Retaining talent in companies is a major challenge before HR professionals but one must not go overboard with rewards and incentives, they said. "While pay-for-performance has come to stay, the challenge before HR professionals is to clearly identify who are performers. Besides, they have to see if the rewards and incentives should be financial or non-financial, long-term or short-term or whether a good performance during a particular period was the result of favourable circumstances like a policy change," said R Sankar, Executive Director and Head-People & Change Consulting, PwC India.
He was speaking at a national summit on `Recent Trends in Compensation & Rewards` organised by the All India Management Association (AIMA).
Vineet Kaul, Chief People Officer, Hindalco Industries, said a good framework for a pay for performance structure is very important but equally important is to achieve the desired results through it. "Organisations are now looking at pay-for-performance strategically and variable pay by companies has increased in the last few years." Pay-for-performance concept is seen as helping high performers, retaining talent and improving employee morale. It is, however, not a panacea for everything, Kaul cautioned.
Anil Khandelwal, Chairman, Anugyan Pvt Consulting and a former Chairman of Bank of Baroda, said while rewards and money are important, it should not be at the cost of preserving the soul of organisations. "The HR challenge is in paying appropriate money for the right skills and talent." Cautioning against glamourisation of rewards, Khandelwal said incentives should be integrated with non-cash aspect and they should not be at a disproportionate level.
Sankar said that though the economic outlook globally is presently sombre, the challenge before HR professionals continues to remain that of attracting and then rewarding and retaining talent. The concept of total rewards and flexi pay held both challenges and advantages.
On the young generation in their early twenties who are entering the workforce, described by many speakers at the summit as Gen Y, he said that going forward, there would be an increase in number of such people in jobs. "The challenge before HR professionals is to manage their aspirations and work out how compensations can be used to attract and engage them," Sankar said.