1

Reward System linked to Performance in Tata Communications Ltd.

-a broad overview

Janardan Raccha HR- Specialization

PRIN. L. N. WELINGKAR INSTITUTE OF MANAGEMENT & DEVELOPMENT RESEARCH YEAR OF SUBMISSION- ***’2014.

2

ACKNOWLEDGEMENTS

“Vital to every operation is co-operation, I really agree to this wonderful quotation put forth by Mr. Frank Tyger. It is a matter of great pleasure to thank all those people who helped me in completing this project successfully otherwise it would not have been possible. Acknowledgement is not only a ritual, but also an expression of indebtness to all those who have helped in the completion of this project. I would like to express my deepest thanks to my project guide _________________, for his guidance which extended me throughout my project. I thanks to Prof. ______________ for his supervision, encouragement and valuable inputs. I also would like to thank ______________ (Colleague) who helped me to improve the quality and layout of the project. Lastly I would like to thank all those, who have been directly or indirectly helped me in making the project.

3

Certificate from the Guide

This is to certify that the project work titled “Reward System Linked to Performance - a

broad overview” in Tata Communications is a bonafide work carried out by Janardan

Raccha (Roll No- ___________, a candidate for the Post Graduate Diploma examination

of the Welingkar Institute of Management under my guidance and direction.

Signature of Guide

Name :

Designation : Sr. Manager- Human Resources

Address :

Date: Place:

4

TABLE OF CONTENTS

Sr. No. Topics Page

1 Executive Summary 5

2 Objectives 6

2

Introduction to Company

Introduction-Tata Group

Tata Group at Glance

Our Businesses

7-10 7 8 8

3

Tata Communications Limited

Introduction

Vision, Commitment, Strategy, Our People

Its Competitors

Its Divisions

11-15 11 11 14 15

4

Reward System linked to Performance- Theoretical Background

Introduction – Reward System

Rewards & Recognition

Purpose of Reward System

Designing a Reward System

Reward System Linked to Motivation

Types of Rewards & Awards

Introduction- Performance Management

Limitation of Reward System

Recent trends of Reward System in India

16-30

16 17 18 18 20 23 30 34 35

5

Reward System linked to Performance in Tata Communications

PMS Process at TCL

Energy Curve Consolidation / Calibration

Talent Conclave

Performance Improvement Plan- PIP

Internal Job Posting Policy- IJP

Reward system Recognition in TCL

Rewards System Linked to Leadership Signatures

Awards Category

39-56

41 46 47 47 48 48 48 51

6 Conclusion 57

7 Bibliography 58

8 Annexure-I (Forms) 59-64

5

EXECUTIVE SUMMARY: In a competitive climate, more business owners are looking at improvements in quality while reducing costs. Meanwhile, a strong economy has resulted in a tight job market. So while small businesses need to get more from their employees, their employees are looking for more out of the businesses. Employee rewards and recognition programs are one method of motivating employees to change work habits and key behaviors to benefit a small business. The objective of this project is to discuss the rewards and recognition policies and the process involved with reference to Tata Communications. It always believe that flexibility and responsiveness is everything critical in long term success. These rewards aim to recognize and reward outstanding individuals and teams who have gone beyond their role requirements and have taken initiatives that have had a positive impact to its short term and long term growth objectives. For this huge data collection, I prepared questionnaire and met HR of Tata Communications to understand their process. After that I made a summary of this data in Excel sheet and discussed with my project guide, who helped me to select the best one. Immediately we started implementing those processes in our HR functions. While doing the project we came across with some drawbacks but we managed to make corrections as per our need. Overall it was a great learning experience as I have been interacted with key peoples of the organization due to which it not only helps me to learn the process of rewards and recognition but gave me to enhance my skills & knowledge. I also come to understanding that reward system is one of the strategic tool to build a strong performance culture in the organization. It makes sure that the unit performs in a sustainable and increasing manner. So in the same way every individual employee would be able to improve his /her performance considerably.

6

OBJECTIVES:

To Study of various reward systems in TCL.

Study of linkage between PMS & reward system.

To identify the gaps in the current reward system.

Reward System is an official system and this is done by performance-based measures, objective or subjective.

To reward employees fairly, equitably and consistently in correlation to the value of these individuals to the organization.

7

INTRODUCTION TO THE COMPANY TATA GROUP AND ITS HISTORY:

Tata Group is an Indian multinational conglomerate company headquartered in Mumbai, Maharashtra, India. It was founded in 1868 by Jamsetji Tata as a trading company with Rs. 21000 capital. It has operations in more than 80 countries across six continents. Tata Group has over 100 operating companies with each of them operating independently. Out of them 32 are publicly listed. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan Industries, Taj Hotels and Tata Communications. The Group's major companies are beginning to be counted globally. Tata Steel became the sixth largest steel maker in the world after it acquired Corus. Tata Motors is among the top five commercial vehicle manufacturers in the world and has recently acquired Jaguar and Land Rover. TCS is a leading global software company, with delivery centres in the US, UK, Hungary, Brazil, Uruguay and China, besides India. Tata Tea is the second largest branded tea company in the world, through its UK-based subsidiary Tetley. Tata Chemicals is the world's second largest manufacturer of soda ash. Tata Communications is one of the world's largest wholesale voice carriers. Tata Group remains a family-owned business, as the descendants of the founder (from the Tata family) own a majority stake in the company. Tata Sons is the promoter of all key Tata companies and holds the bulk of shareholding in these companies. The chairman of Tata Sons has traditionally been the chairman of the Tata group. About 66% of the equity of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. The Tata Group and its companies & enterprises is perceived to be India's best-known global brand within and outside the country as per an ASSOCHAM survey. In 2009, annual survey by the Reputation Institute ranked Tata Group as the 11th most reputable company in the world. The survey included 600 global companies. The Tata Group has helped establish and finance numerous quality research, educational and cultural institutes in India. The group was awarded the Carnegie Medal of Philanthropy in 2007 in recognition of its long history of philanthropic activities. The combined market capitalization of all the 32 listed Tata companies was INR 6.8 Trillion ($ 109 billion) as of March 2014. Tata receives more than 58% of its revenue from outside India. The Group employs around 350,000 people worldwide. The Tata name has been respected in India for 146 years for its adherence to strong values and business ethics. It

8

encompasses seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals.

TATA GROUP AT A GLANCE

OUR BUSINESSES Chemical Sector

Tata Chemicals

Rallis India

Tata Pigments Limited

General Chemical Industrial Products

Brunner Mond

Magadi Soda Company

$109 Billion Annual Revenue

~ 60% Non India

Over 150 Years in Operations

Only Indian Entity On Forbes’ List of World’s 20 Most Reputed Companies

#45 Worldwide Brand

(Source: Brand Finance, 2012)

544502 (till 2013)

Employees Worldwide

#11 Most Reputed Company

(Source: Reputation Institute, 2009)

UK Group’s Largest Market

outside India

Over 100 Operating Companies in 7

Sectors across 6 Continents

9

Consumer Products

Tata Tea Limited

Tata Global Beverages

Titan Industries

Voltas

Tata Swach

Tata Salt

Energy

Tata Power

Tata Power Delhi Distribution Limited

Tata Power Solar

Jamshedpur Utilities and Services Company

Tata Projects Engineering

Tata Motors

Tata Technologies Limited

Tata Consulting Engineers Limited

Telco Construction Equipment

Voltas Global Engineering Centre

Tata Advanced Materials Information systems and communications

Computational Research Laboratories

Tata Consultancy Services Ltd.

Neotel

Tata Teleservices

Virgin Mobile India

Tata Communications

VSNL International Canada

10

Services

Tata AIG General Insurance

Taj Hotels

Tata Housing Development Company Limited

Tata Africa Holding

Ginger Hotels

Tata Capital

Steel

Tata Steel

Tata Sponge Iron

Tata Bearings

TM International Logistics

Tayo Rolls

Tata Steel Europe

11

TATA COMMUNICATIONS

Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications Leverages its advanced solutions capabilities and domain expertise across its global and pan India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers.

The Tata Global Network included on of the most advanced and largest submarine cable networks, a Tier-1 IP network, with connectivity to more than 200 countries across 400 PoPs, and nearly 1 million square feet of data center and colocation space worldwide. It currently has a cable network of more than 23500 kilometers.

