H I R I N G & B E Y O N D

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Although salary is still thepreferred outcome of performanceappraisals, industry experts expectthings to change in near future.Thus, many organisations areworking out strategies which goesbeyond just money.

PAGE 4A recently concludedTimesJobs.com survey highlightedthat average appraisals for the2012-13 period has remained in therange of 5-20% and maximum hikehas been offered to mid-management staff.

PAGE 3With the changing businessenvironment, culture and values,meaning and objective ofcompensation and benefitsassociated with performanceappraisals are also changing. Expertsshare their perspective inside.

PAGE 8

2

...some things neverchangeWhile many organisations,today, are focussing onconstructing other non-monetary benefit packagesfor the staff, employees stillvie for pay hikes. Accordingto the TimesJobs.comsurvey nearly, 87% of theemployees expect pay hikesas part of appraisals. Itwould be correct to say thatwe are habituated toincreases during the time ofappraisals in the Indiancontext. It is not necessarythat globally there is asimilar sentiment and infact in the US people areused to increases that areless than 5%! However, fromthe average Indian point ofview appraisals areassociated with heftyincreases in salary andanything less than 10% isnormally associated withfailure, reasons ArunavBanerjee, President and

Chief Researcher, SOILInnovation Board at Schoolof Inspired Leadership.Compensation continuesto be a guiding factor for amajority of organisationrelated decisions includingcareer shifts; though thistrend is changing a little bitnow, he added.

...on a positive noteIndustry experts predict,the performance appraisalfor 2013-14 period to bebetter than this year;however, the increase wouldbe marginal. The futurecompensation trends wouldbe tightly linked togrowth, said SaurovGhosh, Executive VP &Head - HR & Training, BirlaSun Life Insurance Co. Ltd.in the bi-annual RecruiteXreport. Corporates aretaking a far more balancedapproach while finalisationof compensation increases.Considering the existingscenario of high inflation,

GDP predictions and otherexternal aspects the outlookwill remain conservative.Compensation trends willremain moderate. However,we will follow a fairlydifferential/segmentedapproach for key talent andaverage performance, headded.

...the data saysl 46% employees feel thatmost employees look outfor opportunities, postappraisals for better paypackages

l 53% of the employersbelieve that the nextyears appraisals would bebetter than this year

l 50% of the organisationsbased out of metros(Delhi, Mumbai,Bangalore, Chennai,Kolkata) have donebetter in terms of givingout appraisals comparedto other major job hubs

POST APPRAISALCompensation Trends

Organisations have offered moderate appraisals for the 2012-13 period withmost companies offering 5-20% hikes to their employees, revealed theTimesJobs.com survey. The 2012-13 period has seen most organisationstreading a cautious path, where hiring was restricted to niche profiles,

appraisals too have been bestowed on high performers

POST APPRAISALCompensation Trends

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Highlights

Approximately 47% of theparticipating organisations haveoffered appraisals in the range ofupto 10% for the 2012-2013 period, revealeda recently concluded survey byTimesJobs.com. Maximum pay hike wasgiven at mid-management levels, said 50%of the surveyed organisations. Mostorganisations have had a cautiousapproach last year. Since, the business wasnot too aggresive during 2012, theperfomance appraisals have also been a lowkey affair this time. Nearly 60% of theorganisations in the IT/Telecom sectorclaimed to have offered appraisals in the

range of 0-10%. About 90% of therepresentative organisations fromHealthcare sector confirmed giving a 10-20% pay hike as part of this yearsappraisals. Over 60% of the organisationsin BFSI and Construction/Cement/Metal/Steel/Iron sector have given major shareof appraisals to their Junior/entry levelstaff. Over 60% of the surveyed employersagreed to have given their IT andAdministrative staff appraisals in therange of 0-10%. Close to 47% of theorganisations offered 10-20% appraisals totheir HR/PM/IR/Training professionals,pointed out the survey.

