Worklife of Bpo Employees Free Essay Example

Striking a balance is the real fulfillment to life. In the rat race of our present day existence, especially in the long working hours ethos of our industry, we forget to maintain a balance between work and family. The result is devastating: high levels of stress, trauma, and even nervous breakdowns. The phrase worklife balance was coined in 1986 in USA .Until 1999 it remained on the fringes of corporate usage and public dissemination. Post 2000, work life balance has gone mainstream, with hundreds of dedicated internet sites, including those of mega corporations, helping spread its usage.

There has been legislation enacted in many countries making worklife balance crucial to the functioning of a corporation. All this translates in the HR departments paying more and more attention to the aspirations of every employee and creating parameters of social interactivity to enable them to constantly discover their true potential. The BPO industry and other IT based businesses are constantly reframing their worklife policies because of high attrition rates.

Objective of the Paper

To study the worklife of the BPO employees and the various problems faced by them while working in the BPO sector.

1. The paper also gives an insight on the various human resource practices carried out in the BPO sector. 2. This paper would give a detailed report on the employees and their benefits and disadvantages in relation to their worklife 3. The paper would throw light on the human resource functions, practices followed by the HR department in relation to a BPO unit-Convergys Some Statistics of the BPO Industry

• Over 25,000 people are employed in the BPO sector
• Revenue of the sector touches $ 3.

6 billion
• Burn out Stress Syndrome is common among BPO employees
• BPO industry lacks a regulatory framework from Foreign Direct Investment The Government and the corporate sector should look at employment laws as different from the labor laws for the business process outsourcing (BPO) industry. There is a need for a forum to redress the grievances of employees in the BPO sector. At a public meeting organized by the Union of Information Technology and Enabled Services ,participants rued that the BPO industry lacks a regulatory framework from Foreign Direct Investment (FDI) regulations to issues of security, technology transfer and employee welfare. Various call centre employees and non-governmental organization activists expressed concern about the non-implementation of the universal charters prepared pertaining to the security of women working in night shifts.

The absence of such a regulation leaves employees open to machinations of unscrupulous employers, cases of fraudulent salary cuts, collection of deposits in the name of training, arbitrary fixing of salaries and fear of reprisal. The number of people employed in the BPO sector is currently upwards 2,50,000 in the country and expected to reach 1.1 million by 2008.( according to a NASSCOM Report)The business has grown by 46 per cent, with the revenue touching $ 3.6 billion and has added 70,000 new jobs in the year 2004. The NGO workers are apprehensive about the sustainability of the employees in the BPO industry because of the haphazard work shifts. “Though BPO industries have been a boon in terms of employing a bulk number of unemployed graduates, it is difficult for them to sustain.

The stress, working against nature and the safety and security factor plays a major role. Though a job in the call centers is all about “big money,” the future of the employees and their educational opportunities five years down the line is a million dollar question. The employees cease to be social beings and often get isolated from their family and friends. BOSS — the Burn-Out Stress Syndrome — is a common syndrome among the BPO employees and includes chronic fatigue, insomnia due to the complete alteration of 24-hour biological rhythm of the body. Crossing lines of gender, religion and caste, anyone can fit into this type of work, assuming they have good language skills. Lamenting on the stress factor, many call centre employees called for longer breaks during work hours and an insight on loss of identity of employees is also a rising question.

Worklife Balance Strategies in BPOs

BPO companies have lined-up measures ranging from realignment of shift timings to people-oriented initiatives such as Diwali fests complete with firework displays, to ensure that business continues during the festivities. “We have realigned our timings to allow employees to go back early. Also, advance planning for critical functions such as online interactions has been done. We will be finishing the shifts by late afternoon to allow employees to be with their families in the evening,” said Mr Rohit Arora, Chairman of eMR Technology Ventures. Exëvo, a Knowledge Process Outsourcing firm, has offered a deal to its employees — in case they come in on Tuesday, they would get two compensatory offs. UNDER fire from various sections on labour-related issues, the woes of the BPO industry seem far from over.