Vision Deliver a new world of communications to advance the reach and leadership of our customers. Commitment Invest in building long-lasting relationships with customers and partners and lead the industry in responsiveness and flexibility Strategy Build leading-edge IP-leveraged solutions advanced by our unmatched global infrastructure and leadership in emerging markets.

12

Our People Our global office holds talent from six continents. Our vast pool of expertise in the communications and technology sectors embody our commitment to conduct ethical and sustainable business. Tata Communications continues a tradition of developing and deploying innovative solutions for existing and emerging markets worldwide. Our international team reflects the dynamic and diverse market Tata Communications Serves.

State-of-the-art infrastructure

Over 210,000 km of owned fibre

Fibre ring around the globe

400 PoPs

Over 15 terabits of International bandwidth lit capacity

More than 1 million sq. ft. of data centre space

Industry leader

#1 international voice carrier

#1 submarine cable owner

#5 IP transit provider

Fastest growing Tier-1 operator

#1 in enterprise data in India

#2 in enterprise and wholesale data in South Africa Tata Communications in Numbers

53 Billion Minutes of International Voice Traffic

42 Data Centers with more than 10,000 racks and one million square feet

3500 Petabits every month on our Internet backbone

73 Million Voice Transactions handled every day

15 Terabits of International Bandwidth Lit Capacity

High Level Operating Structure

13

40 Nationalities

36.6 Average Age

7750+ Employee Worldwide

30% Out-side India

2 Home Markets India & South Africa

Tata Communications Uniting Assets:

Global Organization

14

Corporate Services

Organization Chart

Competitors of Tata Communications

Vodafone Reliance Communications Limited Idea Cellular Limited Bharti Airtel Limited Maharashtra Telephone Nagar Limited Bharat Sanchar Nigam Limited

MD & Group CEO

Business Units BU Shared Services

CMO & CEO Nextgen Business

Chief Financial Officer

General Councel

Human Resources

Business Excellence

Chief Strategy Officer

Global Voice Solutions

Global Enterprise Services

Growth Ventures Group

Global Carrier Services

Neotel

Customer Service & Operations

Product Management, Engineer & IT

Global Network Services

15

Joint Venture Structure

TCL is having following Divisions

Global Voice Solutions

Global Enterprise Services

Global Carrier Services

Growth Venture Groups

Customer Service & Operations

Tata Communications Transformation Services Limited

Tata Communications Payment Solutions Limited

TATA Group

45.15%

BSNL

26%

Share

Holders

28.85%

TATA

COMMUNICATIONS

16

INTRODUCTION OF REWARD SYSTEM - A THEREOTICAL BACKGROUND Wilson (1995) defines reward systems as follows: “A Reward system is any process within an organization that encourages, reinforces, or compensates people for taking a particular set of actions. It may be formal or informal, cash or noncash, immediate or delayed”. It can also be defined as “a structured method of evaluating and compensating employees based on their performance”. Rewards are what employees receive for performing well. Sometimes these rewards come from the organization in the form of money, recognition and promotions. Rewards can also consist of feelings from having performed well in work. It can be said that rewards are very powerful motivators of performance. Organizations need various types of performance from their employees. They need them to become active members of the organization, they need them to do their job as it has been defined and they need their employees to improve their performance. In order to achieve improvements in performance different reward systems must be applied. In a competitive business climate, more business owners are looking at improvements in quality while reducing costs. Meanwhile, a strong economy has resulted in a tight job market. So while small businesses need to get more from their employees, their employees are looking for more out of the businesses. Employee rewards and recognition programs are one method of motivating employees to change work habits and key behaviors to benefit a small business. IMPORTANCE OF REWARD SYSTEM It is important for one's employees to know they are valued. W.P. Brick (2012) elevates this importance in Public Manager by writing, "Recognition and employee engagement are so critical to the operations and culture of a modern workplace they can only be ignored at great peril." In Entre Leadership, Dave Ramsey (2011) adds, "Where there is no recognition, it is very difficult to have passionate, creative, motivated team members". When it comes to valuing employees, the manager has nothing to lose when giving the recognition but much to lose by withholding praise. This is not to say that employees

17

should be recognized for anything and everything, but that when a job is done exceptionally well, there should be recognition. Employee reward and recognition programs are of immense importance to an organization and will benefit the employee along with the organization. Most of what has been mentioned is considered common sense, but common sense does not seem very common. People should be rewarded and recognized for a job well done but often get overlooked in a corporation's pursuit of profit and a market advantage. But employee rewards and recognition can bring an organization profit and a market advantage! It all comes down to a firm's ability to understand the human need for acceptance, the definitions for rewards and recognition, the importance and benefits, and finally the various means of financial and nonfinancial options. Whether it costs money or is free for an organization, there is a need for employees to be acknowledged and it must be intentional. REWARDS VS. RECOGNITION Although these terms are often used interchangeably, reward and recognition system should be considered separately. 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 considered the domain of large companies, 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. As noted earlier, although employee recognition programs are often combined with reward programs, they retain a different purpose altogether. They are intended to provide psychological rewards a financial benefit. Although many elements of designing and maintaining reward and recognition system are the same, it is useful to keep this difference in mind, especially for small business owners interested in motivating staffs while keeping costs low. DIFFERENTIATING REWARDS FROM MERIT PAY AND THE PEFORMANCE APPRAISAL 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

18

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 emphasized excellence or achievement rather than basic competency. Merit pay increases, as a result, are not part of an employee reward system. Normally, they are increase for inflation with additional percentages separating employees by competency. They are not particularly motivating since the distinction that is usually made between a good employee and an average one is relatively small. In addition, they increase the fixed costs of a company as opposed to variable pay increases, such as bonuses, which have to be “re-earned” each year. Finally, in many small businesses teamwork is a crucial element of a successful employee’s job. Merit increases generally review an individual’s job performance, without adequately taking into account the performance within the context of the group or business. PURPOSES OF REWARD SYSTEMS

To recognize individual and team efforts

To re-enforce positive behaviors

To create a better working environment

To have a system that recognizes as many people as possible.

To attract and retain good employees

To reduce the absenteeism

To facilitating organizational culture and strategic objectives. DESIGNING A REWARD PROGRAM The key characteristics of 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 behaviors, based on the individual or group’s previous achievements.

Determination of appropriate rewards.

Communication of program to employees.

19

Reward system are concerned with two major issues: Performance and Rewards. Performance includes defining and evaluating performance and providing employees with feedback. Rewards included bonus, salary increase, promotions, stock awards and perquisites. Large corporations with several different businesses may have multiple reward systems. And while they may share some fundamental philosophies and values, they may differ accordingly to the particular business setting, competitive situation, and product life cycle. Thus, multiple reward systems can support multiple cultures within one organization. These components will be designed, developed and maintained on the basis of reward strategies and policies which are created within the context of the organizations between strategies. 1. Improve Organizational Effectiveness: Support the attainment of the organization’s mission, strategies, and help to achieve sustainable, competitive advantage. 2. Support and Change Culture: Under pin and as necessary help to change the organizational culture as expressed through its values for performance innovation, risk taking, quality, flexibility and team working. 3. Achieve Integration: Be an integrated part of the management process of the organization. This involves playing a key role in a mutually reinforcing and coherent range of personal policies and process. 4. Manageable: It helps to manage the undue administrative burdens imposed on managers and members of the personal department. 5. Motivate Employees: Motivate employees to achieve high level of quality performance. 6. Increased Commitment: Enhance the commitment of employees to the organization that will a) want to remain members of it, (b) develop a strong belief in and acceptance of the values and goals of the organization; and (c) be ready and willing to exert considerable effort on its behalf. 7. Fairness and Equity: Reward assesses can upgrade competence and encourage personal development.

20

8. Improved Skills: The employees can upgrade competence and encourage personal development. 9. Improved Quality: Help to achieve continuous improvement in levels of quality and customer service. 10. Develop team working: An effective award system improves co-operation and effective team working at all level. REWARD SYSTEM LINKED TO MOTIVATION One of the primary purposes to use rewards in companies is to motive the employee to perform well. When we talk about motivation from managerial prospective it is important to bear in mind that: “You can’t motive other people. You can only influence what they’re motivated to do”. In other words we do things because it will fulfil some current or future personal goal or desire we have. It is therefore important for the corporate management to identify what motivates their employees and try to join their personal objectives with the ones of the company.