Appraising the appraisals

Close to 38% of the surveyedemployers believe that offeringtraining and developmentopportunities is the best way to retaindissatisfied staff, post appraisals. Earliersurveys by TimesJobs.com have alsopointed out that growth and careerprogression is one of the most powerfultools to engage and retain the currentworkforce. Employees, too, agree to the factthat organisations which offer goodgrowth opportunities tend to seecomparatively low attrition rates. Nearly37% of the companies feel that assigningnew projects helps to hold back the

discontented employees. Since newchallenges brings in freshness andprovides incentive to them to perform tothe best of their ability. About 36% of theorganisations in the IT/Telecom sectorbelieve job rotation and assigning newprojects is the best tool to retain staff postappraisal. New projects and job rotationtechniques help break the monotony atwork, thus, enhancing the motivationlevels. For BFSI and Construction/Cement/ Metal/Steel/Iron industry,offering training and developmentopportunities works best for engaging staffpost appraisals, according to the survey.

Dealing with dissatisfaction

0-10% 47%

10-20% 40%

20-30% 8%

More than 30% 5%

What is the average(percentage) appraisal youhave offered this year?

Which mechanism works best in dealing with post appraisal dissatisfaction

Offer training &developmentopportunities

38%

Offer job rotation

25%

Assigning new projects

37%

Salary makes sense

According to a poll conducted by JobBuzz.com (a career research platform of TimesJobs.com) 87% ofemployees expect pay hikes from appraisals. Non-monetary perks/benefits dont matter to them at all. Though,12% of the employees look forward to promotions as part ofappraisals. Training, career progression and growthopportunities are the new-age mantras for retaining andengaging employees in the long-run but when it comes toappraisals the expectations are still traditional. Expertsbelieve that this notion is largely traditional and it is not thesame case in US or in other foreign nations. Money is still themost desired outcome of performance appraisals for majorityof the Indian workforce. However, industry experts feel thatthis will change in future, pertaining to changes inorganisational culture and structure.

Pay raise 87%Promotion 12%Perks/benefits 1%

E M P L O Y E E V I E W P O I N T Powered by: JobBuzz.com

What do employeesgenerally expect fromappraisals?

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Innovations

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One of the largestchallengesorganisations facetoday is finding ways tomotivate employees andkeep them engaged. Quiteoften we see employees exitsoon after the appraisal andbonus cycles are over. Oneway to control this sort ofattrition is to provideemployees withopportunities that aligntheir personal developmentwith the strategic goals ofthe organisation. At AEGONReligare Life Insurance

(ARLI) one such initiative isB.I.G. or Big Insights Group.B.I.G. is a platform thatallows the best and brightest chosen through a stringentscreening process theopportunity to interact withthe top management in thecompany and workcollaboratively using aproblem solving approach tobusiness challenges. Theidea is to generate, polishand execute businessinsights that impactperformance of thecompany. Participation in

B.I.G. in the first year oflaunch covered 8% of thenon-leadership workforce.The selection process andthe timely implementationof the program hasmotivated and charged upeven those employees whohave not participated. Forthe employees there is aprestige as well as payrollimpact. The ROI on theproject is awaited but even ifone good breakthroughcomes out of this exercise itwill be significant.

Reinventing the appraisal systemrewarding the non-monetary wayWhile compensation remains the most desired outcome of appraisals, there areorganisations which are building strong non-monetary strategies to hold back theirvalued staff and give them a sense of achievement.

Yateesh Srivastava

Chief Marketing Officer & Head Talent

AEGON Religare Life Insurance

B.I.G. at AEGON Religare Life Insurance

Over the last twodecades, mostorganisations havemoved away from paysystems that are driven bytenure to those that rewardperformance. Performanceratings in an organisationmay follow a standardcontinuum; employees arecompensated more as theymove up the range. Based onthe spread of appraisalratings, a company mayallocate its pay forperformance budget in twodifferent ways:

l Certain employees mayreceive a performance

bonus if they haveachieved or exceeded theirtargets

l Other employees mayreceive a permanent basesalary increase that mayor may not be coupledwith a promotion

Bonuses recogniseexceptional performancesover less than an annualperiod, while pay increasesreward longer termachievements. An upcomingoption that combines bothmethods involves building acontrol point in the payband. A control point fixesor controls an employees

base salary at a certain level,usually one at par with theaverage market rate. Basedon his accomplishments, theemployee may keepreceiving base pay increasesuntil he reaches his controlpoint; if his performancewarrants a pay increasebeyond that point, he isawarded a one-time bonusinstead of a permanent payhike. Most largeorganisations currently usecontrol points to strike abalance between motivatinghigh performing employeesand controlling their paycosts.