Nature of Work at BPOs

In recent months some rather perceptive attempts have been made, one of which — associated with the V. V. Giri National Labour Institute in Noida — seeks to lay bare the nature and structure of employment in BPO call centres in particular as objectively as possible. Among other things, perhaps the most important point which this study seeks to emphasise is that the work conditions to be found in call-centres (which account for 65-70 per cent of the Indian BPO sector) are different from conventional industrial mould .In the service sector, “customers in particular are considered integral to the work organisation, either due to simultaneous production and use of many personal services or due to a strong client-led definition and even co-production of the actual services. This customer-oriented nature of work often challenges the traditional conceptions of control and coordination, especially those of manager-worker control relations.

Further to this, `informatisation’ of work also creates possibilities for novel modes of conceptualising and organising work, leading to discernible changes in work cultures.” There are widely divergent views on what the nature of call-centre work is really like, but attention is drawn to a “wider consensus that the work in call centres characterises some deep-seated contradictions — contradictions of pleasures and pains in the experience of work, and conflicts arising out of the competing logics of customer orientation and rationalisation”. There is little doubt that work at Indian call centres is “unskilled, repetitive and monotonous”. As the NLI paper says, “the workers are subjected to a work regime, which is based on a high degree of computer-telephony integration. The use of such technology, along with use of standard scripts allow the firms to keep the `free time’ between calls to the bare minimum”.

The system also allows managements “to examine the performance of the employee quantitatively — average call time, number of calls and so on, besides allowing the supervisors to listen remotely to the agents’ call, with or without the knowledge of the employee, to ascertain whether the work is being done within the stipulated norms and standards”. Dwelling on this aspect of work in some detail, it says the “entry of the employees is strictly restricted to their work area and the common spaces earmarked for recreation and refreshment. For each entry to and exit from the work bay, the agents have to punch their electronic identity cards… During the working hours, the agents are directed to observe punctuality in taking the admissible breaks, which are also tracked continuously, through computers.

The agents are supposed to be logged in and attending calls for a certain number of hours per day, which prevents them from too many toilet and coffee breaks. For each break, agents are required to log off, while leaving the work-bay and log in again at the time of resuming work. Those who are away from the work bay for longer durations or unable to attend calls for more than certain stipulated minutes are instantaneously warned through intranet messages”. Basing itself on this premise, the paper has referred to comparisons made by some commentators with “the situations of nineteenth century prisons or Roman Slave ships”, which has raised the hackles of a whole range of Indian IT personalities. To critics, such management practices have evoked scenes of call-centres being nothing more than “`modern sweatshops’ or `bright satanic offices’, where the exploitation of labour is ensured through increased rationalisation and Taylorisation of work”.

The paper also refers to what it calls the `emotion burden’ on call-centre employees which results mainly from the requirement of employees being expected “to display customer oriented attitudes and feelings to facilitate a smooth interaction with the distantly placed consumers”. As the paper says, employees “are required to `manufacture’ relationships… Quite often, aspects such as moods of the agents (employees), facial expressions and words are subject to monitoring. The agents are even found forced to either express some feelings, which they do not feel or suppress certain feelings, which they genuinely want to share. In both the cases, the employees find the job depressing and leading to emotional dissonance”. The conclusion is: “Emotional exhaustion adds to the physical and mental strain of the workers, leading to higher levels of stress and burnout under the electronically monitored work and tightly bureaucratised work regime”. To temper these adverse effects, call-centre managements arrange for “structured socialisation” of the employees such as organising consultative forums, arranging get-togethers, etc, the main objective of all this however being the “(striking of) the `right’ balance between work and fun, thereby creating a `productively docile’ workforce”.

There is also the weapon of “illusory empowerment” through the projection of  the image of “superior work, vibrant ambience of workplace, attractive designations, impressive salary structure”, etc, which is meant to enable employees “to cope with the pressures and pains of emotional labour”. The above characterisation of work in BPO outfits does not paint a rosy picture of the working conditions, which leads one to the second question, namely, whether employee-unionisation has not taken place as yet because of the absence of effective leadership. This may, in fact, be the case but it is also true that, if reports are to be believed, an attempt to unionise the 350,000 employees in the sector (80,000 more jobs are to be added this year) by the Union Network International (a global alliance of 900 unions) has till now not met with any success.

The obvious question to ask is: Why has this happened if working conditions in the Indian BPO sector have a lot of scope for improvement? Does the prevailing demand-supply situation have any role to play in the answer? As one outsourcing employee is reported to have said: “A union would make sense if there was no job security. Here jobs are more, people are less — companies are trying all means possible to keep employees happy so that they won’t leave”. The entire controversy over BPO working conditions, at this particular point of time when the country is taking rapid strides towards expansion of the sector, could not have come at a more inopportune moment for the BPO establishment, as represented by Nasscom.

