New Rewards: Personalized and Agile


Over the last three decades, business cycles have changed dramatically. Change is happening at a significantly faster rate than in the past. Markets have become unpredictable to the extent that traditional paradigms are unable to keep pace.

“Organization agility and innovation is the way of survival in changing economic scenario. Only the organization can adapt to the changes as per customer, technology and market shall stay agile and ahead of competitors. Productivity, reputation, net promote score are an indicator of an agile organization. This agility to reflect in organization structure and Talent Management programs driving transformation”

The dynamics are changing in larger markets like India due to the influence of start-ups and homegrown technology giants, who have scaled incredibly fast and are becoming major talent players.

Current economic scenario in India can be broadly summarized as follows:

  • Fewer jobs per unit of GDP growth. India needs a minimum 9 GDP growth to absorb the job requirement of the current population
  • Leaning agriculture
  • Education rate
  • Quality of jobs
  • Poor gender diversity

Companies are trying to be competitive across three types of compensation – base salary, variable incentives, and equity. Increases in base pay reflect an employee’s alignment and growth in core values; bonus amounts are linked to the achievement of specific goals, and incentives and long-term stock options are awarded based on leadership activities and 360° feedback. This flexible system empowers employees to decide if they want to focus on core teamwork, achieve stretch goals, or move into leadership roles. To do so, companies are monitoring the market and also evaluating effectiveness suited to their business and culture. Organizations focusing on talent are offering retention and recognition awards, clearly defined career progression and invest more in equity-based awards.

Emerging priorities for the organisation are Human Capital Management and embedding technology in HR. Organizations are looking to move towards continuous feedback and action planning. The human part of HR is required to manage conflicting opinions, creative ways of solving, managing ambiguity and community engagement. While empowerment, accountability, collaboration, and result orientation remain culture focus.

REWARDS are in the midst of a transition from the strictly standardized to the highly personalized. Many organizations have reinvented performance management to be more continuous. However, the majority of companies still follow the utterly conventional practice of conducting salary reviews only once a year. Companies are creating rewards programs that are delivered more continuously, aligned more closely with individual preferences, and based more fully on an employee’s whole contribution— to the team and the organization.

Continuous Performance Management

Cisco’s favors an approach of continuous experimentation that involves listening to employee needs as well as understanding competitive benefits and rewards in the market. To promote transparency and trust, the company regularly benchmarks its total compensation against that of competing firms and gives employees a view of how each job family is paid compared to competitors.

Practices observed in other organizations are:

  • Feedback enabled through app geared to provide instant feedback and coaching
  • Training Managers on providing feedback and coaching
  • People Management is a formal competency for Managers
  • Managers receive a separate assessment rating on people management
  • Monthly feedback mechanism
  • OKR (objective and Key results to become an approach of goal setting


Use analytics to determine what people value in their rewards to appropriately align rewards programs and generate a market advantage for your organization. Revisit Rewards approach on an ongoing basis to reflect the continuing evolution of the workforce and their priorities.

Understand how changes in reward structures can affect the workforce’s overall cost, as rewards make up a significant portion of the human capital balance sheet.


AI based People analytics allows the overall metrics of the organization to be tracked though the individual contribution of employees. AI based machine learning will link training closer to the employee’s needs. In Performance appraisal, AI based analytics can generate new insights into key performance indicator of the organization

Changing Workforce composition

Gig talent does add agility to HR, by bringing in deep expertise. Adoption of gig talent can be accelerated if HR reimagines four key areas; Workforce planning, hiring, performance management, and rewards.

Shareholder Value Creation

Until now, Stock Options (ESOPs have been the most popular choice on equity compensation. The choice of performance metrics in Long term incentive plans should drive shareholder value creation.

Performance Metrics used for LTI


Top 2 evergreen challenges in C&B are:

  1. Transparency and fairness remain top on the chart.
  2. Rising skills. Rising skills are the skills that have seen exponential growth in the last few years in adoption by professionals. Rising skills can be used as an indicator of how your industry is transforming or innovating.

As per a survey by LinkedIn, when we compare the digital skills in demand in 2017 vs 2016, skills like software engineering management were high in 2016 whereas skills like AI, Big Data & Cloud Computing (ABC skills) climbed up the ranks. The demand for these ABC skills continues to grow in 2018 & 2019 as well. By 2020, APAC will face a labour shortage of 12.3 million workers at an annual opportunity cost of US$4.2 trillion. At the heart of this crunch lies skills instability. By 2020, it is expected that 42 percent of the core skills required for a job will change.

Companies are realizing that paying more isn’t the only answer. Talent is extremely selective today. They want to work with companies that offer strong culture, mission, opportunities for innovation, career opportunities and where they feel valued.


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