FINE LINE Organisations have to deftly balance strategies to retain top performers and give poor performers a chance to improve. They peg high performers at a higher percentile, mentor employees and give those at the lowest end a gentle nudge
Organisations are discovering a twin talent challenge in a competitive business environment. While they need to retain top talent, they also need to let go of consistently poor performers. In doing so, they often walk a thin line -are they letting go of the right set of people?
HCL Technologies uses starkly differentiated compensation strategies to separate good talent from the rest.
Top performers get more than 100% performance bonuses provided company targets are met. Low performers get a “claw-back“ incentive -payouts for increasing performance ratings year on year. In spite of all these efforts, if employees still continue to lag behind, they are encouraged to look for opportunities outside the organisation, says R Anand, VP, rewards and career and talent management at HCL Technologies.
Most organisations use a mix of these techniques, besides their own strategies. Pegging high performers at a higher percentile than others, enabling employees to work on live business problems, mentoring and timebound performance improvement programmes are some of the techniques they use.
“Top performers expect the organisation to recognise the value they create with more than just a pat on the back,“ says R Anand, VP, rewards and career and talent management at HCL Technologies. The top 30% are the most productive and expect differentiated rewards, career growth and other benefits, he adds.“These programmes and focus have helped HCL retain their top 30% performers at more than 90% retention levels,“ adds Anand.
The bottom 30% attrition, however, is over 15%. Employees rated in this category are given deferred nominal increases and also less than 100% bonus payouts.
At Tech Mahindra, the top 20% of associates are pegged at a much higher percentile as compared to the others. Consistent top perform ers, called ACErs, go through various interventions including an annual global felicitation ceremony by CXOs along with their families, invitation to thought leadership forums, involvement in special initiatives as well as accelerated career growth opportunities, says Sucharita Palepu, global head people policies and practices.
At MTS India, the differentiation begins with segmentation, wherein key talent across levels is identified. Talent is segmented into key successors, high potentials and subject matter experts (high performers). A mix of strategies which cater to monetary, development and growth needs for an employee is applied.
“Employee churn is a major cause of concern for most telecom players. Talent retention is not easy, especially when 90% of your talent is Gen X and Gen Y,“ says Tarun Katyal, chief HR officer at MTS India.
Non-performers are given opportunities to improve through mentoring and in case they still don’t perform, the company follows a `con sequence management’ policy to promote meritocracy. One of the levers MTS uses is a formalised HIPO (High Potential Employees) attrition rate for all circle heads and human resource employees. “Since this gets reviewed quarterly, it has been very effective to identify problem areas and take remedial action when required,“ says Katyal.
At Whirlpool, high performers are put on action learning projects where participants work on live business problems using techniques they have learnt. This is in addition to bagging critical roles, coaching and mentoring. “It has a long-term impact on the employee’s capability ,“ says Whirlpool India, VP -human resources, Sarthak Raychaudhuri.
More often than not, retaining high performers is a bigger challenge than identifying non performers, says Chandrasekhar Sripada, president and global head of HR at Dr Reddy’s.
“Contrary to popular belief, it is neither compensation nor status needs alone that help retain best talent. The key is to have a deep sense of personalised engagement with top talent -with an empathetic understanding of their lifecycle needs,“ she adds.
While companies have little tolerance for non performance, they give ample opportunities to non performers to improve before showing them the door.
When an employee falls below the performance curve at Abbott, they are put on a 90-day improvement programme that identifies, engages and re-energises talent that needs a bit of a brush-up.
This plan includes feedback, coaching and intense performance monitoring. Nearly 60% of employees who need to be brought up to speed jump back on the performance track, says Ajay Bhatt, regional HR director at Abbott India. “We believe everyone, no matter which bracket of performance they belong to, should be given a fair opportunity to improve,“ he adds.
At HCL, “structured reflection“ -hard hitting but balanced feedback against the required competencies is given to help non-performers focus on specific areas of work, explains Anand of HCL.
By ensuring that the talent that is unable to align with its business processes leaves, companies are working at creating an environment that will help them to transform before taking them off the system.
“It is like creating our tomorrow. Our talent mindset is not only about changing behaviour, it is about rewriting the future altogether through talent management,“ explains Whirlpool’s Raychaudhuri.
“So we could rewrite the future across the critical mass, transform a tired workforce into innovators and a burnt-out culture into one of inspiration, a command-and-control structure into a system in which everyone pulls each other for success,“ he says.
Source: The Economic Times
Date: 26th December 2014