Tactically, it has done the right thing by rejecting outright the allegation. On a strategic plane, the emphasis on minimum standards has been most sensible as also the gradual framing and adoption of a self-regulatory agency “for laying guidelines on a range of issues, including data protection and work conditions of employees”. It can be no one’s case that the BPO sector is uniformly employee-friendly in the country. On the contrary, it should be the universal appeal that the sector should be strengthened further if the nation is to make the most of its IT potential. Hr challenges in the BPO Industry

1. Managing large number of people at a short span of time 2. Development of soft skills and dearth of development in other areas 3. Inter BPO poaching and the supply vs demand gap is another major challenge in the BPO sector. 4. Attrition rate, recruitment is also some of the challenges seen in this industry. 5. HR policies should address challenging issues.

HR Practices

Human resources (HR) as a function is fast changing since it works closely with senior management, business segments, line management and functional leaders in an IT organization. HR management is undoubtedly one of the major challenges ahead for Indian IT companies. The BPO industry is already under stress on account of persistent problems like attrition, confidentiality, loyalty, etc. Managing HR in the knowledge-based industry is not a cakewalk for HR managers as it a multi-task responsibility. In the present scenario, HR managers are performing a variety of responsibilities. Earlier, their role was confined to administrative functions such as looking after manpower requirements and maintaining rolls for the organization. Now it is more strategic in keeping with the demands of the industry.

Bargaining power

Managing people in the knowledge-based industry is critical as the human resource is the soul of the organisation. Since there is a high demand for knowledge workers, talented professionals often enjoy high bargaining power due to the knowledge and skills they have. The attitude is different for those who are taking up responsibilities at a lesser age and a lower level of experience. These factors have resulted in the clear shift to individualised career management from organisation career commitment. Managing the pool of people talent is essential for the growth of knowledge-based sectors like IT and BPO.

Motivating the workforce

As global competition is growing rapidly, a technological edge supported by talented manpower has become crucial for survival in the market, which is why organisations give top priority to technology advancement programmes. HR managers are now performing the role of motivators for their knowledge workers to accept new changes.

Competency development

The success of the knowledge-based industry is dependent on its manpower talent pool. Hence, human capital is the real asset for any organisation. This makes HR’s role critical in recruiting, managing and retaining the best people available. The HR department has a clear role in this process, and determines the success rate of any organisation. If HR managers are not competent enough, this will have a direct impact on the organisation. There is now a need to develop competent HR professionals who are sound in HR management practices with strong business knowledge.

Recruitment and Training

Recruitment has become a major function from an important sub-system in HR, particularly in the IT industry. HR managers play a vital role in creating assets for the organization in the form of quality manpower. Another challenge for HR managers is to put systems in place to make people a perfect fit for their jobs. Skill obsolescence is rapid in the software industry. To overcome this problem, organizations give utmost priority to training and skill enhancement programmers’ on a continuous basis. Many IT companies are providing technical training to their employees on various platforms every quarter. Most find this regular training quite useful, apart from the feeling of security it provides.

The Trust Factor

Low levels of trust inhibit knowledge sharing in the knowledge-based industry. Concerned over recent reports about an employee of an Indian call centre who allegedly sold bank account details, Nasscom is gearing up to face unforeseen challenges regarding confidentiality in the IT industry. It is working closely with legal authorities in Britain to ensure those responsible for criminal breach. Any case of theft or breach of confidentiality should be treated seriously. Such malpractices would pose a serious threat to SMBs in the BPO sector. Most of the small and medium companies in this segment do not have enough capabilities to tackle the situation themselves. Lt Bipin Chandra, Vice-president, India operations, Knoah Solutions, does not believe that this will severely affect the BPO industry in India.

He says, “We have enough security measures as far as data security is concerned. Accessing the database should be need-based only, and if, without necessity, anyone tries to access it, our system will alert us. We have been strengthening our security policies; in any case, our existing system does not allow employees to browse through the data. Going by recent reports, I don’t think there will be any significant impact on BPO companies. Our clients ask for higher levels of security on information systems. Every organisation needs to have a fool-proof security system, apart from building loyalty and commitment among employees as part of good HR policies which are common for all types of organisations.”

