compensation Trends
Organisations have offered moderate appraisals for the 2012-13 period with
most companies offering 5-20% hikes to their employees, revealed the survey. The 2012-13 period has seen most organisations
treading a cautious path, where hiring was restricted to niche profiles,
appraisals too have been bestowed on high performers
...some things never
While many organisations,
today, are focussing on
constructing other nonmonetary benefit packages
for the staff, employees still
vie for pay hikes. According
to the
survey nearly, 87% of the
employees expect pay hikes
as part of appraisals. It
would be correct to say that
we are habituated to
increases during the time of
appraisals in the Indian
context. It is not necessary
that globally there is a
similar sentiment and in
fact in the US people are
used to increases that are
less than 5%! However, from
the average Indian point of
view appraisals are
associated with hefty
increases in salary and
anything less than 10% is
normally associated with
failure, reasons Arunav
Banerjee, President and

Chief Researcher, SOIL

Innovation Board at School
of Inspired Leadership.
Compensation continues
to be a guiding factor for a
majority of organisation
related decisions including
career shifts; though this
trend is changing a little bit
now, he added.

GDP predictions and other

external aspects the outlook
will remain conservative.
Compensation trends will
remain moderate. However,
we will follow a fairly
approach for key talent and
average performance, he

...on a positive note

...the data says

Industry experts predict,

the performance appraisal
for 2013-14 period to be
better than this year;
however, the increase would
be marginal. The future
compensation trends would
be tightly linked to
growth, said Saurov
Ghosh, Executive VP &
Head - HR & Training, Birla
Sun Life Insurance Co. Ltd.
in the bi-annual RecruiteX
report. Corporates are
taking a far more balanced
approach while finalisation
of compensation increases.
Considering the existing
scenario of high inflation,

46% employees feel that

most employees look out
for opportunities, post
appraisals for better pay
l 53% of the employers
believe that the next
years appraisals would be
better than this year
l 50% of the organisations
based out of metros
(Delhi, Mumbai,
Bangalore, Chennai,
Kolkata) have done
better in terms of giving
out appraisals compared
to other major job hubs


H I R I N G & B E YO N D
w w w. c o n t e n t . t i m e s j o b s . c o m


Appraising the appraisals

pproximately 47% of the

participating organisations have
offered appraisals in the range of
upto 10% for the 2012-2013 period, revealed
a recently concluded survey by Maximum pay hike was
given at mid-management levels, said 50%
of the surveyed organisations. Most
organisations have had a cautious
approach last year. Since, the business was
not too aggresive during 2012, the
perfomance appraisals have also been a low
key affair this time. Nearly 60% of the
organisations in the IT/Telecom sector
claimed to have offered appraisals in the

range of 0-10%. About 90% of the

representative organisations from
Healthcare sector confirmed giving a 1020% pay hike as part of this years
appraisals. Over 60% of the organisations
in BFSI and Construction/Cement/Metal/
Steel/Iron sector have given major share
of appraisals to their Junior/entry level
staff. Over 60% of the surveyed employers
agreed to have given their IT and
Administrative staff appraisals in the
range of 0-10%. Close to 47% of the
organisations offered 10-20% appraisals to
their HR/PM/IR/Training professionals,
pointed out the survey.

Dealing with dissatisfaction

lose to 38% of the surveyed

employers believe that offering
training and development
opportunities is the best way to retain
dissatisfied staff, post appraisals. Earlier
surveys by have also
pointed out that growth and career
progression is one of the most powerful
tools to engage and retain the current
workforce. Employees, too, agree to the fact
that organisations which offer good
growth opportunities tend to see
comparatively low attrition rates. Nearly
37% of the companies feel that assigning
new projects helps to hold back the

What is the average

(percentage) appraisal you
have offered this year?

10-20% 40%
20-30% 8%

More than 30%


Which mechanism works best in

dealing with post appraisal

discontented employees. Since new

challenges brings in freshness and
Offer job rotation
provides incentive to them to perform to
the best of their ability. About 36% of the
organisations in the IT/Telecom sector
believe job rotation and assigning new
projects is the best tool to retain staff post
appraisal. New projects and job rotation
techniques help break the monotony at
work, thus, enhancing the motivation
levels. For BFSI and Construction/
Cement/ Metal/Steel/Iron industry,
offering training and development
Assigning new projects
opportunities works best for engaging staff
post appraisals, according to the survey.