Ashish Arora

Founder & MD

HR Anexi

Building a Contemporary Pay for Performance System

TimesJobs Conversations

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Renuka Krishna, AVP-HR,KPIT Cummins explainedthe role of new agerecruitment tools in anorganisations roadmap, Forthe 0-5 years experiencecandidates, the social space is asourcing tool. However, theniche talent or the 6-10 yearsexperience category is thespecialist talent that all of us inthe same space are fighting for.

These are the passive candidateswho are sitting in onlinedatabases or portals they arethe ones who are not looking fora job but every recruiter wantsthem. Here, social mediabecomes more importantbecause this is where we want toform connections with thesecandidates. This is where we arelooking for solutions.

Abhishek Singh, Head-TalentAcquisition, All Scripts,According to me the socialfootprint of the organisationhas two aspects: sourcing andbranding. From the talentbranding angle there is no doubtthat every organisation has to

be present in the social space.For sourcing, 40% ofrecruitment happens throughsocial media as it is a passivemedium, whereas 60% ofsourcing is still done throughactive recruiting means.

The experts agreed that mostorganisations today areinterested in leveraging socialmedia to reach out to passive,middle order employees; theseare people with domainknowledge and expertise, whichare areas where employers hopeto beat competition in themarket using talent as acompetitive advantage.

The challenge, however is tobuild an eco-system in theorganisation that can leveragesocial media, along with thevery effective means of crowdsourcing talent that mostorganisations use today, saidNitin Chandra Shende, Head-Talent Acquisition, Persistent.

We have an alumnus network,people who have left us for theright reasons are ambassadorsof the organisation. We are

figuring out if we can keep themengaged in a dialogue and usethem for employee referrals. Idont think weve leveraged thestrength of this catchment asmuch as we can, said SajiDaniel, Director-HR, SunGard.

Manohar Kakade, Head-IndiaRecruitments, Geometric Globaladded that their strategy ofallowing employees to postcertain job profiles on theirprofessional networks paid gooddividends as the quality of hireswent up.

While discussing tools forassessment of candidates mostpanellists pointed out thatsolutions that would allow themto access behavioural traits andcompetencies of candidates ontheir online professionalprofiles will be a huge help torecruiters. To this end, jobportals can play a vital role byrunning behavioural and skilltests to capture and endorsecompetences, and the recruiterscould then match candidatetraits with the companys jobdescription.

Discussing the next wave ofemployer and employeebehaviour in the social space,experts agreed that brandingand engaging candidatesthrough talent communities iswhere everyone is heading.

The panellists outlined that arobust talent community meansless time and money spent onpulling in passive candidates. Itmeans better quality of jobapplicants and more interactionwith job candidates (in the formof online contests, webinars andother information exchangetools), plus the opportunity togive them a much better grasp ofwhat the organisation doesevery day.

Understanding the need foralternate platforms to engagecandidates before hiring, andthe growing importance ofemployee endorsement,TimesJobs.com presented itstwo social platforms: TechGigand JobBuzz to the panellists.The aim of these socially-activeplatforms is to empowerbranding led recruitment.

New Age Recruitment Tools: Engaging Candidates is Critical

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Times have changed;employers donthave the legacy thatorganisations likeTata enjoyed.

Capturing themindspace of a prospectivecandidate in the social spacefor a long time is a challenge,Nitin Chandra Shende, Head-Talent Acquisition, Persistent

In our organisation weare assessing how wecan split therecruitment team one part does abehavioural or traits

search more from asocial media analyticsperspective. This team feedsthe information to the farmers,

who assess who fits into the jobprofile, Saji Daniel, Director-HR, SunGard

The rsum canlist the skill setsbut the DNA of acandidate can beassessed by

his/her behaviour onthe social media, by who isrecommending him, what kindof people they are following,what kind of comments theyare making, Renuka Krishna,AVP-HR, KPIT Cummins

A behaviouralassessment toolcan be evolvedthat is built tofilter behaviour

and categorise the

person as an A-class, B-class, C-class personality, which isindicative of their traits, theorganisation can filter volumesfrom here, SubramanyaDesai, Head-TalentAcquisition, Eaton