Critical Factors

At Wipro they believe that the knowledge-based industry faces five critical challenges. One of the most important is talent management and development. Professionals bring with them a lot of aspirations, and to be on the competitive edge they look out for three important dimensions—learning, technology and early opportunities. A recent study conducted by Wipro showed that people join the company because of the above, and these act as a differentiating model for the organisation. In the IT industry, the best practices of today may not be the best practices after some time, so it is imperative that the company constantly improve its own business-aligned HR processes to be at the leading edge.

Another dimension to the challenges faced by the industry is the growing pace of talent acquisition, which creates with it the challenge of smoother assimilation of new employees into the organisation fold. The pressure of delivering the best quality service in reduced time-frames calls for ensuring that employees maintain a work-life balance. Another important issue, which will continue, is retention of existing employees.

Addressing the issues

Manjula Rajoli, Manager, Talent Engagement & Development, Wipro Tech-nologies, elaborates on how Wipro manages the challenges. “Wipro’s talent management and engagement has a two-fold approach. We contain the challenges by following best practices in two areas—compensation and non-compensation. Challenges arising due to compensation reasons are contained at Wipro by continuously benchmarking our salaries with our competitors and providing merit-based salary increases. In addition, for middle and senior management, we have equity-based compensation through Restricted Stock Units. We also have various employee benefit programmes. These ensure that we stay competitive on the compensation front.” (For non-compensation issues, see box alongside.) Employee care is a top priority. Elizabeth Mathew, Head, HR, TCS (Deccan Park-Hyderabad), states: “At TCS, we value every associate and invest in their personal and professional development. We have a number of associate engagement initiatives that bring associates and their families together in learning, fun and social activities.

This enhances the bonding and commitment to the organisation. We also continuously revise our HR policies, listen to our associates’ opinions, make our policies more people-friendly, and cater to varied needs of a diverse workforce.” The following, according to Mathew, are some of the key issues faced by the industry in general: attracting and retaining talent, meeting volume and quality needs, providing multiple career opportunities, aligning and integrating policies with market needs, and coping with the constant pressure on compensation. Mathew points out that a survey by Hewitt-CNBC TV 18 rated TCS as the best employer in the country. The company has associate-friendly policies, a dynamic focus on people as an asset, and a work environment which is challenging and rewarding. “Career growth and clear career tracks endear the organisation to its people.

The focus on Economic Value Added (EVA) to calculate variable performance pay makes TCSers among the most competitively paid in the market. TCS has a strong Academic Interface Programme for creating synergy and forging strong relations with educational institutes, which brings TCS closer to the budding software engineering community,” adds Mathew. Hanneke Frese, an HR consultant based in Zurich, believes that in order to increase the quality and capabilities of employees it is better to align professionals with the business strategies of the organisation and create an organizational culture that attracts highly competent employees.

She was recently in Hyderabad to participate in an interactive session organised by Nasscom. Frese advises IT companies to achieve the best possible fit between the aspirations of its people, the organisation’s needs and its clients’ expectations. “Productivity in the knowledge-based industry will be another challenge as some key issues are still uncertain. These issues are—who will own intellectual capital, how will knowledge be patented, and what new business models will emerge to make organisations more competitive.”

Employee Benefits Provided By Majority Of the BPO Companies

A part from the legal and mandatory benefits such as provident-fund and gratuity, below is a list of other benefits…BPO professionals are entitled to the following:

1. Group Medi-claim Insurance Scheme: This insurance scheme is to provide adequate insurance coverage of employees for expenses related to hospitalization due to illness, disease or injury or pregnancy in case of female employees or spouse of male employees. All employees and their dependent family members are eligible. Dependent family members include spouse, non-earning parents and children above three months 2. Personal Accident Insurance Scheme: This scheme is to provide adequate insurance coverage for Hospitalization expenses arising out of injuries sustained in an accident. This covers total / partial disablement / death due to accident and due to accidents. 3. Subsidized Food and Transportation: The organizations provide transportation facility to all the employees from home till office at subsidized rates. The lunch provided is also subsidized. 4. Company Leased Accommodation: Some of the companies provides shared accommodation for all the out station employees, in fact some of the BPO companies also undertakes to pay electricity/water bills as well as the Society charges for the shared accommodation.

