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Innovative Trends and Strategies in

Compensation and Performance Management

18th July 2006

About Us ! 5 years… ! 23 processing units ! 56 countries ! 4000 employees ! >90 Million Transactions ! 10% of Standard Chartered’s manpower ! Placing people first… .

Changing Paradigm The Changing face of the Indian HR Key Drivers People Implications ! Global Competition ! Brand & Value proposition ! Burgeoning Global Opportunities ! New Work Ethics ! Sensitivity and Inclusion ! Shift in loyalty from organisation to ! Acculturisation profession and function ! Complex employee expectations ! Hierarchies to collaborative ! Strong People management partnerships ! Younger and impatient workforce capabilities ! Global work culture ! High Performance Culture Companies that manage people well will have a competitive business advantage .

Hunter. “Individual Differences in Output Variability as a Function of Job Complexity. et al.1% J. 100% 1% Average Performers by Complexity of Job 0% Revenue Employment Stock Price Net Income Difference in Productivity 125% Grow th Grow th Grow th Grow th 120% of High Performers 100% “Corporate Culture & Performance” -John Kotter and James Haskett 75% 50% 48% 25% 32% 19% 0% Low Moderate High High-Sales Complexity of Job Clear understanding of Performance Standards Increases individual performance by 36.. 1990 .E. It Makes Business Sense… 1000% 901% 900% 756% 800% 682% 700% 600% Organisation w ith Performance 500% Enhancing Culture 400% 282% Organisation w ithout Performance 300% Enhancing Culture 166% 200% 74% 36% Difference in Productivity of High vs.” Journal of Applied Psychology.

consistency and frequency of performance reviews " Building managerial capabilities .Managing Performance Internal Complexities and External Realities Managing people performance is complex… " Delivering on performance standards enough " Its more complex to perform " Not just restricted to achieving targets or meeting deadlines… " How to work in collaborative partnerships and to manage stakeholder expectations " Innovation and creating the difference Measuring performance is even more complex " Failure in evaluating effectiveness of measurement tools and practices " Validity.

System Performance Culture Manager – Employee Interaction High Performing Workforce Formal Review Informal Feedback Connection with Rewards Job Opportunities Corporate Leadership Council – Performance Management Survey . Elements of High Performance Performance Mgmt.

Emerging Trends & Strategies ! Managers Key to Performance – Invest in People Management Capabilities ! Keep what matters in Sharp Focus Difference in % of Employees Responding Favorably—DDG vs. Author Double-Digit Growth—How Great Companies Achieve It No Matter What. 2004 ! Aggressively Differentiate Performance and Rewards . SDG I have a clear understanding of what I can do to help the company become more successful +18% My manager clearly communicates expectations for me +16% I have a good understanding of goals for: " Myself +11% " My team +16% " My department +18% " My business unit +10% * Joint research of Hewitt Associates and Michael Treacy.

Differentiating Rewards Based on Results Effects of Successful Pay-for-Performance Programs on… Making the best better! …High Performers …Mid-Range Performers …Low Performers No No No Up Down Up Down Up Down Change Change Change Engagement 78% 0% 22% 63% 2% 34% 21% 26% 54% Innovation 80% 3% 18% 45% 5% 51% 11% 21% 68% Productivity 88% 0% 13% 65% 0% 35% 31% 18% 51% Quality of work 80% 0% 20% 60% 3% 38% 28% 21% 51% Teamwork 65% 3% 33% 67% 3% 31% 23% 21% 56% Turnover 20% 50% 30% 20% 34% 46% 54% 15% 32% Keeping more These …and more of Underperformers of the right employees get them stay start looking people stronger too… elsewhere Hewitt—WorldatWork. Joint Research on Pay-for-Performance. 2004 .

Changing Face of Rewards Pay. Benefits. Total Pay and Recognition Employment Experience Pay and Total Benefits Rewards Employee Value Proposition .

Smart Rewards Financial Rewards Future marking.Life Practices Fusion Club Work / Affiliation KFC Week Awards and not just Non Financial Rewards rewards!! Smart Work. not benchmarking Employee Value Proposition = Pay + Benefits + Careers + employee experience .A Holistic Rewards Approach Career Planning Individual Development Career Flexible work Work .

Lessons Learnt ! Robust methodologies and Consistent HR practices ! Simple Stuff is the Difficult Stuff ! Know when to Build or Buy Talent ! Broad-based or Critical Few ! Connect the dots…from strategic intent to individual goals ! Think Holistic Rewards ! Managers as key to performance: invest in people managers ! Build Employee Value Proposition .

Our HR Roadmap .

Thank You Questions? .