MASLOW – HIERARCHY OF NEEDS The motivation process can be described in the term of need theory which states that it is an unsatisfied need that motivates behavior. The best known theory within this category is written by Abraham H Maslow (1908-1970). An American psychologist in 1954. Maslow’s hierarchy of needs is one of the most famous theories in the term of individual motivation. Human need are by him divided into five different levels, physiological, safety, belongings, esteem and self-actualization. Maslow’s hierarchy of needs always illustrated in the pyramid, shown in the following figure.

21

MASLOW’S NEEDS CLASSIFIED INTO FIVE CATEGORIES: Physiological needs – are basic needs for survival such as food, water & sleep. Safety needs – consist of variety of safety needs such as security of employment, health & family. Social need – consist of friendship, family, love & intimacy. The esteem needs – presents the desire to be accepted & valued by others. Here we find the concept such as self-esteem, confidence, achievement, respect for others and respect by others. The need for self-actualization – here we find the motivation to one’s own maximum potential, self-fulfillment and try to become everything that one is capable of becoming. It includes the concept as morality, creativity, spontaneity, problem solving and some more. HERZBERG’S MOTIVATION-HYGIENE THEORY (TWO FACTOR THEORY) To better understand employee attitudes and motivation, Frederick Herzberg performed studies to determine which factors in an employee’s work environment caused satisfaction or dissatisfaction. He published his findings in the 1959 book the Motivation to work. The following table presents the top six factors causing dissatisfaction and the top six factors causing satisfaction, listen in the order of higher to lower importance.

22

Factors Affecting Job Attitudes

Leading to dissatisfaction Leading to Satisfaction

Company Policy Achievement

Supervision Recognition

Relationship with Boss Work itself

Work conditions Responsibility

Salary Advancement

Relationship with Peers Growth

From the above table of results, one observed that the factors that determine whether there is dissatisfaction or no dissatisfaction are not part of the work itself, but rather are external factors. Herzberg argues that these provide only short-run success because the motivator factors that determine whether there is satisfaction or no satisfaction are intrinsic to the job itself, and do not result from carrot and stick incentives. EXPECTANCY THEORY Expectancy Theory (1964) is a motivational theory written by Victor Vroom, born 1932, in Canada. The theory states that motivation will be strong if the individual can expect that their effort & contribution will give meaningful rewards. It means that motivation is more likely when a clear relationship is exists between performance and outcome and the outcome is satisfying needs.

23

Motivation in work can be reached in two ways. Firstly, people can motivate themselves by working with things that satisfied their personal needs. Secondly people can be motivated by management using incentives such as pay, promotion, praise. TYPES OF REWARDS Rewards serve many purposes in organizations. They serve to build a better employment deal, hold on to good employees and to reduce turnover. The principal goal is to increase people's willingness to work in one’s company, to enhance their productivity. Most people assimilate "rewards", with salary raise or bonuses, but this is only one kind of reward, extrinsic reward. Studies proves that salespeople prefer pay raises because they feel frustrated by their inability to obtain other rewards, but this behavior can be modified by applying a complete reward strategy. Besides verbal appreciation, tokens of appreciation, rewards (award trophies, framed certificates, special parking spaces, gift cards, pens or a free day off.) etc. are generally given to employees. The principal difficulty is to find a balance between employees' performance (extrinsic) and happiness (intrinsic) There are two kinds of rewards: Extrinsic Rewards- Tangible / Concrete Rewards. Intrinsic Rewards- Non Tangible / to give satisfaction to Individual.

24

Extrinsic

Rewards

Intrinsic Rewards Interesting work Responsibility Recognition Achievement Task variety Task Significance Job feedback

Financial Nonfinancial

Performance-based Membership-based

Career rewards Job security Career growth Self-development

Social rewards Status symbols

Title

Office

Preferred schedule

Direct Compensation

Basic Pay

Merit Pay

Bonus

Direct Compensation

Cost-of-living increase

Seniority-based increase

Education-based

increase

Indirect compensation

Public protection

Social security

Unemployment premiums

Disability premiums

Private protection

Private protection

Pension

Savings

Life Insurance Paid Leave

Training

Illness

Vacation Life cycle

Child and elder care

Parks and playgrounds

Types of Rewards

25

Various categories of rewards that are given and can be given are: Basic Pay: Basic Pay is defined as the rate fixed by applicable law or regulation. Examples of special types of pay included in Basic Pay are:

Night differential pay for wage employees Environmental differential pay for employees who work under hazardous

situations. Premium pay for groups such as law enforcement officers Locality-based comparability payments.

It is an essential factor which is closely related to job satisfaction and motivation. Although pay may not be a reward as this is a static amount which an employee will be paid every month, it will be considered as a reward if similar worker is paid less. Additional Hour’s Rewards: This is similar to that of overtime. However, it is paid to employees if they put in an extra hour of work for working at unsocial hours or for working long hours on top of overtime hours. Commission: Many organizations pay commission to sales staff based on the sales that they have generated. The commission is based on the number of successful sales and the total business revenue that they have made. This is a popular method of incentive. Performance Related Pay: This is typically paid to employees who have met or exceeded their targets and objectives. This method of reward can be measured at either team or department level. Profit Related Pay: Profits related pay is associated with if an organization is incurring a profit situation. If the organization is getting more than the expected profits, then employees receive an addition amount of money that has been defined as a variable component of the salary.

26

Payment by Results: This is very similar to that of profit related pay. This reward is based on the number of sales and total revenue generated by the organization. Piece Rate Reward: Piece rate reward is directly related to output. The employees get paid on the number of pieces that they have produced. These pieces will be closely inspected to make sure that quality standards are being met.

Bonuses: Bonuses will be paid to employees who have met or exceeded their targets and objectives. This is aimed at employees to improve their performance and to work harder. There are several types of bonus programs followed by industries, some are as follows: Current Profit Sharing, Gain Sharing, Spot Bonus Award, Noncash Bonus, Sign-on Bonus, Mission Bonus, Referral Bonus, Retention Bonus, Holiday Bonus, etc. Recognition: Employees will not always be motivated by monetary value alone. They do require recognition to be motivated and to perform well in their work. Job Enrichment: This is a common type of recognition that is aimed at employees to get motivated. Job enrichment allows more challenging tasks to be included in the day-to-day tasks performed by the employee. Job Rotation: Unlike job enrichment, job rotation refers to shifting employees between different functions. This will give them more experience and a sense of achievement. Teamwork: Teamwork is also considered as recognition. Creating teamwork between team members will improve performance at work. Social relationships at work are essential for any organization. Empowerment: Empowerment refers to when employees are given authority to make certain decisions. This decision making authority is restricted only to the day to day tasks.

27

Training: Many organizations place a greater emphasis on training. This is considered as recognition for employees. Training could vary from on the job training to personal development training.

Benefits: Another element in the total rewards approach includes employee benefits. Benefits are programs that an employer uses to supplement the cash compensation that employees receive. These benefits provide a level of security for employees and their families, and may include health care insurance, time off, disability insurance and retirement programs. As such, benefits fall under the “satisfier” category. AWARDS: This again is an important type of recognition that is given to employees who perform better. Organizations have introduced award systems such as best performer of the month etc. and all these will lead employees to perform better. Rewards are basically the methods to extrinsically motivate employees. These awards can be MONETARY or NON MONETARY. Some of the commonly given awards in various organizations are: Service Awards: Each year that an employee commits to an employer, he offers great advantages to the business or organization. Employees gain more knowledge of their position and responsibilities over time, and the company does not have to set aside time and money hiring and training new employees. Employers often reward employees who remain committed with a recognition pin or a certificate acknowledging the number of years of continuous service. Employers may further reward long-term employees with an extra gift such as a watch or a special desk set, typically engraved with the employee’s name and the date they received the honor. Employee of the Month: Some workers will consider being designated Employee of the Month a great honor. This award is commonly given to the one employee each month who has given exceptional service, had perfect attendance and gone the extra mile for the company to ensure all

28

customers are given the service they expect. These employees are often recognized during monthly staff meetings with a plaque or certificate recognizing their efforts. A designated parking space is another good idea, and displaying the plaque where customers can see it adds to the honor. Employers should take care in choosing employees in a manner that shows no favoritism. If others perceive that employees are chosen unfairly, the award can be counterproductive. Attendance Awards: Companies depend on employees to be punctual and perform tasks to their potential so that the work load can be evenly distributed. Employees who strive to be at work during every scheduled shift and never come in late deserve to be recognized in a special way. Perfect attendance awards can be given in the form of a certificate, plaque or even as a cash bonus. Sometimes employers will give employees with perfect attendance a day off with pay or a gift certificate to a local restaurant in appreciation for their commitment to the company. Safety Awards:

Safety awards are a great way for employers to recognize employees or teams for their

continued adherence to safety guidelines. This kind is typically awarded when an

employee or a group files no incident or accident reports over a given period of time, such

as a month or year. These acknowledgements are often expressed in terms of the man

(or woman) hours since the team last experienced in injury. Cash bonuses or gifts such as

tickets to popular local events make great safety awards.