Offer training &



Powered by:

Salary makes sense

What do employees
generally expect from

ccording to a poll conducted by

(a career research platform of 87% of
employees expect pay hikes from appraisals. Nonmonetary perks/benefits dont matter to them at all. Though,
12% of the employees look forward to promotions as part of
appraisals. Training, career progression and growth
opportunities are the new-age mantras for retaining and
engaging employees in the long-run but when it comes to
appraisals the expectations are still traditional. Experts
believe that this notion is largely traditional and it is not the
same case in US or in other foreign nations. Money is still the
most desired outcome of performance appraisals for majority
of the Indian workforce. However, industry experts feel that
this will change in future, pertaining to changes in
organisational culture and structure.

Perks/benefits 1%
Pay raise



H I R I N G & B E YO N D
w w w. c o n t e n t . t i m e s j o b s . c o m


Reinventing the appraisal system

rewarding the non-monetary way
While compensation remains the most desired outcome of appraisals, there are
organisations which are building strong non-monetary strategies to hold back their
valued sta and give them a sense of achievement.
B.I.G. at AEGON Religare Life Insurance

Yateesh Srivastava
Chief Marketing Officer & Head Talent
AEGON Religare Life Insurance

ne of the largest
organisations face
today is finding ways to
motivate employees and
keep them engaged. Quite
often we see employees exit
soon after the appraisal and
bonus cycles are over. One
way to control this sort of
attrition is to provide
employees with
opportunities that align
their personal development
with the strategic goals of
the organisation. At AEGON
Religare Life Insurance

(ARLI) one such initiative is

B.I.G. or Big Insights Group.
B.I.G. is a platform that
allows the best and brightest
chosen through a stringent
screening process the
opportunity to interact with
the top management in the
company and work
collaboratively using a
problem solving approach to
business challenges. The
idea is to generate, polish
and execute business
insights that impact
performance of the
company. Participation in

B.I.G. in the first year of

launch covered 8% of the
non-leadership workforce.
The selection process and
the timely implementation
of the program has
motivated and charged up
even those employees who
have not participated. For
the employees there is a
prestige as well as payroll
impact. The ROI on the
project is awaited but even if
one good breakthrough
comes out of this exercise it
will be significant.

Building a Contemporary Pay for Performance System

Ashish Arora
Founder & MD
HR Anexi

ver the last two

decades, most
organisations have
moved away from pay
systems that are driven by
tenure to those that reward
performance. Performance
ratings in an organisation
may follow a standard
continuum; employees are
compensated more as they
move up the range. Based on
the spread of appraisal
ratings, a company may
allocate its pay for
performance budget in two
different ways:

bonus if they have

achieved or exceeded their

Other employees may

receive a permanent base
salary increase that may
or may not be coupled
with a promotion

Bonuses recognise
exceptional performances
over less than an annual
period, while pay increases
reward longer term
achievements. An upcoming
option that combines both
methods involves building a
control point in the pay
band. A control point fixes
or controls an employees

Certain employees may

receive a performance

base salary at a certain level,

usually one at par with the
average market rate. Based
on his accomplishments, the
employee may keep
receiving base pay increases
until he reaches his control
point; if his performance
warrants a pay increase
beyond that point, he is
awarded a one-time bonus
instead of a permanent pay
hike. Most large
organisations currently use
control points to strike a
balance between motivating
high performing employees
and controlling their pay


H I R I N G & B E YO N D
w w w. c o n t e n t . t i m e s j o b s . c o m

TimesJobs Conversations

New Age Recruitment Tools:

Engaging Candidates is Critical
To use the new age recruitment tools more effectively for recruitment, branding and
assessment, were some of the trends that were discussed at a recent
Boardroom Dialogue on New Age Solutions in Recruitment held in Pune.