In my opinion thecareer pages inprofessionalnetworks can beused to showcase

routine and otherinitiatives but what reallymakes a connection with thecandidate is technology blogsor talent communities wherecandidates come to talk , notjust follow the jobs posted,Abhishek Singh, Head-TalentAcquisition, All Scripts

We use the socialspace it toprimarily sourcebeginner talent;niche is done

through traditionalmediums. We also rely heavilyon employee referrals, for usthat is the most credible sourceof talent, Amrita Pandey,Head-HR, Aptify

Assessmentusing these newage recruitmentmethods remains

a huge challenge. Iprefer personal interaction toassess the persons calibre,Manohar Kakade, Head-IndiaRecruitments, GeometricGlobal

E x p e r t S p e a k

To use the new age recruitment tools more effectively for recruitment, branding andassessment, were some of the trends that were discussed at a recent TimesJobs.comBoardroom Dialogue on New Age Solutions in Recruitment held in Pune.

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News Bytes

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PSU, govt jobs preferred by B-school graduates: SurveySense of career stability is winning over faster growth prospects inprivate sector as more and more B-school graduates are preferringjobs in public sector undertakings (PSUs) and central government,says a survey by industry body Assocham. A majority of students(about 88 per cent) are getting into PSUs and central governmentjobs, said a pan-India survey conducted by the Assocham inFebruary and March this year. The survey, PSUs or CentralGovernment job seekers, was conducted in cities like Delhi-NCR,Mumbai, Ahemdabad, Cochin, Bangalore, Hyderabad, Kolkata,Chennai, Indore, Patna, Pune, Chandigarh and Dehradun.n The Economic Times, April 2013

Organised sector jobs increase by 9 lakhNumber of people employed in the organised public and privatesectors increased from about 281 lakh in 2009 to 290 lakh in 2011 evenas more than five lakh posts are lying vacant in central governmentdepartments. As per the Employment Market InformationProgramme of Ministry of Labour and Employment, employmentgrowth in the organised sector including public and private sectorshas increased from 281.72 lakh in 2009 to 289.99 lakh in 2011,registering a compound annual growth rate of 1.46 per cent,Minister of State for Personnel, Public Grievances and Pensions VNarayanasamy told Rajya Sabha in a written reply. n The Economic Times, April 2013

Skills HR need to add value to cross border M&AsWith cross border deals emerging as a significant element of globalmerger and acquisition activity, HR leaders need to be well-versedwith the broad array of regulations, cultures and practices, thatmight impact the overall deal success, a Mercer report says.According to the global staffing consultancy, cross -border M&Aactivity comprises a significant portion of global deal activity and

in such a situation, HR leaders need new skills and information toadd value. When M&A deals cross borders, a foundationalunderstanding of key people issues in a given country is critical toany M&A planning or decision-making process, Mercer PartnerandGlobal M&A Engagement Manager in Mercers M&A consultingbusiness Gareth Williams said.n The Economic Times, April 2013

Compensation during difficult times During an economic slowdown, many companies implement drasticcuts in employee compensation and benefit packages. While forsome organisations it is important to do so, they need to spend timeto retain and engage their workforce inspite of pay cuts. As SahilMalik, MD, Da Milano said, To sustain talent during difficult times,the top management needs to keep communication open andeffective. The employees should know what is going on and how itwould affect them. There should be a consistent approach todecision making. Staff should be confident that decisions are beingmade for the right reasons.n The Times of India, April 2013

Candidate engagement the next wave of social media To use the new age recruitment tools more effectively forrecruitment, branding and assessment, were some of the trends thatwere discussed at a recent TimesJobs.com Boardroom Dialogue onNew Age Solutions in Recruitment held in Pune. The discussionstarted with how the social media space features in organisationsrecruitment agenda and changing talent acquisition strategies,keeping in mind the candidates social footprint. The panel alsotalked about the role of referrals, online assessment tools and nichetalent communities. n The Times of India, April 2013

NEWS BYTES

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Perspective

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Bringing intransparency:Appraisals refer to thereview of work done, butin most organisationsand with most employees,this is synonymous withthe increases andpromotions that usuallyfollow an annualappraisal exercise. Toclaim that an appraisalprocess is successful wemust be able to make thedistinction between thetwo processes in theminds of employees. Thatwill ensure a fair

understanding of howappraisals will impactpay outcomes, but alsohow the appraisals willfeed into career plans,personal developmentand overall satisfaction.