Company Advancement:

The ultimate reward that every employee tends to strive for is company advancement.

Employees generally work hard to earn recognition in an attempt to be promoted to a

higher position within the company or receive an annual raise in pay. Employers should

choose candidates for advancement carefully, avoiding favoritism and ensuring that the

most reliable and skilled employees are advanced to higher positions.

29

Special Operating Unit Award:

Individual bureaus may establish award programs which are appropriate to their

particular interest in recognizing certain group of employees. There are a large variety of

programs, ranging from recognition for scientific accomplishments to employee of the

year. These award programs can be cash or non-monetary.

Cash-in-Your Account Award:

A small cash award designed to recognize employees for going the extra mile in getting

the job done. These awards do not recognize overall performance, but rather specific

instances of exemplary performance. Awards range from Rs. 1000 to Rs. 10000 in Rs. 1000

increments.

Suggestion Award:

Under the suggestion program, employee are granted an award for formal suggestions

which have been evaluated and adopted. The amount of the award is determined by the

amount of tangible and intangible benefits of the idea.

On the Spot Award:

A small award which is granted as a means to recognize employees for those day-to-day

efforts which contribute in a special way to get the job done.

Certificates of Appreciation:

Certificates granted to employees or non-employees who have made outstanding

contributions or who have performed significant services to the Department.

External Awards:

Awards sponsored by other agencies and non-government organizations given to

corporate employees.

30

Group-Based Reward Systems

Group-based reward systems are based on a measurement of team performance, with

individual rewards received on the basis of this performance. While these systems

encourage individual efforts toward common business goals, they also tend to reward

under-performing employees along with average and above-average employees. A

reward program which recognizes individual achievements in addition to team

performance can provide extra incentive for employees.

WHAT IS PERFORMANCE MANAGEMENT It can be defined as a continuous process of assessing and measuring the performance of an individual and aligning it with the organizational goals. It is the job of the HR people to design an effective performance management system. Expansion for the word “Perform”, best explains it. P – Potential E – Enthusiasm R – Reliability F – Flexibility O – Orientation R – Reengineering M – Motivation Why Link Reward to Performance To connect two ends of the rope, a knot is required; to make it lengthy and useful for long run. Likewise, the tie up between the reward and performance should be made for employee retention and their commitment to work, which ultimately improvise the contributing factor of the employee. Employees should perform well to be rewarded and the approach designed for this is “Pay for Performance”. Apart from the base pay, which is based on job description, a variable pay should be announced for their outstanding performance. Although the pay raise motivates the employees to an extent, ultimately they want them to be appreciated and recognized in a society for their work, here comes the employee recognition program. Many employees become less committed to work not because of their low pay structure, but for the lack of recognition. Both types of rewarding

31

system should be ensured for higher motivation, retention, engagement and job satisfaction. A simple example for performance based reward system can be best explained by the game of cricket. When a bowler or batsman performs well in a match, his performance is rewarded by the cricket council through the title “Man of the Match” and cash award. It motivates the winner and also the team players to perform well for their team. PERFORMANCE MANAGEMENT, REWARDS AND AWARDS Performance management is the systematic process by which an organization involves its employees, as individuals and members of group, in improving organizational effectiveness in the accomplishment of agency mission and goals. Employee performance management includes:

Planning work and setting expectations.

Continually monitor performance.

Developing the capacity to perform.

Periodically rating performance in a summarized fashion, and

Rewarding good performance.

Planning

Rewarding Monitoring

Rating Developing

32

Performance appraisals and rewards are designed to show recognition to employees. Those who exemplify outstanding abilities in the workplace are celebrated through an appraisal and reward system. Managers may offer employee praise in a one-on-one setting, such as a performance evaluation, or in a group setting among peers. Archer North, a company that designs and develops employee performance appraisal and corporate evaluation systems, says that social recognition is powerful and is an effective forum for showing value in employees. Employee recognition programs boost the morale of employees and positively change the health of an organization. By instituting performance appraisal and reward systems, an employer lets its workers know that their hard work pays off and is appreciated. Reward system is a part of performance appraisal. When an employee do performance appraisal he uses reward system to appreciate the work done by the employee. Every company has its own reward system which has to be linked with its performance appraisal method. Reward systems are concerned with two major issues: performance and rewards. Performance includes defining and evaluating performance and providing employees with feedback. Rewards included bonus, salary increase, promotions, stock awards and perquisites. Purposes of Performance Management The purposes of performance management may be grouped as under: a) Informational Purpose

To let an employee know how his performance compares with job standards.

To assist in identifying special talents and abilities.

To identify employees needing performance improvement.

To allow employees to evaluate management. b) Motivational Purpose

To establish closer employer-employee relationships and communicate the job development. Requirements and standards of performance in a periodic basis.

To provide financial rewards or recognition for a job well done.

To work out plans to solve performance problems.

To encourage initiative, creativity and develop a sense of ownership amongst the employees.

33

c) Developmental Purpose

To identify individual employee training needs.

To identify individuals for potential development.

To help the employee strengthen current performance and prepare for higher responsibilities.

To show organizational interest in attracting and retaining capable employees. d) Managerial Purpose

To translate organizational goals into individual job/performance objectives.

To communicate management’s expectations regarding employee performance.

To provide feedback to the employee about job performance in the light of management’s expectations.

To coach the employee on how to improve job performance on a periodic basis.

To diagnose the employee’s strength and weakness.

To determine what kind of development activities might help the employee better utilize his competencies / skills on the job.

Functions of Performance Managements:

To communicate vision of its objectives to all its employees.

To set departmental and individual performance targets which are related to wider objectives.

To conduct formal review of progress towards these targets.

To use the review process to identify training, development and reward outcomes and

To evaluate the effectiveness of the whole process in order to improve effectiveness.

Benefits of Performance-based Rewarding approach An effective Performance-based Rewarding approach can bring out multiple benefits to an organization and employees,

Decreased attrition rate, which empowers employee retention in long run and commitment. Due to decreased attrition rate and increased employee retention, recruitment cost is less which helps in the financial stability of the organization.

Motivate employees to perform better, aligning with the organizational goals. Employees get a clear insight of what should be done to meet the goals.

34

Employee involvement (Participation Management) is increased which results in autonomy, more productivity and satisfaction. Employees feel that they are part of a big success, enabling more confidence and innovation in work.

Rather than working on routine jobs, employees volunteer to work on challenging jobs to increase their recognition levels in the working society. It enforces healthy competition among individuals to perform better.

Employee gets a chance to learn and enhance their skills, which highlights their development in career.

For the real success of the system, it should be implemented without any bias or oversight. When employees perform well, he should be acknowledged rightly by the supervisors. HR department should not make this process to follow over a night; its importance has to be stressed to the supervisors and employees at all levels. When a perfect system is implemented, it results in higher retention of talented employees and greater profits to the organization.

LIMITATIONS OF REWARD SYSTEM

Feeling of discrimination or dissatisfaction among employees (if they feel the reward

assessment process is not transparent).Staff morale could fall if there is a large difference

in the amount of reward being paid out to people doing similar work. Staff may become

too focused on individually earning those rewards/bonuses that they forget to work in

the best interests of the team as a whole. Competition can be good but if it’s too

aggressive it can be detrimental. There will always be an element of judgment required

to administer such a system. Someone will have to rate the performance of staff. This

judgment may end up being too subjective rather than objective. Some functions are

support roles in nature (and therefore may not attract as much rewards as other roles

such as sales). There must be a good balance of incentives for these admin/support staff

or else they will not feel appreciated.

35

RECENT TREND OF REWARD SYSTEMS IN INDIA

Reward systems helps in increasing performance and creating happier employees.

The greatest management principle is that the things that get rewarded get done. All

reward systems are based on the assumptions of attracting, retaining and motivating

people. Financial rewards are an important component of the reward system, but there

are other factors that motivate employees and influence the level of performance.

Those organizations which gives the maximum reward attracts and retains most people.