enuka Krishna, AVP-HR,

KPIT Cummins explained
the role of new age
recruitment tools in an
organisations roadmap, For
the 0-5 years experience
candidates, the social space is a
sourcing tool. However, the
niche talent or the 6-10 years
experience category is the
specialist talent that all of us in
the same space are fighting for.
These are the passive candidates
who are sitting in online
databases or portals they are
the ones who are not looking for
a job but every recruiter wants
them. Here, social media
becomes more important
because this is where we want to
form connections with these
candidates. This is where we are
looking for solutions.
Abhishek Singh, Head-Talent
Acquisition, All Scripts,
According to me the social
footprint of the organisation
has two aspects: sourcing and
branding. From the talent
branding angle there is no doubt
that every organisation has to

be present in the social space.

For sourcing, 40% of
recruitment happens through
social media as it is a passive
medium, whereas 60% of
sourcing is still done through
active recruiting means.

figuring out if we can keep them

engaged in a dialogue and use
them for employee referrals. I
dont think weve leveraged the
strength of this catchment as
much as we can, said Saji
Daniel, Director-HR, SunGard.

Discussing the next wave of

employer and employee
behaviour in the social space,
experts agreed that branding
and engaging candidates
through talent communities is
where everyone is heading.

The experts agreed that most

organisations today are
interested in leveraging social
media to reach out to passive,
middle order employees; these
are people with domain
knowledge and expertise, which
are areas where employers hope
to beat competition in the
market using talent as a
competitive advantage.

Manohar Kakade, Head-India

Recruitments, Geometric Global
added that their strategy of
allowing employees to post
certain job profiles on their
professional networks paid good
dividends as the quality of hires
went up.

The panellists outlined that a

robust talent community means
less time and money spent on
pulling in passive candidates. It
means better quality of job
applicants and more interaction
with job candidates (in the form
of online contests, webinars and
other information exchange
tools), plus the opportunity to
give them a much better grasp of
what the organisation does
every day.

While discussing tools for

assessment of candidates most
panellists pointed out that
solutions that would allow them
to access behavioural traits and
competencies of candidates on
their online professional
profiles will be a huge help to
recruiters. To this end, job
portals can play a vital role by
running behavioural and skill
tests to capture and endorse
competences, and the recruiters
could then match candidate
traits with the companys job

The challenge, however is to

build an eco-system in the
organisation that can leverage
social media, along with the
very effective means of crowd
sourcing talent that most
organisations use today, said
Nitin Chandra Shende, HeadTalent Acquisition, Persistent.
We have an alumnus network,
people who have left us for the
right reasons are ambassadors
of the organisation. We are

Understanding the need for

alternate platforms to engage
candidates before hiring, and
the growing importance of
employee endorsement, presented its
two social platforms: TechGig
and JobBuzz to the panellists.
The aim of these socially-active
platforms is to empower
branding led recruitment.

Expert Speak
Times have changed;
employers dont
have the legacy that
organisations like
Tata enjoyed.
Capturing the
mindspace of a prospective
candidate in the social space
for a long time is a challenge,
Nitin Chandra Shende, HeadTalent Acquisition, Persistent
In our organisation we
are assessing how we
can split the
recruitment team
one part does a
behavioural or traits
search more from a
social media analytics
perspective. This team feeds
the information to the farmers,

who assess who fits into the job

profile, Saji Daniel, DirectorHR, SunGard

person as an A-class, B-class, Cclass personality, which is

indicative of their traits, the
organisation can filter volumes
from here, Subramanya
Desai, Head-Talent
Acquisition, Eaton

The rsum can

list the skill sets
but the DNA of a
candidate can be
assessed by
his/her behaviour on
the social media, by who is
recommending him, what kind
of people they are following,
what kind of comments they
are making, Renuka Krishna,
AVP-HR, KPIT Cummins

In my opinion the
career pages in
networks can be
used to showcase
routine and other
initiatives but what really
makes a connection with the
candidate is technology blogs
or talent communities where
candidates come to talk , not
just follow the jobs posted,
Abhishek Singh, Head-Talent
Acquisition, All Scripts