The purpose is to provide to the employees to lead a more comfortable work life balance. 5. Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities include pool tables, chess tables and coffee bars. Companies also have well equipped gyms, personal trainers and showers at facilities. 6. Corporate Credit Card: The main purpose of the corporate credit card is enable the timely and efficient payment of official expenses which the employees undertake for purposes such as travel related expenses like Hotel bills, Air tickets etc 7. Cellular Phone / Laptop: Cellular phone and / or Laptop are provided to the employees on the basis of business need. The employee is responsible for the maintenance and safeguarding of the asset. 8. Personal Health Care (Regular medical check-ups): Some of the BPO’S provides the facility for extensive health check-up.

For employees with above 40 years of age, the medical check-up can be done once a year. 9. Loans: Many BPO companies provide loan facility on three different occasions: Employees are provided with financial assistance in case of a medical emergency. Employees are also provided with financial assistance at the time of their wedding. And, The new recruits are provided with interest free loans to assist them in their initial settlement at the work location. 10. Educational Benefits: Many BPO companies have this policy to develop the personality and knowledge level of their employees and hence reimburses the expenses incurred towards tuition fees, examination fees, and purchase of books subject, for pursuing MBA, and/or other management qualification at India’s top most Business Schools. 11. Performance based incentives: In many BPO companies they have plans for, performance based incentive scheme. The parameters for calculation are process performance i.e. speed, accuracy and productivity of each process. The Pay for Performance can be as much as 22% of the salary.

12. Flexi-time: The main objective of the flextime policy is to provide opportunity to employees to work with flexible work schedules and set out conditions for availing this provision. Flexible work schedules are initiated by employees and approved by management to meet business commitments while supporting employee personal life needs .The factors on which Flexi time is allowed to an employee include: Child or Parent care, Health situation, Maternity, Formal education program 13. Flexible Salary Benefits: Its main objective is to provide flexibility to the employees to plan a tax-effective compensation structure by balancing the monthly net income, yearly benefits and income tax payable. It is applicable of all the employees of the organization. The Salary consists of Basic, DA and Conveyance Allowance. The Flexible Benefit Plan consists of: House Rent Allowance, Leave Travel Assistance, Medical Reimbursement, Special Allowance

14. Regular Get together and other cultural programs: The companies organizes cultural program as and when possible but most of the times, once in a quarter, in which all the employees are given an opportunity to display their talents in dramatics, singing, acting, dancing etc. Apart from that the organizations also conduct various sports programs such as Cricket, football, etc and regularly play matches with the teams of other organizations and colleges. 15. Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/- based on their level in the organization. 16. Employee Referral Scheme: In several companies employee referral scheme is implemented to encourage employees to refer friends and relatives for employment in the organization.

17. Employee Stock Option Plan Now, the actual question, why people are leaving? What types of retention strategies are required? What is expected from HR Professional and how they can address this issue? Retention – A Big Challenge

Fundamental changes are taking place in the work force and the workplace that promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry. Companies that understand what their employees want and need in the workplace and make a strategic decision to proactively fulfill those needs will become the dominant players in their respective markets.

The fierce competition for qualified workers results from a number of workplace trends, including:

1. efficiency that saves the company money.
2. Set Clear Expectations

o How often do you appraise your employees/team-members?
o What are your expectations from your employees/team-members? What are the parameters to measure their performance? Have you communicated to them? o What will be the consequences, if they fail?

o What will be the rewards, if they exceed the expected level? If you are not having any expectations, how you are going to appraise, your employees? Yes, you are going to be biased, because you don’t have set standards.

The role of a CEO, HR Manager is like a director of a movie; choreographer of a stage show, where there is a defined role for each character, each participant.

Setting expectations initiates the process. Managers need to sit down with each employee and clearly define what’s expected of them. Management consultant, Kenneth Philips, states that when expectations are not clear, employees may not be in sync with their job’s current demands and priorities. Setting expectations is not a once and done activity. Jobs change. Priorities change. Resources change. Managers need to revise and set new expectations throughout the year. Setting expectations revolves around the following three areas:

1. Key job responsibilities
2. Performance factors and standards
3. Goals

Why is a setting expectation important? Quite simply, this process can be the cornerstone of improving the motivational climate within your sphere of responsibility. If your employees know what is expected of them, it allows them to focus on results and to monitor themselves against the set standards. Environments in which expectations are not clear, or change from week to week, seldom create high-performing work groups.