The dynamics ofappraisal system:Employees will stay if thework is good, theenvironment ischallenging and healthy;and the rewards areconsistent and fair. Firmsthat want to build a pay-for-performance culturewill differentiate byperformance level; firmsthat have diverse teamsacross domains orindustries are moredecentralised and givebroad guidelines and letmanagers decideindividual payouts.Compensation strategycannot change seasonallyand needs to supportbusiness drivers andstructures.

The future: In the yearsahead, as organisationsbecome more agile andflexible, compensationand reward structureswill follow suit. We willsee structures where anumber of componentscould be short-term andrevisited a few times ayear. E.g. an employeeworking on a criticalproject receives anallowance that lasts aslong as that project doesand there is no stigmawith its discontinuance atthe end of the project.The sense of entitlementthat employees have nowwill diminish. Also, moreorganisations will moveto communicating a TotalCompensation or TotalRewards picture toemployees to maximisethe value frominvestment and also toensure employeesunderstand the full extentof the investment theorganization is making.

Disclaimer: Information provided in this newsletter shall not be reproduced, published, re-sold or otherwise distributed inany medium without the prior written permission of TimesJobs.com and a clear acknowledgement to TimesJobs.com.Contact: TJinsite, TimesJobs.com, Plot No 6, Sector 16A, Film City, Noida. Write in to editorial.timesjobs@gmail.com

Copyright 2012 Times Business Solutions Limited. All rights reserved.

The changing dynamics of compensation and appraisals

Working out appraisals:We are looking at anaverage increase of 10% insalary and we have addedsomething new called afixed variable which ispart of the performanceincentives for alldepartments in ourcompany.

Employee expectations:Employees generallyexpect increase in salary/position and responsibilityfrom appraisals. However,in the days to come,employees will expect partof the profit share, somewould look at value add totheir roles, some wouldwant companies investingin their futuredevelopment, likenomination for executivelearning programs, PG

courses etc. I also seevariable very highperformance based paystructure being agreed andexpected too.

Performance matters:Organisationscompensation strategyshould align to the growth

strategy of the company.Be open as to where arewe, how are we, so that itis owned by both.Performance should be thekey driver ofcompensation andluxuries of life shouldcome through rewards forall. Salaries should be niceto keep the engine runningeasily but should not bemake the employees socomfortable that theybecome lazy and looseambitions and growthparadigms. A range of 5 to15% is a good range todaybut with performanceregards for all. Salariesshould build aperformance culturerather than a complacencyculture.

Lavleen RahejaCEO & Managing Director,FranklinCovey India & South Asia

Shubha KasiHR Director, SunGard

The factors: Appraisals are moreabout what the individual hasachieved and what he/she can hope toachieve in the organisation.Salary/benefits are more like hygienefactors as compared to growth andrecognition for work accomplished. Sowhile it is important to meet the basichygiene needs and keep pace withsome of the changing benefits, it ismore important to ensure thatinteractions are more about what theycan achieve in the course of one'sgrowth in the company.

The philosophy: Salary is a weakretention strategy because it can beadopted by any other organisation.While communicating aboutcompensation clarify what thecompany stands for, where it is headedand what it holds for people in theorganisation. A company with strongfundamentals - financial as well asoperational, is where employeestypically like to be. From anindividual's standpoint, increment isan affirmation of the companysintent to invest in him for helping theorganisation grow. Training for biggerroles and higher responsibilitiesbecomes another motivator foremployees to stay on and learn.

The strategy: A compensationstrategy is a carefully thought-outprocess which has a strong linkage tothe larger compensation philosophy ofthe organisation. Besidesperformance metrics, thecompensation strategy should alsoreflect the demand-supply dynamics ofthe talent pool available. A strongvariable pay program is an importantelement in this space. One has to lookat bringing in the right balance offixed and variable pay and link thisvariable pay to strategic goals of theorganisation. Given that, anyorganisation will have a mix of homegrown and lateral hires and it isimportant to strike a balance betweenthe two. While planning forcompensation change, it is useful tokeep these elements in perspectiveand it will evolve in time to reflect theexternal changes.

George ThomasGroup Head HR, Narayana Health