LOVELY PROFESSIONAL UNIVERSITY

Academic Task
(Online Assignment – 2)

Name of the faculty member: Rajat Kapoor

Course Code: HRM 204 Course Title: Compensation Management

Student Name: Akash Registration Number: 11813153

Roll Number: A33 Class: B.Tech

Section: MOM53 Batch: 2018-2022

Date of Allotment: 16/03/21 Date of Submission: 31/03/21

Exploring Employee reward Management practices carried out in Hindustan
Computers Limited(HCL)

About HCL:
HCL Technologies Ltd is a leading global IT services company that helps global enterprises re-
imagine and transform their businesses through Digital technology transformation. The company
is primarily engaged in providing a range of software services business process outsourcing and
infrastructure services. The company leverages an extensive offshore infrastructure and its global
network of offices in various countries and professionals to deliver solutions across select
verticals including Financial Services Manufacturing Telecommunications Media Publishing
Entertainment Retail & CPG Life Sciences & Healthcare Oil & Gas Energy & Utilities Travel
Transportation & Logistics and Government.HCL Technologies Ltd was incorporated in the year
1991 as HCL Overseas Ltd. The company received the certificate of commencement of business
on February 10 1992.

In the year 2001 the company entered into a strategic alliance with Nasdaq-listed Vitesse
Semiconductor to develop software solutions for global networking markets. They also entered
into a strategic alliance with Toshiba Information Systems (Japan) Corporation to set up a
dedicated offshore software development centre for developing embedded software for the
Japanese company.

The company was conferred the prestigious Excellence in Education Award for 2004 by the Life
Office Management Association (LOMA). In August 2004 BPO delivery centre in Chennai got
BS7799 certification by the British Standards Institute (BSI). They introduced Cross View; a
framework based Computer Systems Validation (CSV) methodology for the development of
robust software applications in the Life Sciences arena.In the year 2005 SEBI made a tie up with
the company for market surveillance and the company formed joint venture with NEC Japan.
The company amalgamated their six wholly owned subsidiaries namely DSL Software Ltd
Shipara Technologies Ltd HCL Technologies BPO Services Ltd HCL Technologies (Mumbai)
Ltd Aquila Technologies Ltd and HCL Enterprise Solutions (India) Ltd with the company.

On 14 November 2017 HCL Technologies (HCL) announced that it had won a five-year IT
infrastructure services contract from Jardine Lloyd Thompson Group (JLT) one of the world's
leading providers of insurance reinsurance and employee benefits related advice brokerage and
associated services. The global partnership with Siemens on Mindsphere a cloud-based open
Internet of Things (IoT) operating system comprises technology application development
connectivity solutions system integration and go-to-market strategy.In January 2018HCL signed
a global reseller agreement with SAP SE where SAP will resell the HCL next-generation
maintenancerepair and overhaul solution under the brand name of SAP Enterprise Asset
Management(SAP EAM).The company was also identified as one of the strategic partners by
SAP in its global partner network to drive IoT business.The company has been awarded Best
RPA Implementation in Supply Chain Management at Asia Outsourcing Leadership Awards
2018.
As on 31 March 2019 the company has 133 subsidiaries and 8 associate companies under its
roof.During the FY 2019-20the company has launched a dedicated HCL Microsoft Business Unit
focused on Microsoft Technologies. As on 31 March 2020the company has 137 subsidiaries and
11 associate companies under its roof.In February 2021HCL has signed a five-year Digital
Workplace Services Agreement with Airbus. HCL will establish a modernized digital workplace
to enhance the user experience and service quality for the majority of Airbus employees globally.

Introduction To Employee Reward System

 Employee reward systems refer to programs set up by a company to reward performance
and motivate employees on individual and/or group levels. They are normally considered
separate from salary but may be monetary in nature or otherwise have a cost to the
company.
 While previously it was considered the domain of large companies but small businesses
have also begun employing them as a tool to lure top employees in a competitive job
market as well as to increase employee performance.
 Employee recognition programs are often combined with reward programs they retain a
different purpose altogether. They are intended to provide a psychological—rewards a
financial—benefit.
 In designing a reward program, a small business owner needs to separate the salary or
merit pay system from the reward system. Financial rewards, especially those given on a
regular basis such as bonuses, profit sharing, etc., should be tied to an employee's or a
group's accomplishments and should be considered "pay at risk" in order to distance them
from salary. By doing so, a manager can avoid a sense of entitlement on the part of the
employee and ensure that the reward emphasizes excellence or achievement rather than
basic competency.

HCL Employee reward system

There are a number of different types of reward programs in HCL aimed at both individual and
team performance:

1.Variable Pay
Variable pay or pay-for-performance is a compensation program in which a portion of a person's
pay is considered "at risk." Variable pay can be tied to the performance of the company, the
results of a business unit, an individual's accomplishments, or any combination of these. It can
take many forms, including bonus programs, stock options, and one-time awards for significant
accomplishments.
2.Bonuses
Bonus programs have been used in American business for some time. They usually reward
individual accomplishment and are frequently used in sales organizations to encourage
salespersons to generate additional business or higher profits. They can also be used, however, to
recognize group accomplishments. Indeed, increasing numbers of businesses have switched from
individual bonus programs to one which reward contributions to corporate performance at group,
departmental, or company-wide levels.
3.Profit Sharing
Profit sharing refers to the strategy of creating a pool of monies to be disbursed to employees by
taking a stated percentage of a company's profits. The amount given to an employee is usually
equal to a percentage of the employee's salary and is disbursed after a business closes its books
for the year. The benefits can be provided either in actual cash or via contributions to employee's
401(k) plans. A benefit for a company offering this type of reward is that it can keep fixed costs
low.The idea behind profit sharing is to reward employees for their contributions to a company's
achieved profit goal.
4.Stock Options
Previously the territory of upper management and large companies, stock options have become
an increasingly popular method in recent years of rewarding middle management and other
employees in both mature companies and start-ups. Employee stock-option programs give
employees the right to buy a specified number of a company's shares at a fixed price for a
specified period of time (usually around ten years). They are generally authorized by a
company's board of directors and approved by its shareholders. The number of options a
company can award to employees is usually equal to a certain percentage of the company's
shares outstanding.
5. Group-Based Reward Systems
As more small businesses use team structures to reach their goals, many entrepreneurs look for
ways to reward cooperation between departments and individuals. Bonuses, profit sharing, and
stock options can all be used to reward team and group accomplishments. An entrepreneur can
choose to reward individual or group contributions or a combination of the two. Group-based
reward systems are based on a measurement of team performance, with individual rewards
received on the basis of this performance.
6. Recognition Programs
For small business owners and other managers, a recognition program may appear to be merely
extra effort on their part with few tangible returns in terms of employee performance. While
most employees certainly appreciate monetary awards for a job well done, many people merely
seek recognition of their hard work. For an entrepreneur with more ingenuity than cash available,
this presents an opportunity to motivate employees.

Design of Reward Program in HCL

The keys to developing a reward program are as follows:
 Identification of company or group goals that the reward program will support
 Identification of the desired employee performance or behaviors that will reinforce the
company's goals
 Determination of key measurements of the performance or behavior, based on the
individual or group's previous achievements
 Determination of appropriate rewards
 Communication of program to employees
In order to reap benefits such as increased productivity, the entrepreneur designing a reward
program must identify company or group goals to be reached and the behaviors or performance
that will contribute to this.

Total Rewards elements in HCL

 Objective of Employee reward plan

The objective of employee rewards vary widely from one organization to the other. The presence
of business priorities is the main reason for the variation.

Keeping in view the organizational requirements, the overall objective of employee rewards are
as follows:

1. Contributing to added value

2. Contributing to competitive advantage
3. Managing compensation and reward
4. Integrating individual employees’ aims with the compensation and reward systems in the
organization
5. Optimizing employee costs.
6. Retention of Good employee through rewards.
The prime objective of employee rewards in India is to help attaining organizational, strategic,
and short- term objectives. Attainment of these objectives helps to ensure the availability of
skilled, competent, committed, and self-motivated people. Objectively-designed employee
reward systems focus on the improvement of individual employees. It further facilitates in
developing a team.

Impact of reward plan on employee motivation

 We’ve all heard the expression about the carrot and the stick when it comes to
motivation. In short, by dangling a carrot in front of a rabbit’s face, it’s possible to
motivate them to follow a specific path with the ultimate goal of getting the reward –
the carrot. However, while employees are in general motivated by the same thing – a
paycheck – that’s not the only proverbial carrot that drives people to work hard and do
well. Employee rewards and recognition programs that acknowledge employee
contributions to the company’s goals and show appreciation for their efforts are
necessary for a high-performing workplace, happier employees and reduced turnover.
 Rewards and Productivity- Simply put, the importance of a rewarding employees
in an organization is that it spurs people to work harder and be more productive.
There is a saying that “people will always work harder when they know they are
appreciated,” and research backs it up.
 Employee Rewards Make Happier Employees- Happy employees are usually
productive employees, and happy employees contribute to higher morale. When
morale is high, turnover is low, and the business has a greater chance of being
successful and hitting revenue targets.There is a direct correlation between
rewards and employee happiness. Satisfaction at home is important because it
has a significant impact on employees' ability to do their jobs well and avoid
issues with presenteeism, or not working to full capacity when they are at work.
 Happy Employees are More Productive- Companies with engaged employees
have higher revenues than those that don’t, to the tune of two-and-a-half to three
times greater. Profitability also increases with employee engagement, with those
companies boasting engaged employees seeing almost one-third higher
profitability. Clearly, there is a return on investment that's inherent in keeping
employees satisfied with their work.
 Employee Recognition Increases Trust- Beyond keeping employees happy,
though, which is key to motivation, employee recognition also increases trust in
the workplace. People want to know that their efforts are making a difference
and aren’t going unnoticed by high-ups. Rewarding and recognizing employees
creates stronger relationships, which in turn spurs motivation. Recognizing and
rewarding employees demonstrates both a respect and appreciation for their
efforts. It shows the employer trusts that they are doing their jobs well, which
not only encourages them to stick around, but also to work harder to give their
best efforts.
 Rewards Motivate Employees Better Than Punishment Does- If rewards are such
powerful motivators, it would seem to follow that punishment, or the threat of
punishment, could be just as powerful. After all, no one wants to experience
pain, whether it be actual physical pain or the psychological pain that comes
from being humiliated, demoted or even fired.
 Rewards Work Better than Punishment- In simple terms, this means that
employers are better served to focus on rewarding employees for their actions
rather than threatening punishment if they want to motivate them.
 Some Rewards are Powerful Motivators- Getting praised for your work creates a
feeling that what you are doing is valuable and has meaning and that you are
respected by your managers and peers. Everyone wants to feel good about their
work and what they are doing, and a well-designed rewards program helps
accomplish that.
 References
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