A behavioural
assessment tool
can be evolved
that is built to
filter behaviour
and categorise the

We use the social

space it to
primarily source
beginner talent;
niche is done
through traditional
mediums. We also rely heavily
on employee referrals, for us
that is the most credible source
of talent, Amrita Pandey,
Head-HR, Aptify
using these new
age recruitment
methods remains
a huge challenge. I
prefer personal interaction to
assess the persons calibre,
Manohar Kakade, Head-India
Recruitments, Geometric


H I R I N G & B E YO N D
w w w. c o n t e n t . t i m e s j o b s . c o m

News Bytes

in such a situation, HR leaders need new skills and information to
add value. When M&A deals cross borders, a foundational
understanding of key people issues in a given country is critical to
any M&A planning or decision-making process, Mercer Partnerand
Global M&A Engagement Manager in Mercers M&A consulting
business Gareth Williams said.

PSU, govt jobs preferred by B-school graduates: Survey

Sense of career stability is winning over faster growth prospects in
private sector as more and more B-school graduates are preferring
jobs in public sector undertakings (PSUs) and central government,
says a survey by industry body Assocham. A majority of students
(about 88 per cent) are getting into PSUs and central government
jobs, said a pan-India survey conducted by the Assocham in
February and March this year. The survey, PSUs or Central
Government job seekers, was conducted in cities like Delhi-NCR,
Mumbai, Ahemdabad, Cochin, Bangalore, Hyderabad, Kolkata,
Chennai, Indore, Patna, Pune, Chandigarh and Dehradun.

n The Economic Times, April 2013

Compensation during difficult times

During an economic slowdown, many companies implement drastic
cuts in employee compensation and benefit packages. While for
some organisations it is important to do so, they need to spend time
to retain and engage their workforce inspite of pay cuts. As Sahil
Malik, MD, Da Milano said, To sustain talent during difficult times,
the top management needs to keep communication open and
effective. The employees should know what is going on and how it
would affect them. There should be a consistent approach to
decision making. Staff should be confident that decisions are being
made for the right reasons.

n The Economic Times, April 2013

Organised sector jobs increase by 9 lakh

Number of people employed in the organised public and private
sectors increased from about 281 lakh in 2009 to 290 lakh in 2011 even
as more than five lakh posts are lying vacant in central government
departments. As per the Employment Market Information
Programme of Ministry of Labour and Employment, employment
growth in the organised sector including public and private sectors
has increased from 281.72 lakh in 2009 to 289.99 lakh in 2011,
registering a compound annual growth rate of 1.46 per cent,
Minister of State for Personnel, Public Grievances and Pensions V
Narayanasamy told Rajya Sabha in a written reply.

n The Times of India, April 2013

Candidate engagement the next wave of social media

To use the new age recruitment tools more effectively for
recruitment, branding and assessment, were some of the trends that
were discussed at a recent Boardroom Dialogue on
New Age Solutions in Recruitment held in Pune. The discussion
started with how the social media space features in organisations
recruitment agenda and changing talent acquisition strategies,
keeping in mind the candidates social footprint. The panel also
talked about the role of referrals, online assessment tools and niche
talent communities.

n The Economic Times, April 2013

Skills HR need to add value to cross border M&As

With cross border deals emerging as a significant element of global
merger and acquisition activity, HR leaders need to be well-versed
with the broad array of regulations, cultures and practices, that
might impact the overall deal success, a Mercer report says.
According to the global staffing consultancy, cross -border M&A
activity comprises a significant portion of global deal activity and

n The Times of India, April 2013


H I R I N G & B E YO N D
w w w. c o n t e n t . t i m e s j o b s . c o m


H I R I N G & B E YO N D
w w w. c o n t e n t . t i m e s j o b s . c o m


The changing dynamics of compensation and appraisals

understanding of how
appraisals will impact
pay outcomes, but also
how the appraisals will
feed into career plans,
personal development
and overall satisfaction.