Higher rewards will give higher satisfaction. This will lead to lower turnover and more job

applicants. It is difficult to retain the best performers in any organization. They will get

higher offers from competitive organizations and may leave the company. For retaining

the best performers, the organization needs to reward people at all level above the

reward standards in similar organizations.

In some organization, reward system is based on performance and skills of the employees.

So higher rewards will motivate skilled employees to perform better. In hierarchical

organizations, reward system acts as a motivation for lower cadre employees to learn

those skills which will lead to promotion to the higher levels. The reward system

contribute to the overall culture and climate of organizations.

Reward systems are a major cost factor in many organizations. There are some criteria

for building effective reward systems.

Give Value for the employee’s preference in the reward system. Employees prefer

rewards in different ways like cash awards, plaques, recognition in award

ceremonies and company newsletters.

Reward systems should simple and specific. Easy understanding of the system will

make the system work effectively. Elaborate procedures, evaluations and review

by different levels will lead to confusion among people. A line of sight should be

maintained between rewards and actions.

Rewards should be timely. The recognition/rewards should be provided frequently

enough to make performers feel valued for their efforts.

Reward systems should be fair and effective.

It should be reliable, that is, the program should operate according to its principles

and purpose.

36

Involve people in the formulation of the reward system. By ensuring the

participation of the people in the reward system, the company can empower them

to do the needful.

For most people, the most important reward is the pay they receive for their work.

Effectively planned and administered reward systems will enhance motivation thus

performance also. Employees who work hard and produce better quality products should

get higher pay than the poor performers. The employees should be satisfied with the

rewards they receive for their good work. They should be given extrinsic rewards like pay,

promotion and other status symbols. This will give them a feeling of competence,

achievement, personal growth and self-esteem.

In India, rewards are given in the form of financial benefits, incentives, profit sharing, gain

sharing and stock options. Financial rewards are given to employees for their

achievements. Pay is of many types like Competence related pay, Skill-based Pay, Team-

based pay and merit pay.

RECENT TRENDS – A FEW EXAMPLES

It’s an annual affair at Genpact to identify 35 star leaders within the company and fly their

families on a vacation. This is apart from regular ritual of recognizing high performing

leaders in every board meeting. Even as salary levels soar and are a given in the current

war for talent, more and more companies are fumbling for the ideal mix of non-

compensation rewards to retain leaders.

Retaining and rewarding leadership is a hot button issue facing most organizations.

Increasing complexity of hiring leadership talent in the face of burgeoning market

demand is bringing companies under pressure to retain their top talent. “The only way to

reward and retain top leadership is by sharing the success of the company with them,”

says Piyush Mehta, senior V-P, Genpact.

It is common to see firms ring fence their senior executives by devising long-term wealth

certain opportunities in the form of retention pay, deferred bonus plans, stock options

and shadow options. Companies are arriving at a reward system, which is linked with the

company’s performance.

As a business leader in Accenture moves higher, the variable component in his

37

compensation goes up. “Equity has been quite effective as a leadership reward system.

Conversely too, it works well as it makes leaders conscious of the fact that they carry the

weight of the organization,” says Rahul Varma, senior HR director, Accenture India.

Employee stock plans offered by Indian firms in the past few years have been able to

create the right setting than that MNC counterparts, says K Sudarshan, managing partner,

EMA Partner International. “Key employees feel a lot closer to centre of action with a

belief that they are making a difference to the fortunes of the organization as opposed to

large MNCs where the India business is still a small percentage of their overall numbers,”

he says.

The attractiveness quotient for Indian companies is increasing all the time. Even though

we see emergence of several “employee millionaires”, analysis caution, relying on

generous compensation as the only strategy for retaining your key resources is a sure shot

recipe for disaster.

There is interplay of multiple factors which makes the organization a preferred

destination for top talent and creates a long-term sustainable employer brand. That’s why

the best employers need not necessarily be the best paymasters.

“First and foremost is to create a sense of ownership and belonging to the organization.

Successful organizations have a culture which supports and encourages entrepreneurial

behaviour, the freedom to make informed business decisions and above all eliminates the

fear of failure,” says Mr Sudarshan. This will work only if it goes hand-in-hand with

standard compensation levels in the industry.

HR fraternity believes ICICI Bank has done well on both fronts. They have provided great

opportunities to their stars plus have locked in their key people with significant stock

options. It also helped that ICICI bank is growing more rapidly when compared to HDFC

Bank and there is a great passion at work one can experience with senior people in ICICI

group.

“HDFC Bank has largely adopted the ESOP route to reduce fixed cost but this has backfired

in the long term because people moved on once the stocks vested and their exit barriers

significantly reduced,” says a head of headhunting firm.

Bharti has largely taken the compensation route both fixed as well as long-term wealth

38

creation opportunities for their people. Hutch has always retained their key people on

the basis of the work culture and freedom to operate though the compensation levels

have always been pegged lower than Bharti and Reliance.

Aditya Birla Group has built a great sense of belonging for their leaders and has always

been looked upon with the larger picture in mind. The chairman Kumar Mangalam Birla

says a company executive also deploys his personal touch with his key managers who are

valued.

“There is a great sense of security built in for key people,” adds a senior HR consultant

who has worked with the group. The Tata Group has always institutionalized the group

and managers are empowered to take critical decisions like no other business house and

there is a deep sense of loyalty to the group at senior levels.

An ambitious business leader, believe HR fraternity, is constantly evaluating headroom

for professional learning and growth and it is critical that the organization is capable of

creating such opportunities. This keeps senior managers motivated with fresh challenges

all the time. “Today, there’s a need to customize rewards – both monetary and otherwise

– to suit individual’s specific needs,” says Mr. Mehta of Genpact.

39

REWARD SYSTEM LINKED TO PERFORMANCE IN TATA COMMUNICATIONS

TCL has developed an unbreakable bond with sound HR practices in an environment that

defies traditional roles and responsibilities. The company views its employees as assets,

which as to be utilized efficiently. The TCL senior management constantly keeps track of

the vast intellectual assets, their skills sets, the status of projects on which they are

working, and the number of people available for being placed in other projects. TCL

determines its manpower requirements based on inputs from senior consultants, who

provide information on changes in the technology and the potential demand for new skills

in the immediate future. This enables the HR department to plan and schedule

recruitment and training programs.

Figure 1 illustrates the role of HR, which evidently is that of a facilitator. So whether it is

recruitment or even career development, HR is the catalyst which initiates and

institutionalizes processes. To manage all the function of employees is herculean task but

the smoothness of operations is intriguing. The HR structure, which allows flexibility and

empowerment, is the solution.

TCL takes care of every aspect of Human Resource Management, from recruitment to

training and career development. The company combines its aim of recruiting skilled

employee with the broader objective of improving educational standard in India. TCL is

well recognized in the industry for its emphasis on employee training. Company is having

its own training center in Dighi, Pune, where induction and other training are conducted

by its expert trainer who provide functional and operational knowledge about the TCL

and its subsidiaries. It keeps decent amount of budget from its annual sales on training.

In addition to training, TCL also believes in grooming its employee into managers. In their

first couple of years at the company, employees are put to work on different technological

platforms and applications. The organization consciously does not try to develop its

employee as specialists, as it knew that they would become useless once their area of

specialization becomes obsolete. This approach was different from that of many other

companies, who stressed specialization of their workforce.

40

Corporate HR- Centre of Excellence

Learning &

Development

Talent Management

Talent Acquisition

Compensation

Management

Employee

Engagement

HR Information

System/Analytics

HR Shared Services

Role of HR in TCL

Vice President Human Resources

The HR Group at TCL

Corporate HR Regional HR Business HR

Figure 1

Figure 2

41

PERFORMANCE MANAGEMENT SYSTEM AT TCL Performance management system actually operates when whole system is designed carefully and it has been conveyed properly to employees in the same way. TCL follows an effective PMS system. The purpose of the Performance Management process is to have a systematic administration of the Performance Management activity in order to create a high performance culture in company and improve overall performance & capability of TCL. The goal setting process for employee is done in a manner that it enables employees to realize about their contribution to the organizations better performance. PERFORMANCE APPRAISAL TCL conducts appraisal twice a year.

