Rewards

It is the end of the year again where employees will undergo a performance assessment process with their line supervisor/manager. This process is to assist the employer in determining the level of Rewards to be granted in the coming year. The Rewards will normally be in the form of salary increase and bonus.

Assessment is generally done on an individual basis. It is based on fulfillment of a set of targets which were established at the beginning of the year. Performance assessment is a ritual that is quite common in a dynamic business organization either for the white or blue collar employees. The dynamism of performance assessment ensures that culture of high performance is embedded and rewards are distributed based on performance.

However rewards distribution is not a straight forward process based on an individual performance level. If ever it will be a simple process similar to the rewards of sales commission, which is transparent and numerically simple. Even though sales commission is part of rewards, however it is not applicable to non-sales employees. In distributing rewards, a business organization will normally set a budget to spend in awarding salary increase and bonus. This budget will form as a financial control to ensure rewards are spent within the affordability of the organization.

High performance culture dictates that business organization provides higher rewards to higher performer, this will ensure that the business organization will reap the right benefit of the scheme. The rewards will be a motivation for the higher performer to maintain their performance and for others to achieve a higher performance level to attain the higher rewards. With this cycle of performance competition, business organization will realize heightened productivity and profit year after year.

In order to reward a group of employees based on a fixed budget, a process of ranking the employee's performance will be most ideal so that appropriate group based assessment can be performed. However ranking employees is a tough process, no measurement of quantity and no transparency of quality can satiate the perception of justice and correctness. Ranking is based on perception and whether the perceiver has the right information to form a right perception will be debated until there is no end.

However, through the process of differentiating rewards based on individual performance, there will be a conflict between individual and team contribution. Unless there is a specific team rewards, rewarding entirely based on individual ranked performance will weaken the cultivation of teamwork. The business organization needs to address this conflict and devise a reward based on teamwork performance.

In any team, there will be frontline position, middle position and backline position. Due to this structure, there are plenty of pitfalls in performance rewards. Some of them are due to overemphasizing on the team score. Similar to a football/soccer team, if only the score line on the score board is given importance, there will be overwhelming chance that higher rewards will be awarded to the goal scorers. Whereas, without the middle and backline positions playing their appropriate role, the frontline position may not even able to score.

Some other pitfalls are due to popularity contest, how many knows the person being assessed. To neutralize popularity, it should be weighted in a similar fashion to the frontline, middle and backline positions as exposure will depend on the role one plays.

Some guidelines on having an acceptable performance assessment and ranking exercise are quite basic. A certain acceptable level of knowledge of the jobs and skill requirements, job challenges and job mannerism will assist in putting a right perspective for assessment. Then providing equal importance to scoreboard, score chart and unreported but overwhelming supporting roles will ensure a balance assessment and ranking.

As for me, I will leave it to Allah. Thank you.