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Motivation of Employees

through Rewards; Success &


Failure cases"
MCCIA Competition

Acknowledgement
Firstly we would like thank the Mahratta Chamber of Commerce, Industries and
Agriculture (MCCIA) for providing us the opportunity to work on this project. The project was
a great learning experience.
This project consumed huge amount of work, research and dedication. Still, research would not
have been possible if we did not have the support of many individuals and organizations.
Therefore we would like to take this opportunity to express our gratitude to everyone who
supported us throughout the course of this project. We are thankful for their aspiring guidance
and friendly advice during the project work. We are sincerely grateful to them for sharing their
truthful and illuminating views on a number of issues related to the project.
We would also like to express our warm thanks to our project guide, Mr. Philip Coelho for his
support and guidance.

CONTENTS

I)
a.

Executive Summary

b.

Introduction

c.

Name of the team leader ( faculty member)

d.

Names of the students in the team

e.

Contact details of c & d

II)
a.

Objective of the project

b.

Literature review

c.

Research Methodology

d.

Data analysis and recommendations

e.

Conclusion

f.

References

I)

A) Executive summary

Topic: Motivation of Employees through Rewards; Success & Failure cases"


As competition for critical talent increase, organizations look to diversify their employee
engagement and retention strategies. Many organizations realize that an effective Reward and
Recognition framework (R&R) is an important tool to drive desired behavior.
Organizations turn to recognition today because it can have a positive impact on employee
performance and engagement. For example, recent Bersin & Associates research on high-impact
performance management found that, in companies in which recognition occurs, the
organizations average score for employee results (an index comprised of employee engagement,
performance and productivity) was approximately 14 percent higher than in organizations in
which recognition does not occur
Across the past few years, five market factors resulted in organizations to focus more on
recognition, including: 1. A volatile economy; 2. The need for greater agility; 3. The flattening of
organizational structures; 4. Technology; and, 5. The rise of the millennial generation in the
workforce.
The project thus tries to find out what does actually motivate the gen Y. What are the key drivers
of employee recognition that impact business outcome? An attempt has been made to understand
it from employer as well as an employee perspective.

I) B) Introduction to the study


To increase the productivity levels many companies try to figure out if it is possible to mitigate
the effects on employee engagement of less compensation increases, longer working hours and
reduced promotion opportunities. An increasing number of companies have tried to use
employee rewards and recognition policy as an important tool to increase engagement and
satisfaction level of employees. Based on research conducted by CEB and World at work
survey some of the top findings are 71% of highly engaged employees work in organizations in which their peers are
recognized frequently
When senior leaders provided and recognized achievements of goals, the organizations
was nine times more likely to have strong business results
Organizations highly effective at integrating technology into recognition were three times
more likely to report better business results
3

Technology should be integrated into a holistic recognition approach


Organizations at the highest level of recognition maturity are nearly 12 times more likely
to have stronger productivity levels.
Over the years, the volatile economy forced organizations to integrate rewards and
recognition policy so as to motivate as well as retain the employees. Thus, companies try to
come up with innovative, low cost yet effective recognition practices.
1.2 Industry Analysis
India is the world's largest sourcing destination, accounting for approximately 52 per cent of
the US$ 124-130 billion market. The country's cost competitiveness in providing IT services,
which is approximately 3-4 times cheaper than the US continues to be its unique selling
proposition (USP) in the global sourcing market. The sector ranks fourth in Indias total
foreign direct investment (FDI) share and accounts for approximately 37 per cent of total
private equity (PE) and venture investments in the country.
IT sector provides maximum employment opportunities in our country. There is tremendous
competition in this industry and companies are companies are coming up with new and
innovative methods to motivate, engage and retain their workforce. IT/ITES companies were
selected in the Pune region to understand their ongoing trends in rewards and recognition
practices and what are the expectations of the employees.
Given below are the names that were contacted to understand their practices and the industry
view on rewards and recognition.

Convergys

Accenture

Serco

IBM

Cognizant

Mind Tree Solutions

TCS

Wipro
4

GE global servicing

Fidelity

First Source

Jardine Llyod Thompson Group

Homeward

Infosys

Capgemini

WNS

I ) C) Name of the team leader (faculty member)


Dr Philip Coelho , Adjunct Faculty, SCMHRD
I ) D) Names of the students in the team

Sl No
1
2
3
4
5
6

Student

Roll No

Ankit Gupta
Anuj Mudwel
Priyanka Marmath
Swapnil Karia
Medha Gupta
Sree Sai

2014B24
2014B26
2014B60
2014C16
2014C25
2014D28

I) E) Contact details
Sl
No
1
2
3
4
5
6
7

Name

Dr Philip Coelho
Ankit Gupta
Anuj Mudwel
Priyanka
Marmath
Swapnil Karia
Medha Gupta
Sree Sai