Interim Review

Year-end Review Performance appraisal is based on a review of performance against set Goals, and assessment of Performance & Potential. It also captures employee aspirations and the support required by employees from the organization in the Career Planning section. GOAL SETTING FOR INDIVIDUAL EMPLOYEE The Performance Management Process is a continuous cycle that begins with Goal Setting. Mutual goal setting is a must for developing agreed-upon measures for performance review. Effective goal setting provides the framework needed for managers and direct reports to discuss and monitor progress and to assess results. All goal setting is done using the SMART technique and could involve quantitatively / qualitatively measurable goals or milestone linked goals as appropriate. The measures for the various goals are selected on the basis of their suitability for assessing whether the desired performance is happening. In case of role change during the year, employee needs to update his Goal-Setting document, readjust his KRAs and weightages within 2 weeks of moving into his/her new role.

42

GOAL SETTING PROCESS An Employee fills up KRAs and update JD forms in consultation with Manager and submit it to Manager through its employee portal. Once manager is validate and approve then it would be consider for review and If any changes are required, the Manager can make the change or send the form back to the employee for making the change. INTERIM REVIEW PROCESS Interim review is conducted every year to review the performance midway through, provide performance feedback to employees, revisit the Goals set for them and make any revisions, if required. YEAR-END REVIEW PROCESS FLOW CHART The annual Performance Management process plays a pivotal role in imparting a comprehensive and formalized view of progress and growth of employees. Year-end process start in following manner. 1) Self-Appraisal & Managers Review 2) Energy Curve Consolidation 3) Sharing of Rating & Final Review

43

1) Self-Appraisal & Managers Review

Employee Employee’s

manager (EM)

Employee’s manager

manager (EMM)

Employee completes

Self-Assessment and

sends the Year-end

review form to his

manager

Manager reviews the

Self-assessment done by

employee. Evaluates

employee’s performance

and potential EMM reviews rating and

energy curve for the team

EMM reviews individual

assessment form, ratings

and comments

EMM checks if assessment

confirms to the energy

curve requirement

(applicable for team size

=>40

If Self-

assessment

satisfactory?

Manager sends the form

back to the employee for

necessary changes, with

relevant comments

Rejects

rating with

comments

EMM approves rating

with comments and

sends to EMMM

Satisfa

ctory?

Completion of

Manager

Assessment

A

Manager

sends Year-

end review

form to EMM

X

X

44

2) Energy Curve Consolidation

Employee’s L3

Manager (EMMM)

BU HR

GMC Member

EMMM (L3) reviews energy

curve and rating for the

BU/Function

A

BU HR reviews energy

curve and rating for the

BU/Function

Review consolidated energy

Curve

EMMM (L3) checks if

assessment confirms to

the energy curve

requirement (applicable

for team size=>40

Changes

required?

Changes

required?

Sends the form back to the

EM, with comments,

specifying the change

Discuss with approver/BHR

for initiating changes

EM and EMM discuss with

BU HR, EM makes changes

to the rating on the system

Changes initiated by EMM

& EM. EM to make change

in rating in Prism

Satisfactor

y?

Approve overall rating &

energy curve

Prepares consolidated

energy curve for respective

BU/Function

Send energy curve to GMC

Send approval

B

EMM sends the form back

to the EM, with comments,

specifying the change

EM & EMM discuss with

EMMM. EM makes changes

in rating on the system

EMMM (L3) approves overall

rating and energy curve

NO YES

No YES

NO YES

45

3) Sharing of Rating & Final Review

HR Employee’s

Manager (EM)

Employee

B

Review by Global head

and Corporate TM team

System gets unlocked.

Employee rating visible

to the manager.

PMP ratings get locked in

Prism Set-up final review

meeting with

employee. Publish

Year-end assessment

& Final rating. Provide

feedback.

Energy curve reports

created for Talent

Conclave

Talent Conclave

BHR head initiates

changes in rating along

with EM & EMM, if any,

post Talent Conclave

Acknowledg

e Rating?

Acknowledge

assessment &

ratting

Request for

Reassessment

Employee clicks

on “Send to BHR”.

BHR consults with

Manager,

Reviewer, RHR

and GMC to make

the decision.

Manager to share

the final decision

on rating

(changed or not)

with the

employee

PMP

Completion

Corporate TM sends all

assessment forms to ‘next

step’ for publication of

rating

NO YES

46

ENERGY CURVE CONSOLIDATION/CALIBRATION

Energy Curve is the histogram distribution of the Performance-Potential rating. It shows the percentage/number of employees who are Best in Class, Vital contributor, Need Revving and Bottom Performer. a. It takes into account both Performance & Potential rating b. It is done for: a) Team b) Function c) Level d) Company c. For a function/group, the distribution needs to be applied to each level separately d. B3, C3 & C2 has 2 options to choose from as by 2 different color codes e. Cells A1, C4, D3, & D4are unlikely combinations and are not permissible to be selected The color coding of the Grid below and the energy Curve is same as the overall distribution needs to be obtained for the Grid.

Best In Class

Vital Contributor

Need Revving

Bottom Performers

Unlikely Combination

POTENTIAL

PERFORMANCE

Performance Potential Matrix

5%

5%

70%

20%

Energy Curve

47

TALENT CONCLAVES Business heads and HR heads participate in the Talent Conclaves to review the energy curve, outliers and profile the Best-In-Class raters. Talent conclaves having following objectives a. Sign-off the energy curve b. Review, approval and adoption of Individual CAP for the ‘Best-in-Class’ Employees c. Identifying the Owners/Anchor of individual CAPs d. BHR Head will inform Corporate Talent Management about the outcome of the Talent Conclave discussions e. Initiating promotion discussions for BIC/VC rated employees. The final promotion decisions to be taken during the increment phase. PERFORMANCE IMPROVEMENT PLAN (PIP) Performance Improvement Plan (PIP) is a focused development plan to facilitate improvement in performance of poor performers within the organization. It is initiated for the below two categories of employees: a) Employee who are rated NR (Needs Revving)/ BoP (Bottom Performer) during the Year End Review.

STAR

Emerging STAR– High Performer

Emerging STAR– High Potential

Marginal Performer

Solid Contributor

Future STAR

Super Contributor

Performance Issues –Needs Development

Performance Issues – Challenging Fit

Performance Issues

Borderline Performer

Performance Enhancement

Performance Consolidation

Needs Development

48

b) Employees (rated VC / BCI during the year-end review) who demonstrate poor performance during the year. At the end of the defined performance Improvement Plan review period, if the employee do not improve to a grade better than VC, the employee is asked to resign. INTERNAL JOB POSTING POLICY: The intent of this policy is to facilitate and enable all regular employee of Tata Communications to apply and offer their candidature for all open positions based on their career aspirations, knowledge, skills and abilities they possess vis-à-vis the job requirement. All regular employees who have completed minimum 18 months in the current role will be eligible for IJP. It’s a framework for internal hiring process whereby employees get the flexibility to choose between various job options within TCL rather than pursuing options outside of company. REWARD & RECOGNITION IN TCL: TCL believes that flexibility and responsiveness in everything is critical to its long term success. These awards aim to recognize and reward outstanding individuals and teams who have gone beyond their role requirements and have taken initiatives that have had a positive impact on its short term and long term growth objectives. These awards have been distributed in following ways. REWARD SYSTEM LINKED TO LEADERSHIP SIGNATURES: More than ever before, companies are becoming global. Setting up operations in new geographies, gaining local market share and leveraging the low cost base through offshoring and outsourcing has now become a necessary strategic option for large companies. This is leading to large numbers of managers and leaders working with cross cultural teams, in different countries. From an employee’s point of view, many have co-workers across the globe. This throws up new challenges. The Leadership Signature Programme is the DNA of managers at Tata Communications and has been designed to create a common inspiring culture in the company. The objective is to groom and develop talent into future leaders who not only provide the

49

right environment for the employees, but will also enable them to give their best so that they accomplish tough business goals. They will become good at the ‘how of leadership’. These 6 attributes are linked to reward system which are summarized below:

LS Behaviors Themes

Identified Examples

1. Ability to energize

1. Leading by example

Setting example for others by displaying high energy and enthusiasm.

Demonstration of proactiveness by going beyond the specified work expectations in a particular situation.

Significant overall contribution to the project by being the pivotal force or live wire of the team or exceeding expectations of the managers or customer.

Excellent Effort towards teamwork that has helped to improve team Effectiveness or team synergy

2. Positive influencing

across Bus/regions

Extraordinary cooperation within the team, support extended to other team members who may not be adequately strong as well as cross-functional cooperation.

Excellent effort towards cross functional teamwork that has helped to improve cross functional collaboration and synergy.

