A couple of years ago, we heard the voices on the floor about delays in incentive payout. Naturally, it was an area of concern for our team members. We were clear that rewards and recognition have to be timely. We couldn’t let this simmer; we deep-dived and understood the root cause. The process needed the managers to gather the performance data of their team members, validate with the financial data and approve the payout. This quarterly exercise called for investment of time which is always in short supply.
An idea struck us! Our folks never had a problem in getting their expenses reimbursed on time. We replicated the same process for incentives. The accountability of payout remained with the manager, but we shifted the accountability of calculating and validating them to the hands of team members. We asked them to record their own performance data, validate with the financial data, sit down with their manager to discuss those and get it approved for payout.
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Empower them
We changed the process, explained the rationale behind the change to all in the company and launched the new initiative. Also we added a few features in our performance management system to nudge the employees to claim their incentives at right time.
We freed up valuable hours of the manager in gathering the data, validating them and approving them as a bunch. We asked them to review the data and the calculations as and when the member submitted. They had to hold a performance conversation with the team member based on the results.
Not only we removed the concern of delay in payout but we introduced a powerful structured intervention by the team manager to recognise the contribution of the team member and coach for further improvement. It has been wonderful to watch the impact of this empowerment!
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Systems have to support
For this process to work well, we knew, goals have to be set clearly and at the right time. We made some changes in our performance management system. Organizations have a quarterly or half-yearly system. But, we made it weekly!
The idea was to make sure that each role has a predefined set of KPIs and targets were to be set against each KPI on time. As we work in a volatile market, we fortified the system to capture the plan or forecast for the next week, month, quarter and so on. Each week, all our performance data could be captured real time; dashboards showed us the trends, the comparison against targets and the rank in the peer group. Each member right from the junior-most person to the CEO received system-generated report to show how we have done and what’s in store for the future. It helps us look into the mirror, think about course-corrections and discuss with our supervisor if we are on the right track.
The system played an important role in driving this accountability in each member.
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Practice what you preach
Some organizations employ analysts to crunch performance data, publish leader boards, calculate incentives and resolve queries of employees around the calculations. This brings efficiency to the process but its fallout is not particularly good for the internal environment of the organization. The manager has to simply approve the calculations; more often than not, they look at it as a task to be performed, they clear their desk by approving it quickly and keep it aside for a review in future. Normally, they don’t get to review it at a later date and thus miss the opportunity of talking to the team members about the rewards earned and the potential of doing better. Thus, the rewards process gets done quickly but dehumanised and hence, loses the impact of engaging the employees better.
Managers right from CXOs to the frontline supervisors have to perform the same set of tasks each week. They have to trust the capabilities of their team members, help them by showing the way, build robust systems and processes to facilitate performance management, empower the team members to track their own performance and guide them in the right path. Then, employees own up their performance fully and we have an environment of mutual trust, support and care.
Further reading:
https://www.darwinbox.com/blog/empower-employees-ownership-performance/