Phone No

Mail ID

Faculty
Student
Student
Student

philip_coelho@scmhrd.edu
9873069950 ankit_gupta@scmhrd.edu
9920584756 anuj_mudwel@scmhrd.edu
9158817665 priyanka_marmath@scmhrd.edu

Student
Student
Student

9904049999 swapnil_karia@scmhrd.edu
7038097404 medha_gupta@scmhrd.edu
7709564811 sree_sai@scmhrd.edu

II) A) Research objective


The objectives of the project are

To understand what the companies are doing in the present IT/ITES companies
What are the different rewards that are given
What are the existing criteria
Monetary or non-monetary rewards- what companies are doing and what does
actually employee want
How awards are communicated
What are the major impact parameters of such rewards
Do rewards and recognition actually motivate employees? Can the impact be seen on the
top as well as the bottom line of the company
What can companies do to motivate employees?
What different low cost recognition or innovative methods can be used
Why and how companies integrating online point based system for rewarding employees.

B). Literature Review


What Is Reward and Recognition and Why Does It Matter Today?
Over the past year few years, the volatile economy forced many organizations to do more with
less. As a result, businesses sought new ways to innovate and grow without increasing costs. To
better motivate and retain employees during these trying times, many organizations focused on
increasing employee recognition. But what does this really mean? Our research found that
recognition means different things to different people.
Recognition is defined as the expressed appreciation by one person to another for that persons
behaviors, activities or impact. Recognition may or may not be accompanied by a physical or
financial reward. Recognition programs generally are designed to touch a large number of
employees across the enterprise (e.g., more than just top performers). In many ways, recognition
is part of the total rewards an employee receives in that they can provide additional financial
recompense for performance. Importantly, recognition should align with an organizations
comprehensive talent management approach, and reinforce critical employee behaviors and
expectations.

Fig Total Reward framework

Employee Motivation through rewards


There are two main types of motivation intrinsic and extrinsic. Intrinsic motivation occurs
when people are internally motivated to do something because it either brings them pleasure,
they think it is important or they feel that what they are learning is significant. Essentially, the
motivation comes from inside an individual, rather than from any external or outside influence
(e.g., rewards). On the other hand, extrinsic motivation comes from outside the individual.
This motivation needs to be tapped differently.
In the context of the workplace, people who are intrinsically motivated in their work will put
forth strong effort in a project simply because it is enjoyable and not because there is a reward.
However, having intrinsic motivation does not mean employees will not also seek extrinsic
rewards available to them. Organizations should understand both intrinsic and extrinsic
motivation, and deploy strategies to drive extrinsic motivation in appropriate situations.

Fig- Maslows hierarchy of needs

II) C) Research Methodology


The methodology that was adopted for our research was in the form of a questionnaire. A
questionnaire was designed and sent to employees across various IT companies in order to
understand the criteria on which the rewards & recognition is based on, in their respective
companies. Basically this questionnaire aimed at analyzing and assessing the organizations
current and potential employee reward and recognition program as a tool for motivating its
employees.
Questionnaire was chosen among various other research tools as enormous amount of
information can be collected from a large number of people in a short period of time. They are
reliable and validity is high since the employee himself fills it. The results of the questionnaires
can usually be quickly and easily quantified. The data collected through questionnaire can be
analysed more 'scientifically' and objectively. Also when data has been quantified, it can be used
to compare and contrast other research and may be used to measure change
The questionnaire stressed on various aspects such as

An overall understanding about the organization and about the employees role in the
organizations functions.
An understanding about the employees opinion relating to how they expect the
organization to recognize and reward them for their efforts.
An understanding about the organizations current Reward and Recognition System and
to what extent it meets the employees expectations.

The details that were captured in the questionnaire are as follows.

Average working age within the company


Managerial level that the employee belongs to
In the employees opinion do these factors really matter - Independence and freedom in
deciding the working hours, Provision for up gradation of skills, Being recognized by
management for their efforts and many more
Mode of communicating the reward
Frequency of recognition that they expect etc

After the collection & compilation of data from various organizations, the Chi square test was
sorted to for analyzing the data.

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Chi-square is a statistical test commonly used to compare observed data with data we would
expect to obtain according to a specific hypothesis. The Chi-square test is intended to test how
likely it is that an observed distribution is due to chance. It is also called a "goodness of
fit" statistic, because it measures how well the observed distribution of data fits with the
distribution that is expected if the variables are independent. The Chi Square statistic compares
the tallies or counts of categorical responses between two or more independent groups. It is
designed to analyze categorical data. That means that the data has been counted and divided into
categories. It will not work with parametric or continuous data.
Another way to describe the Chi-square test is that it tests the null hypothesis that the variables
are independent. The test compares the observed data to a model that distributes the data
according to the expectation that the variables are independent. Wherever the observed data
doesn't fit the model, the likelihood that the variables are dependent becomes stronger, thus
proving the null hypothesis incorrect.
Other method adopted was conducting interviews. HR managers as well as heads of different
departments were interviewed to understand the ongoing trends and what are the major
challenges they face in this process.

