Source | The Economic Times
MUMBAI: Perform and prosper: that’s the message India Inc is sending out to employees this appraisal season with many corporates readying to pay their top performers up to 200 per cent higher increments and bonuses than average performers.
Many leading companies across sectors, including Tata Motors, Future Group, Flipkart, Paytm, Panasonic, Mahindra & Mahindra, Vodafone, Godrej and RPG Group, say sharper differentiation between their best and average lot is the only way to prevent shifting of loyalties at a time when there is a scramble for the right talent.
So, most firms – particularly ecommerce players and startups – are rolling out bigger incentives, roles and bonuses for their top-rated employees.
“In this high growth phase you have to reward your lead people much more significantly since they are the ones driving the growth. It motivates people to go all out,” said Amit Sinha, president – business planning and people at Paytm.
The digital wallet and ecommerce company plans to offer its top performers up to three times higher hikes than average performers besides bonus of up to 200 per cent of their CTC (cost to company). Bonus for average performers would be pegged at about 20 per cent of CTC, Sinha said.
Paytm has set aside a $3-4 million budget for its top performers who are also rewarded with employee stock options and better promotions and opportunities. Top ecommerce player Flipkart, too, will toe the pay-for-performance line.
“By design, our philosophy works in a manner to reward and accentuate high performance as it motivates employees to give in their best at work,” said KV Satheesh, director, rewards, at Flipkart. “The variable bonus that an employee receives can be as high as 2X for a top performer compared to an average performer,” he said.
Brick-and-mortar firms, too, plan to reward their top performers handsomely. “The top performers are just 15-20 per cent but contribute to 80 per cent of the business,” said Gajendra Chandel, chief human resources officer at Tata Motors. “We need to tell them they are valued.”
Until a few years ago, all Tata Motors would fit all its employees in an increment range of 8-12 per cent, but now the automaker has changed its rewards plotting drastically. Non-performers do not get an increment at all, while the average get about 10 per cent raise and the best get 15-20 per cent, officials said. Bonus for the latter, too, is 50-100 per cent more than average performers.