Drive for results by successfully working/ collaborating with cross functional teams

2. Assume responsibility

1. Personal accountability

Display strong sense of ownership / passion towards work. Step forward to address difficult issues Any personal sacrifices made at a particularly crucial time

during the project leading to achievement of the work objectives

Takes ownership of the situation and responds quickly and effectively

2. Conflict Management

Maintain positive outlook in difficult situation and proactively resolve conflict

Creativity of any manner on the job, including practical solutions offered on the spot leading to compliments from the customer or solving a work-related problem or conflict.

3. Ability to turn diversity into synergy

1. Global Citizen

Value and seek diverse perspective i.e. sensitivity and openness towards gender, culture, personal values and opinions.

Display a global mindset to address diverse customer requirements

Bring in global perspective in successful implementation of initiatives.

Keeps abreast with knowledge of political developments, market trends, business opportunities, government regulations, products, technology and customers in multiple

50

countries to conduct business successfully in different parts of the world.

2. Collaboration

Leverage strength of other team members to achieve common goal/objectives

Foster information sharing and fluid communication within the team to deliver uniform results (business/functional)

Being proactive in being involved in large cross team / functional projects

4. Translate ideas into

reality

1. Innovation & Creativity

Challenge status quo and come up with new ideas to make things better

Successfully adopting innovative approaches to work within the team resulting in substantial gains to the business/function.

Designing and developing systems or processes that lead to increased effectiveness

Constantly update self and team with the products and technology based information/news leading to improvisation

Regularly contribute on online portals/blogs/newsletters

2. Focus on execution

Think through ideas, build on them, display advocacy and gain buy in

Consistent compliance to SLAs and set guidelines in execution of business activities

Ensuring business continuity and process adherence in critical times

Mindful of positively impacting additional technical expertise that helps in achievement of the overall targets of the group and contributes to organizational capability building.

5. Think and act with focus on

profit

1. Excellence in business results

Any brilliance / presence of mind demonstrated in successfully handling a crisis situation

Contribution to long-term capability development of the organization.

Deliver simple and easy to use solutions resulting immediate acceptance and wide usage

Improvising on existing processes through automation

2. Drive profitability

Initiate activities / suggested practical solutions that resulted in cost reduction or resource management in a specific situation or event

Sustained efforts leading to earning of goodwill from internal or external customers or increased business / opportunities

Superior contribution of team leading to positive feedback from the customers resulting in generation of additional / new business

6. People centricity,

empathy & listening

1. People Development

Empathize and patiently listen to people with open mind Work towards knowledge sharing and training within the

team at all times resulting in an enabling culture and increased efficiency within the team

51

Proactively engage and collaborate with peers to add value and create win-win partnership

Encourage constructive feedback from external & internal sources

Build trust and confidence among other and ensure shared purpose and mutual respect

Passion for people development activities like coaching, training and mentoring

Being genuinely interested in other people and success

2. Customer centricity

Bring customer experience in every decision Take accountability for identifying and addressing customer

issues. Sustained exemplary performance by tem exceeding

expectations, leading to total customer satisfaction and appreciation.

Averted a difficult or embarrassing situation by responding tactfully to a customer or a customer query

Proactively ask and act on customer feedback to constantly create delightful customer experience.

Apply innovation and execution skills to partner with customer for long term relationship

AWARD CATEGORIES There are three award levels in new appreciation framework. Each award level has multiple awards as detailed below: Level 1- Marking a difference i) Thank you appreciation card ii) Hi 5 Level 2- Above and Beyond i) Xtra Mile ii) Blue Ribbon iii) ACE iv) Partner & Progress Level 3- CEO Recognition i) Proclub

52

The detail description of awards are as follows: 1) Thank you appreciation card: It is basically a simple greeting card which is been given by any employee to the performer for his significant performance. 2) Hi 5- As on the spot recognition program to recognize any significant contribution of individuals at any time. Process: • Nominations along with the citation will be made by the Reporting Manager. • All winners would receive gift certificates, given by the Reporting Manager. • All efforts should be made to ensure that the recognition is done publicly. Citations through mail will also be sent by the Reporting Manager to the peers/team members of the winners to ensure transparency of the process. • Rewards will be given at any time.

3) XtraMile: It is an On-the-Spot Recognition program to recognize any significant contribution of individuals in solo or in a team. Process: • Nominations along with the citation will be made by the Manager and would be approved by the ‘one level up’ manager/ reviewing manager. • All winners would receive gift certificates, given by the Reporting Manager. • All efforts should be made to ensure that the recognition is done publicly. Citations through mail will also be sent by the Reporting Manager to the peers/team members of the winners to ensure transparency of the process • There is no fixed number of nominations during the year, but an approximate of 1-2% (per month per division) of the employees can be rewarded, but such budget(s) would be required to be approved in the AOP of the respective function and managed by the Function Head.

4) Blue Ribbon: It is a Quarterly Reward and Recognition program for exceptional contribution by individuals in their respective Function/ LOB/ Shared Services. Number of rewards: Maximum of 1-2 rewards in every LOB/ Shared Services per quarter. Process: Nominations and Selection: • Individual nominations will be made by the Manager. Nominations must be made using the nomination form provided in the annexure. The nomination would have to be approved by the Reviewing Manager.

53

• The form should be duly filled with very specific details of the initiatives and results. All relevant supporting information like Rs / $ savings or profit, customer or team appreciation etc. should be provided to strengthen the case. • To qualify for consideration, the achievement must be in line with the Corporate and LOB/Shared Services goals (e.g. profitability enhancement, process improvement, superior contribution or teamwork). • The selection would be made by the LOB/ Shared Services Head. Timeline • Request for nominations for achievements in the previous quarter, to be sent out in the first week of every quarter. • Completed nominations to be submitted within two weeks of request for nominations. Rewards • Each of the winners would receive gift certificates. • All winners would receive a certification and the winners would be recognized during town halls. • The names of such winners would be announced in the Company Newsletters/ Tata Communications Buzz with a brief write-up on their achievement.

5) A.C.E.- Award for Champion Employees is a quarterly reward and recognition given to an individual for his/her outstanding contribution towards the achievement of the company’s objectives. Number of Rewards: Maximum of 1-2 rewards in every LOB/ Shared Services per quarter. Nominations and Selection: • Individual nominations may be made by a LOB / Shared Services Head. • To qualify for consideration, the achievement must be in line with the Corporate and LOB/Shared Services goals (e.g. profitability enhancement, process improvement, superior contribution or teamwork). • Nominations must be made using the nomination form provided in the annexure. • The form should be duly filled with very specific details of the initiatives and results. All relevant supporting information like Rs / $ savings or profit, customer or team appreciation etc. should be provided to strengthen the case. • The final selections will be made by the nominating LOB/ Shared Services Head in consultation with another LOB/Shared Services Head who has reasonable visibility of either the individual or the delivery of the outcomes of that individual who is being considered for the reward. Timeline

54

• Request for nominations for achievements in the previous quarter to be sent out in the first week of every quarter. • Completed nominations to be submitted within two weeks of request for nominations. Rewards • Each of the winners would receive gift certificates. • All winners would receive a certification and the winners would be recognized during town halls. • The names of such winners would be announced in the Company Newsletters/ Tata Communications Buzz with a brief write-up on their achievement. 6) Partner & Progress: It is a quarterly reward and recognition program, primarily meant for recognizing outstanding team achievements. The teams may be cross functional or cross geography. Process: Number of Rewards: Selections will be made from the teams registered in the quarter. Nominations and Selection: • Functional/cross- functional/ cross- geography teams may be formed. Retrospective team formations cannot automatically be considered as a competing entry. • The team members have to sign a charter clearly identifying members of the team, the objectives, deliverables and timelines of the project. The format is provided in the annexure. • The charter has to be approved by the LOB/ Shared Services Head. The team size would be at the discretion of the LOB/Shared Services Head. In case of cross functional teams, the approval of each LOB/ Shared Services head would be required. • The duly approved charter needs to be submitted to the HR team. • To qualify for consideration, the deliverables of the project would be reviewed by the LOB/ Shared Services Head after the completion of the project, provided they are within the timelines mentioned. Timeline: • Request for nominations of team formations to be sent out a fortnight before the quarter begins. • Charters have to be submitted within two weeks of the announcement i.e. starting of the quarter. • All teams whose charter is approved will be permitted to create a unique team identity for all its members. This can be in the form of either T-shirts, mugs, photo frames, caps