The three principles that should drive expectations are clarity, relevance, and simplicity.

Clarity: Expectations should focus on outcomes, not activities. In other words, you achieve clarity when you identify the expected results rather than the method for achieving them. Managers often make the mistake of attempting to direct the process that an employee will use rather than being clear about results. The advantage of identifying the outcome is that you, the manager, focus only on the goal; after all, the employee will develop the method for achieving the desired results.

Defining the objective often requires some thought on the part of the manager because it is easy to fall into the “activities trap.” While developing a strategic plan for a department or division is a worthy activity, it does not represent an outcome. In the activities trap, developing a plan is the goal, rather than increasing your market share.

Relevance : The principle of relevance helps define the “why” of the assignment. If your employees have a full understanding of the project’s importance, they can make adjustments as unanticipated factors crop up within the process. They probably also will be more committed to the result because they can see more easily how it fits into the big picture and how their efforts impact the company.

This understanding typically is accomplished through dialogue between the manager and subordinate, which allows for a more thorough review of the situation and for feedback and discussion. This process builds good will with the employee and sets the stage for additional responsibilities.

Simplicity : Simplicity creates a sense of grounding for employees as they endeavor to carry out assignments. If managers identify the work in simple, straightforward terms, employees will find it much easier to follow through on managers’ wishes. To accomplish this, a manager must identify the key message in a fashion that the employee can embrace.

Proper Rewarding

A research reports says that in today’s scenario, 70% of your employees are less motivated today than they used to be. 80% of your employees could perform significantly better if they wanted to. 50% of your employees only put enough effort into their work to keep their job. As you might be aware of Employee Reward covers how people are rewarded in accordance with their value to an organization. It is about both financial and non-financial rewards and embraces the strategies, policies, structures and processes used to develop and maintain reward systems. The ways in which people are valued can make a considerable impact on the effectiveness of the organization, and is at the heart of the employment relationship.

The aim of employee reward policies and practices, if any in your organization is to help attract, retain and motivate high-quality people. Getting it wrong can have a significant negative effect on the motivation, commitment and morale of employees. Personnel and development professionals will be involved frequently in reward issues, whether they are generalists or specialize in people resourcing, learning and development or employee relations. Keep following parameters in mind, while designing a reward policy:

Build a high degree of recognition value into every reward you offer.

Recognition is the most cost-effective motivator there is. While the high cost of other rewards forces us to give them sparingly, recognition can be given any time, at very little cost.

Some very ordinary items and events can be imbued with extraordinary motivational significance, far in excess of their monetary value. I am constantly amazed at how motivating a pizza or movie tickets can be if is given with sufficient appreciation. A sincere thank you can be delivered at any place and at any time, costs absolutely nothing and can be more motivationally powerful than a substantial monetary bonus. Organizations can provide innovative recognition in an infinite number of ways.

For example, (A Hypothetical Incident) a small manufacturing company made its employees feel like heroes when they attained a major safety milestone – 100 days without a single accident. On the morning of day 100, it was announced that a catered lunch would be served the next day, if they made it to the 5:30 shift without an accident. At 5:15 anticipating was building. Managers took confetti and streamers to the balcony overlooking the shop floor. When the 5:30 whistle blew, there were congratulations all around, confetti flew through the air and banners were unfurled. It was a great moment for everyone – and one that was not soon forgotten. The recognition value of this celebration was extremely high, while the monetary cost was relatively low.

Highly motivating organizations even celebrate small successes. A health-conscious company distributes fruit bowls to employees’ work areas when key personal milestones are attained. Another company uses a more fattening approach: fresh-baked chocolate-chip cookies to say thank you.

Reduce entitlements and link as many rewards as possible to performance.

Clearly the traditional “pay for loyalty” systems in most organizations need to be changed. Don’t let attendance be your major criterion for rewards. Most employees resent those who only put in their time and yet receive the same reward as those who go the extra mile. Today’s employees have higher expectations for what work can and should be, and they want to receive rewards that reflect their personal efforts and contributions.

This is why so many companies are moving toward performance-based rewards, including performance bonuses, gain-sharing and non-monetary recognition. Although not a panacea, companies are finding that these new reward systems do allow them to give substantial rewards to those who really deserve them. Smart organizations are looking for opportunities to reduce across-the-board entitlements, and thereby find more resources for discretionary performance-based rewards, without increasing the total cost of rewards.