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Don’t Wait For Annual Appraisal For Conferring Benefits.Reward Now!

Posted by Raunak Mahajan on July 17, 2012

“Neither a Republic nor a Prince should put off conferring Benefits on People until danger is at hand.….Let no one, however, put off making sure of the populace until the time of danger arrives, because he may not, as the Romans did, succeed in this. For the people as a whole will not consider that they owe this benefit to you, but rather to your enemies, and, since they cannot but fear that, when the need has passed, you may deprive them of what you have been compelled to give, will in no way feel obliged to you.” –  Niccolo Machiavelli, The Discourses

Corporate Illustration: John walks up to his reporting manager with a resignation letter and states that he has an offer from another company. The reporting manager realizing John’s importance in the organization immediately offers to increase his salary and benefits by up to 20%. John negotiates a hike of 35% and stays back

Now that’s an all too common scenario in organizations around the world and calls into question the performance of existing Appraisal and Reward programs in a majority of companies. While organizations have increased the frequency of Performance Appraisals from annually to quarterly, the process of rewarding still remain annual in all but a few.

Delay in rewarding a deserving effort creates a window of opportunity for competitors to acquire performing assets from your talent pool. And even if you manage to retain the talent by giving into their demands, the payout ends up being several times more than had the rewarding been more frequent. This is evident in the above illustration where the cost of quarterly increments in John’s benefits would have added up to far less than the 35% hike that he eventually sealed.

Also, when the organization rewards John regularly upon the execution of good work, it adds to not only his motivation but also his loyalty to the company. In the illustration above, John walks out of the meeting, not with a sense of gratitude and motivation but with a sense of pride in his ability to squeeze the company’s arm as and when he wishes. Now that is not desirable at all!

Organizations need to re-assess their appraisal programs and stress rewarding good work when it is accomplished and not wait for the end of the financial year. There is a lesson to be learnt from the 15th century strategist.





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