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D. Data Analysis
4.1 Employee survey data
The survey questionnaire was filled by employees from different IT/ITES companies like
Accenture, TCS, Infosys, Capgemini, Wipro, Reliance, IBM, Cognizant, Newgen software
technologies , Ericsson, Adobe etc.
Analysis were done on the data collected
Reliability test
Case Processing Summary
N
Valid
a

Cases

Excluded
Total

%
71

100.0

.0

71

100.0

a. Listwise deletion based on all variables in the


procedure.
Reliability Statistics
Cronbach's Alpha
.898

N of Items
9

A high value of cronbach alpha denotes high scale reliability. In this case as the value is 0.898
(high), so the data collected is highly reliable.
On asking what kind of recognition they would prefer we got the following response.

Mean denote the mean rankings given by the respondents to each kind of recognition.
Lower the ranking mean , higher is the preference for the corresponding kind of recognition.
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The above table suggests that with means of 3.211 and 3.394 , the most preferred kinds of
recognitions are Senior Management visibility and Certificate of Appreciation respectively.
It can also be concluded that with the highest ranking mean of 4.211 , Experience gift vouchers
are the least preferred mode of recognition.
Question were asked to understand the motivational factors for the employees

Extremely Important

Somewhat
Important

Not at all
Important

74.60%
69%

22.50%
27%

2.80%
4.20%

100%
100%

67.60%
67.60%
64.80%

31.00%
32.40%
29.60%

1%
0%
5.60%

100%
100%
100%

More challenging work tasks

60.60%
56.30%

32.40%
40.80%

7%
2.80%

100%
100%

Receiving formal recognition for your


efforts in making difference

52.10%

45.10%

2.80%

100%

Being recognized by peers and coworkers for your efforts

50.70%

39.40%

9.90%

100%

Motivational Factors at Job


Opportunities for career growth and
career development
Possibility to achieve promotion
Being recognized by management for
your efforts
Provision for up gradation of skills
Bonus and financial incentives
Independence and freedom in
deciding the work hours

Opportunities for career growth and career development is the most important motivating factor for
employees

Also maximum people preferred town hall meetings and wanted to be recognized by both
supervisors as well as managers
When asked about ideal frequency major percentage was inclined towards quarterly recognition
methods.

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4.2 Analysis of on- going trends


1. Standardization of rewards and recognition
Observation
Majority of organizations contacted by us have organization-wide R&R system
At a global level, majority of organizations have hybrid R&R, where some rewards are consistent
across organization, while others vary by department

Organizations having Company- or Department-wide R&R Framework


57.7%

51.0%
39.0%
23.1%

19.2%
10.0%

Company-wide

Department-wide

Our Benchmarking Exercise

Company- and Departmentwide


WorldatWork Survey
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2. Criteria on which rewards are being given

100.0%
63.0%

Individual
Performance

92.0%
70.0%

Length of
Service

62.0%59.0%

Team
Performance

58.0%63.0%

Innovation

48.0%
35.0%

Company
Values

56.0%
23.0%

Customer
Satisfaction

52.0%
12.0%
CSR

Our Benchmarking Exercise


CEB Survey
Prevalence of Recognizing Various Activities and Behaviors

Observation
Awarding performance and innovation is most prevalent in the industry under consideration
Rewarding on the criteria of company values and/or CSR is less prevalent as these do not have a direct and
visible impact on the companys performance

Prevalence of Spot Awards

Observation
Introduce spot awards to incentivize employees proactively and reward them in a timely manner
Managers would be able to use Spot Awards as a tool to drive desired employee behavior

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Organizations Having Spot Awards in their R&R Framework


85.0%
69.0%

Our Benchmarking Exercise


N = 26

66.0%

CEB Survey

WorldatWork Survey

N = 27

N = 374

Prevalence of Peer Recognition

Observation
Introduce peer recognition to increase employee engagement in rewards and recognition
Peer recognition will help recognize small positive critical incidents that get missed by
managers

Organizations Having Peer Awards in their R&R Framework


69.0%

56.0%

Our Benchmarking Exercise

CEB Survey

N = 26

N = 27

42.0%

WorldatWork Survey

N = 374

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5. Prevalence of redeemable Points-based System to administer R&R


Observation
Implement redeemable points-based system to administer rewards and recognition program
It will enable employees to choose their own rewards, hence making the R&R more
meaningful
Organizations Using Redeemable Points-based System in their R&R
38.0%

Framework

11.0%

Our Benchmarking
Exercise

CEB Survey

N = 26

14.0%

WorldatWork Survey

N = 27

N = 348

4.3 Integration of online point based system


Many companies are adopting the trend of point based reward system. Companies like TCS have
developed a very robust system.