Shubha Kasi
HR Director, SunGard

Bringing in
Appraisals refer to the
review of work done, but
in most organisations
and with most employees,
this is synonymous with
the increases and
promotions that usually
follow an annual
appraisal exercise. To
claim that an appraisal
process is successful we
must be able to make the
distinction between the
two processes in the
minds of employees. That
will ensure a fair

The dynamics of
appraisal system:
Employees will stay if the
work is good, the
environment is
challenging and healthy;
and the rewards are
consistent and fair. Firms
that want to build a payfor-performance culture
will differentiate by
performance level; firms
that have diverse teams
across domains or
industries are more
decentralised and give
broad guidelines and let
managers decide
individual payouts.
Compensation strategy
cannot change seasonally
and needs to support
business drivers and

Working out appraisals:

We are looking at an
average increase of 10% in
salary and we have added
something new called a
fixed variable which is
part of the performance
incentives for all
departments in our
Employee expectations:
Employees generally
expect increase in salary/
position and responsibility
from appraisals. However,
in the days to come,
employees will expect part
of the profit share, some
would look at value add to
their roles, some would
want companies investing
in their future
development, like
nomination for executive
learning programs, PG

Lavleen Raheja
CEO & Managing Director,
FranklinCovey India & South Asia

courses etc. I also see

variable very high
performance based pay
structure being agreed and
expected too.
Performance matters:
compensation strategy
should align to the growth

The future: In the years

ahead, as organisations
become more agile and
flexible, compensation
and reward structures
will follow suit. We will
see structures where a
number of components
could be short-term and
revisited a few times a
year. E.g. an employee
working on a critical
project receives an
allowance that lasts as
long as that project does
and there is no stigma
with its discontinuance at
the end of the project.
The sense of entitlement
that employees have now
will diminish. Also, more
organisations will move
to communicating a Total
Compensation or Total
Rewards picture to
employees to maximise
the value from
investment and also to
ensure employees
understand the full extent
of the investment the
organization is making.
strategy of the company.
Be open as to where are
we, how are we, so that it
is owned by both.
Performance should be the
key driver of
compensation and
luxuries of life should
come through rewards for
all. Salaries should be nice
to keep the engine running
easily but should not be
make the employees so
comfortable that they
become lazy and loose
ambitions and growth
paradigms. A range of 5 to
15% is a good range today
but with performance
regards for all. Salaries
should build a
performance culture
rather than a complacency

The factors: Appraisals are more

about what the individual has
achieved and what he/she can hope to
achieve in the organisation.
Salary/benefits are more like hygiene
factors as compared to growth and
recognition for work accomplished. So
while it is important to meet the basic
hygiene needs and keep pace with
some of the changing benefits, it is
more important to ensure that
interactions are more about what they
can achieve in the course of one's
growth in the company.
The philosophy: Salary is a weak
retention strategy because it can be
adopted by any other organisation.
While communicating about
compensation clarify what the
company stands for, where it is headed
and what it holds for people in the
organisation. A company with strong
fundamentals - financial as well as
operational, is where employees
typically like to be. From an
individual's standpoint, increment is
an affirmation of the companys
intent to invest in him for helping the
organisation grow. Training for bigger
roles and higher responsibilities
becomes another motivator for
employees to stay on and learn.
The strategy: A compensation
strategy is a carefully thought-out
process which has a strong linkage to
the larger compensation philosophy of
the organisation. Besides
performance metrics, the
compensation strategy should also
reflect the demand-supply dynamics of
the talent pool available. A strong
variable pay program is an important
element in this space. One has to look
at bringing in the right balance of
fixed and variable pay and link this
variable pay to strategic goals of the
organisation. Given that, any
organisation will have a mix of home
grown and lateral hires and it is
important to strike a balance between
the two. While planning for
compensation change, it is useful to
keep these elements in perspective
and it will evolve in time to reflect the
external changes.
George Thomas
Group Head HR, Narayana Health

Disclaimer: Information provided in this newsletter shall not be reproduced, published, re-sold or otherwise distributed in
any medium without the prior written permission of and a clear acknowledgement to
Contact: TJinsite,, Plot No 6, Sector 16A, Film City, Noida. Write in to
Copyright 2012 Times Business Solutions Limited. All rights reserved.