Recruit on potential but reward on performance
Recruit on potential but reward on performance
We all need to change with the changing times. With the emergence of global business, the business managers need to rethink the recruitment process in a new way. The process cannot be any more conventional but has to be much more innovative. The HR Heads with their Line Managers have to recruit the employees on their potential which they need to foresee before the selection process is completed. The talents / competencies which the younger generation possesses are enormous & the business managers need to exploit to its maximum advantage. The compartmentalization process of discharging one's functions are the ways of the past & the managers of today need to seriously think out of the box to utilize the human capital to display their strengths constructively. This will give an impetus to the employees to perform excellently & in turn become visible to the Management.
Recruit on potential could be by way of interviewing the candidate in terms of their technical & non-technical competence, reference checks, collecting information by engaging private agencies etc. The interviewer must have the ability and wisdom to understand the potential of the incumbent as to how valuable he could be to his company, although not in absolute terms. In other words, the crucial questions are:
1. How do you recognize potential?
2. How do you measure productivity?
The answer will differ from one business to other & there are no structured answers. But once having recruited, the reward primarily has to be on performance only. The Corporate must draw key steps to successful performance.
1. DEVELOP CLEAR EXPECTATIONS. Before they can develop effective performance-based rewards, senior management must know what it expects out of employees and be able to articulate those expectations through clearly defined goals. Because overall organizational goals may not apply to all employees, it is important to break down broad organization goals into specific goals for each division, department, group and, sometimes, individual employees.
2. CREATE A CLEAR ROAD WHICH CAN BE SIGHTED. Employees must see that their direct efforts will impact the results that management wants. No one wants to be held accountable for something they cannot directly effect. With the necessary training and development the employees can achieve what they conceive.
3. SET MANAGEABLE GOALS. The employees who go about achieving the goals must have a reasonable chance of achieving pre-determined goals which are challenging lest they lose their motivation & urge to move forward. On the other hand, goals should not be so easy that it is achieved with normal effort.
4. ESTABLISH A CREDIBLE MEASUREMENT SYSTEM. In all types of performance-based rewards programs, it is essential to provide quantitative measures of results. The less quantifiable the measurement, the greater the role of subjective judgment in deciding rewards, and the greater the potential for dispute and participant dissatisfaction. If performance-based rewards are to succeed, employees must have faith in the fairness of the measurement system. In addition, the calculation of the measurement should be understood and agreed upon by both management and employees at the beginning of the performance period.
5. EMPOWER EMPLOYEES.
Employees need to believe not only that the goals against which they are measured and rewarded are achievable, but that they are capable of achieving those goals. Have employees been adequately trained in the skills that they need for superior performance? Do employees have the information they need to make intelligent decisions? Are employees empowered to make decisions on their own? Are other departments cooperating and providing these employees with information on a timely basis? In short, is the entire system geared to maximum productivity, communication and cooperation? These questions need unbiased answers for the employee to produce results satisfactorily for the corporate.
6. MAKE REWARDS MEANINGFUL. The actual reward must be significant--that is, 15% to 20% of basic pay. However, the award could increase to as much as 40% of basic pay for superior performance. Performance-based rewards programs that provide marginal rewards-that is, less than 10% of basic pay-are rarely motivational enough to change behavior and are probably not worth the trouble and expense involved in implementation.
7. MAKE PAYOUTS IMMEDIATE. There should be as little time as possible between employee performance and the related payout. Employees need to "feel" the impact of their efforts by quickly experiencing the results.
If the Corporate develops clear expectations, create a clean route which could be sighted, set manageable goals; establish a credible measurement system, empower people, make the rewards fruitful the potentials of the new recruits can be harnessed well.
(The said write up has been written by Mr. S. Iyer, Vijay Tanks & Vessels Private Limited, Vadodara)
We all need to change with the changing times. With the emergence of global business, the business managers need to rethink the recruitment process in a new way. The process cannot be any more conventional but has to be much more innovative. The HR Heads with their Line Managers have to recruit the employees on their potential which they need to foresee before the selection process is completed. The talents / competencies which the younger generation possesses are enormous & the business managers need to exploit to its maximum advantage. The compartmentalization process of discharging one's functions are the ways of the past & the managers of today need to seriously think out of the box to utilize the human capital to display their strengths constructively. This will give an impetus to the employees to perform excellently & in turn become visible to the Management.
Recruit on potential could be by way of interviewing the candidate in terms of their technical & non-technical competence, reference checks, collecting information by engaging private agencies etc. The interviewer must have the ability and wisdom to understand the potential of the incumbent as to how valuable he could be to his company, although not in absolute terms. In other words, the crucial questions are:
1. How do you recognize potential?
2. How do you measure productivity?
The answer will differ from one business to other & there are no structured answers. But once having recruited, the reward primarily has to be on performance only. The Corporate must draw key steps to successful performance.
1. DEVELOP CLEAR EXPECTATIONS. Before they can develop effective performance-based rewards, senior management must know what it expects out of employees and be able to articulate those expectations through clearly defined goals. Because overall organizational goals may not apply to all employees, it is important to break down broad organization goals into specific goals for each division, department, group and, sometimes, individual employees.
2. CREATE A CLEAR ROAD WHICH CAN BE SIGHTED. Employees must see that their direct efforts will impact the results that management wants. No one wants to be held accountable for something they cannot directly effect. With the necessary training and development the employees can achieve what they conceive.
3. SET MANAGEABLE GOALS. The employees who go about achieving the goals must have a reasonable chance of achieving pre-determined goals which are challenging lest they lose their motivation & urge to move forward. On the other hand, goals should not be so easy that it is achieved with normal effort.
4. ESTABLISH A CREDIBLE MEASUREMENT SYSTEM. In all types of performance-based rewards programs, it is essential to provide quantitative measures of results. The less quantifiable the measurement, the greater the role of subjective judgment in deciding rewards, and the greater the potential for dispute and participant dissatisfaction. If performance-based rewards are to succeed, employees must have faith in the fairness of the measurement system. In addition, the calculation of the measurement should be understood and agreed upon by both management and employees at the beginning of the performance period.
5. EMPOWER EMPLOYEES.
Employees need to believe not only that the goals against which they are measured and rewarded are achievable, but that they are capable of achieving those goals. Have employees been adequately trained in the skills that they need for superior performance? Do employees have the information they need to make intelligent decisions? Are employees empowered to make decisions on their own? Are other departments cooperating and providing these employees with information on a timely basis? In short, is the entire system geared to maximum productivity, communication and cooperation? These questions need unbiased answers for the employee to produce results satisfactorily for the corporate.
6. MAKE REWARDS MEANINGFUL. The actual reward must be significant--that is, 15% to 20% of basic pay. However, the award could increase to as much as 40% of basic pay for superior performance. Performance-based rewards programs that provide marginal rewards-that is, less than 10% of basic pay-are rarely motivational enough to change behavior and are probably not worth the trouble and expense involved in implementation.
7. MAKE PAYOUTS IMMEDIATE. There should be as little time as possible between employee performance and the related payout. Employees need to "feel" the impact of their efforts by quickly experiencing the results.
If the Corporate develops clear expectations, create a clean route which could be sighted, set manageable goals; establish a credible measurement system, empower people, make the rewards fruitful the potentials of the new recruits can be harnessed well.
(The said write up has been written by Mr. S. Iyer, Vijay Tanks & Vessels Private Limited, Vadodara)
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