Reward points
deducted from
employees
account

Employees redeem the


reward points against
products/coupons/vouche
rs

Employee
s

Accumulate
reward points

Win any of the


rewards mentioned
in the R&R
framework

Employees are allocated


reward points associated
with the reward they have
won

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Advantages of redeemable based point system are

Employees prefer monetary awards to recognition; further, rewards of lower value do not
motivate significantly. Redeemable points-based R&R system lets employees
accumulate points from a number of rewards and then redeem those for a high-value
product; this helps is making even the smallest of rewards more motivating

The redeemable points-based system will also be extremely easy to administer

The employees can choose rewards according to their own preferences; this helps in
making the rewards more meaningful

It will also help drive consistency in performance as employees will look to accumulate
more points to be able to redeem higher value rewards

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E. Conclusion
5.1 Guide to recognizing Employees work
Managers are the ones who have to supervise as well as direct other people. They are in the
unique position to make others aware of the great things your employees have accomplished.
After interviewing various managers it was found out that recognizing employees is not an easy
task. Many managers find it tough to understand what the employees want. Managers have clear
and immediate visibility into their employees contribution and successes. Recognizing
employees work is easier than done. It is often difficult to pick up the right words at the right
time to express the gratitude. It should always be done in the effective way to motivate them so
as to get best out of them.
The research by a leading organization states that if the managers are effective at recognizing
employees, they can boost their performance by 20%.
The three major guidelines every manager should keep in mind is
Recognize right actions and behaviors
Link recognition to specific actions or behaviors
Brainstorm ways to recognize employees work

5.2 Low Cost Recognition Methods followed by company


This is the era of innovation and companies are coming up with various low cost recognition
ideas. Different ideas can be
Token of appreciation Acknowledging employees actions and behaviors through
meaningful words of appreciation can boost employees emotional quotient leads to
improved efforts
Public acknowledgement Providing employees in the public forums actually help them
to increase their efforts and performance
Development Opportunities - Providing employees with job related opportunities such as
completing a special assignment helps to impact their commitment levels and intent to
stay.
Awards and perks Giving employees low cost awards and perks make them feel valued.
Perks such as baby sitting etc. also alleviate personal concerns and ensures that
employees remain focused on their jobs
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5.3 Concluding Note


Employee reward and recognition is an important tool for two major reasons
It helps to improve employee engagement, which leads to higher productivity and
retention rates
It helps the organizations to reinforce right kinf of behavior, goal and culture
The reward and recognition strategy should be (S)SMART. i.e.
S- Supportive of Goals and values
S- Sincere
M- Meaningful
A- Adaptable
R- Relevant
T- Timely
This (S)SMART checklist makes sure that R&R program of the company drive the correct
behvaiour and no effort of employee is left unrecognized thereby contributuing to its increase in
productivity.

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F. References

Unleashing Excellence: The Complete Guide to Ultimate Customer Service, Second


Edition, Dennis Snow and Teri Yanovitch

Employers Award a Wider Variety of Incentive Pay, SHRM (March 2014)

Employee Recognition Survey Spring 2013 Report, SHRM/Globoforce (2013)

Trends in Employee Recognition, WorldatWork Underwritten by ITA Group (June


2013)

Benchmarking Rewards and Recognition Programs, CEB Corporate Leadership


Council (2012)

Bersin & Associates Employee Recognition Maturity Model, Bersin& Associates


Deloitte (September 2012)

Making recognition and rewards matter Five Practices to Drive Better Business
Results, Bersin & Associates Deloitte (September 2012)

The Employee Performance Paradox: Balancing Execution with Impact, CEB


Corporate Leadership Council (2015)

Peer Pulse: Integration of Reward and Recognition Programs, CEB Corporate


Leadership Council (2013)

Low- and No-cost Recognition Tactics, CEB Corporate Leadership Council (2013)

Guide to Recognizing Employees Work, CEB Corporate Leadership Council (2010)

Recognizing and Rewarding Employees, CEB Corporate Leadership Council (2010)

How to Recognize and Reward Employees Second Edition, Donna Deprose,


AMACOM - American Management Association

The Changing Face of Reward, Hay Group (2013)

Rewards and Recognition: 2014 Trends Report, Accelir (2013)

Articles from Harvard Business Review

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