55

etc. For this purpose the Head of the LOB / SS is authorized to permit expenditure in the range of US$ 25 to 35 per team member. • At the end of each quarter, all teams whose projects are due for evaluation will be taken up for review by a Committee of LOB / SS Heads and the final list of winners decided. Rewards: • Each of the team winners would receive gift certificates. • The details of teams along with brief citations will be put up on the Company Intranet every quarter. 7) Proclub- It is the highest/most prestigious award at Tata Communications. It is designed to acknowledge and award exceptional performers and inspire proactive practices. Process: Nominations and Selection: • Nominations can only be made by LOB/ Shared Services Head. • To qualify for consideration, the achievement must be in line with the corporate goals (e.g. profitability enhancement, process improvement, superior contribution or teamwork). • Nominations must be made using the nomination form. The form should be duly filled with very specific details of the initiatives and results. All relevant supporting information like Rs/ $ savings or profit, customer or team appreciation etc. should be provided to strengthen the case. • Final Selections would be made by a team of the top management at Tata Communications Timeline: • Request for nominations for achievements in the year to be sent out in the first fortnight of the next financial year. • Completed nominations to be submitted within two weeks of request for nominations. Awards: • The winners will go on a holiday together as a group for 3-4 exciting days at an exotic location. All travel arrangements and hotel accommodations for Proclub winners will be provided by Tata Communications. • Winners will be awarded at an award ceremony by the executive management. • The names of such winners would be announced in the Company Newsletters/ Tata Communications Buzz with a brief write-up on their achievement.

56

• Budget for this would be required to be approved in the AOP and managed by Human Resources.

57

CONCLUSION:

I am highly privileged that I got an opportunity to work with Tata Communications which

is a leader in Telecommunications industry. Here I got to learn a lot about my project

which is on Reward System Linked to Performance. I am really happy that I got an

opportunity to have a deep knowledge about the subject.

It has been a great learning experience. For my project which I had interacted with

different departments, understand their working, their contribution and TCL as a whole.

Somewhere or the other, it has directly helped a lot in my confidence building because in

the process I got to interact with TCL management from all the departments.

This essay has evaluated the reward systems and highlighted the importance of reward management. As discussed above, payment including reward and other benefits does not mean simply encourage minimal expectation of employees. This can be basic in organization to attract and retain people. Effective reward management can not only be applied to dominate an individual’s behavior but also improve an organization’s productivity. These rewards aim to recognize and reward outstanding individuals and teams who have gone beyond their role requirements and have taken initiatives that have had a positive impact to its short term and long term growth objectives. There is a general direct / positive relationship between total rewards and employee performance which are linked with Leadership Signatures on its 6 attributes. Reward is very critical and central activity in the human resource management function in the organization which can be used in scientific way. Through embracing a total reward approach to management of rewards, organizations are able to address diverse needs of employees in their organizations and the diverse ways in which individuals are motivated to work.

58

Bibliography:

http://www.answers.com/topic/employee-reward-and-recognition-systems

http://www.opm.gov/retirement-services/calculators/fegli-calculator/basic-pay/

http://www.ecommerce-now.com/images/ecommerce-now/HRM%20Strategies.htm

http://www.businessperform.com/articles/performance-management/money_in_reward.html

http://www.mbaskool.com/business-articles/human-resource/5260-performance-management-linking-

reward-to-performance.html

http://www.slideshare.net/search/slideshow?ft=all&lang=%2A%2A&page=1&q=rewards+system+linked

+to+performance&qid=2f88a192-78c1-4801-8552-ed894b8a68e0&searchfrom=header&sort=&ud=any

http://www.humanresources.hrvinet.com/performance-management-handbook

http://www.hr-guide.com/

http://www.tatacommunications.com/

http://www.inc.com/encyclopedia/employee-reward-and-recognition-systems.html

http://www.citehr.com/

http://ceo.usc.edu/working_paper/performance_management_and_rew.html

http://corehr.wordpress.com/performance-management/performance-appraisal-methods/

http://www.citeman.com/

www.project-team-rewards.com

A. M. Sarma- “Performance Management & Rewards System” published by Himalaya Publishing House Pvt. Ltd. Prof. Mr. Pravin Late- “Organization Behavior” published by published by Himalaya Publishing House Pvt. Ltd.

59

Annexure I

Nomination form for Hi - 5 – Monthly –On the Spot Award (Performance period (DD/MM/YYYY to DD/MM/YYYY)

Name of the employee : (As it would appear on the certificate/announcement): Employee Code : Designation : Function : LOB : Location : Please give details of the work / activities performed by the employee that makes him / her eligible for the nomination. Please provide details on the steps taken by the employee that went beyond their job requirements. Is there anything else you’d like to tell us further to support the nomination of this candidate? Nominated by (E2 & above): Endorsed By (Manager – E3 & above): Name : Name: Designation: Designation: Date: Date:

Digital Signature: Digital Signature:

60

Nomination form for X-tra Mile – Monthly –On the Spot Award (Performance period (DD/MM/YYYY to DD/MM/YYYY)

Name of the employee : (As it would appear on the certificate/announcement): Employee Code : Designation : Function : LOB : Location : Please give details of the work / activities performed by the employee that makes him / her eligible for the nomination. Please provide details on the steps taken by the employee that went beyond their job requirements. Is there anything else you’d like to tell us further to support the nomination of this candidate? Nominated by (E2 & above): Endorsed By (Manager – E3 & above): Name : Name: Designation: Designation: Date: Date:

Digital Signature: Digital Signature:

61

Nomination form for Blue Ribbon – Quarterly – Individual Award (Performance period (DD/MM/YYYY to DD/MM/YYYY)

Name of the employee : (As it would appear on the certificate) Employee Code : Designation : Function : Location : LOB : Please give details of the work / activities performed by the employee that makes him / her eligible for the nomination. Please provide details on the steps taken by the employee that went beyond their job requirements. Is there anything else you’d like to tell us further support the nomination of this candidate? Nominated by (E2 & above): Endorsed By (Manager – E3 & above): Name : Name: Designation: Designation: Date: Date: Digital Signatures: Digital Signatures: Date: Date: Functional Head & Chief –Officer VP (HR) / Sr. VP (HR) Digital Signatures/E-mail Approval Digital Signatures/E-mail Approval

62

Nomination form for ACE Award – Quarterly – Individual Award (Performance period (DD/MM/YYYY to DD/MM/YYYY)

Name of the employee : (As it would appear on the certificate/announcement): Employee Code : Designation : Function : LOB : Location : Please give details of the work / activities performed by the employee that makes him / her eligible for the nomination. Please provide details on the steps taken by the employee that went beyond their job requirements. Is there anything else you’d like to tell us further support the nomination of this candidate? Nominated by (E2 & above): Endorsed By (Manager – E3 & above): Name : Name: Designation: Designation: Date: Date: Digital Signature: Digital Signature: Functional Head & Chief –Officer VP (HR) / Sr. VP (HR) Date: Date: Functional Head & Chief –Officer VP (HR) / Sr. VP (HR) Digital Signatures/E-mail Approval Digital Signatures/E-mail Approval

63

Partner & Progress Review Form

Team Project Registered on:

Team Project Review Due on:

REVIEW ON COMPLETION OF PROJECT Key Result Areas (as

defined in pg 1) Weight

(%) Appraiser 1

(1- 5), 1 being lowest

Appraiser 2 (1-5) 1 being lowest

Average Score

Weighted Score (Avg. Score * Weight)/100

A C D E F G=C*F/100

1 2 3 4 5

Total Score 100%

Additional Comments (if any)

Recommendation by LOB/ SS Head Name: Designation Date Sign

Endorsed by Additional LOB/SS Head Name: Designation Date Sign

Summary of decisions taken in Final Review meeting held on Date: Members:

VP(HR) / Sr VP (HR)

64

Charter Form for Partner & Progress

Name of the Employees to be considered for the

Reward

Employee Code

Designation LOB/ Shared Services - At least one member from Cross functional &

Cross Geography

Name of the Team: Name of TEAM LEADER: Function: Location:

Team Objectives :

Team Deliverables

Key Result Areas Timeline /

Target Weightage

1 2 3 4 5

Total Score 100

Signature of the team leader:

Approved By (One or more LOB/ Shared Services Head) Name: Designation Date Signature

Endorsed by: (Another LOB/SS Head) Name: Designation Date Signature