Need of the hour : Re-engineering of Talent Review and Reward Mechanism

We can't be afraid of change. You may feel very secure in the pond that you are in, but if you never venture out of it, you will never know that there is such a thing as an ocean, a sea. Holding onto something that is good for you now, may be the very reason why you don't have something better.” ― C. JoyBell C.

Approach to Talent review has witnessed a dramatic shift. Traditional performance appraisal as practiced in majority of organizations are loosing its steam. Earlier we generally had one right way but now multiple right ways, best approach keep changing with the situation, earlier the focus was on Maximizing production out-put which has shifted to creating competitive advantage through best use of talent. Earlier it was felt that Creativity detracts from results, now it is a established fact that creativity is essential for results. We have shifted from command and control to collaboration and self-motivation. 

Employees no longer drive meaning only from company performance, they drive meaning from various other sources i.e. Mastery, Autonomy, Sense of belonging, Career growth, Higher Purpose i.e. building a better society, community or contributing in building the nation. Hence, it becomes imperative for Managers / Leaders to sharpen their skills to deliver feedback and coaching to their folks.  The critical question in front of Business Leaders is how to unleash potential in their organization.  Below are few tips that could help build an engaging and sticky workforce.

Put people first. It’s really that simple : - Understand what make people tick and make them unique.  Managers must ensure that that they really get to know their people, their strengths, their passions, their hopes and their dreams. Employees should be supported to grow in their areas of strength and make commitment to people as a key decision filter for everything you do in your organization.

Re-look at your current talent review process: -  Writing individual annual objectives at the beginning of each year; Assessing performance through performance appraisals and ratings at the end of each year and creating ties between performance management and your compensation system is not eliciting the requisite results. Chances are these processes or practices actually detract from inspiring performance. There is little value in looking back over the past year and assigning a meaningless label to someone’s previous performance because it may not inspire future performance.  I have not seen Managers even looking back ever at the last year development need and holding a discussion around them. 

Reevaluate your reward mechanism:- Very likely you will need to re-think your compensation system, especially if your system has an annual “incentive” bonus tied to an individual performance rating. Consider eliminating the annual bonus entirely (in my experience, such bonuses become an expectation versus actually inspiring performance) and empower your managers to reward exceptional performance as soon as it happens. Whenever thoughts of de-linking performance management from compensation came to fore, we in HR looks in bewilderment as this is how it has worked since we took our baby steps in HR arena. There is bound to be a resistance. However, what got us up to here will keep us here only. 

Communicate the larger picture :-  Spend time discussing your company’s vision, strategies, goals and values. I mean, a lot of time. Create clarity and alignment about what’s important in your organization so employees know how they fit into, and contribute to the vision. People crave to be part of something bigger and they want to belong. Create a meaning for them. Engaging people in conversation is critical so they can really understand, contribute and commit. Clearly and frequently articulating your vision, strategy, goals, values, etc., helps to establish boundaries and direction so creativity and performance can flourish.

Focus on outcomes by being flexible about how, where and when work gets done. If you focus on the various tasks to get there – like narrow job descriptions and strict requirements related to work hours and work location – you will only constrain individual creativity. These things deliver compliance, not engagement. If you’ve done the work in establishing your vision, strategies, etc., then leave the rest in the hands of your employees. Teams and individuals do amazing things when given the right conditions. I have not come across an employee who comes to office pre-decided that he will deliver his worst on the given day. Everybody wants to deliver their best. It is up to us how do we create fire in their gut and guide and facilitate achievement of the desired objective. 

Invest in developing GREAT people managers and Leaders :-  The quality of your leaders can be linked directly to the quality of your business results. Your best leaders deliver double the results that your mediocre leaders deliver, and ineffective leaders actually cost you money. This is intuitively understood when you consider your people managers who directly influence most of the factors that determine individual engagement. Given the impact your managers and leaders have, ensure exceptional people management practices are a critical priority in your organization. Being (or having the capacity to be) a great people manager should be key criterion in talent decisions. Invest heavily in developing both management and leadership practices and seeks frequent feedback from employees on the impact managers have. Provide coaching and support and be sure to recognize and reward your best leaders and managers.

When HR professionals shift their focus to talent development and bring fresh, creative ideas to leadership, they become trusted advisor to business around human capital, driving value to the bottom line by linking an organization’s talent strategy to its business strategy.


A highly sophisticated review process with extensive tools and metrics done annually by managers with low to no skills can do just the opposite. We can not change what we refuse to confront. It’s time to re-think strategies on how to re-engineer performance evaluation and reward system in the organizations.

1 comment:

  1. informative post! I really like and appreciate your work, thank you for sharing such a useful facts and information about evaluating rewared system strategies, keep updating the blog, hear i prefer some more information about jobs for your career hr jobs in hyderabad .

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