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In a marked departure from the practice of rewarding top performers with cash incentives, information technology (IT) services companies are increasingly looking at ‘visible’ rewards such as smartphones, high-end cars, and foreign holidays, among others.
Perhaps taking a cue from peers in other sectors, Infosys distributed around the latest version of the iPhone to 3,000 employees while HCL Technologies rewarded its top talent with Mercedes cars and international travel with family.
“It sends a message that we live by the principle of recognising meritocracy and this initiative is a highly visible commitment to that,” said Prithvi Shergill, human resources (HR) head at HCL Technologies which has offered this reward to around 200 of its employees in the last two years.
While money could be a favoured reward for many, experts say that in most cases, the quantum of the payout cannot be disclosed by the employees and thus it does not give them an opportunity to “flaunt” it.
On the other hand, gifts can be flaunted and give both the employee and the employer a psychological boost, which money might not be able to provide. “I call this a visible reward since it is visible to the family and of course the market... It also sends a message to other employees that this is the kind of behaviour we would like others to imbibe,” added Shergill.
In the case of Infosys, the unusual gift is being looked at as a way of stemming attrition, which touched a record high of over 20 per cent during the September quarter. After the country's second largest software firm hired former SAP executive Vishal Sikka as its CEO several initiatives have been taken to boost the morale of employees of the company, which was in a state of turmoil for the last couple of years.
According to reports, the gift was accompanied by a email from Sikka in which he said, achieving what Infosys had “took your boundless energy and extraordinary effort”. “And I believe it's not enough that we simply recognize it, we must celebrate it. That’s why I am so happy that we are presenting you with a Holiday Bonus — the cool new Apple iPhone 6. A gift that'll always remind you and your teammates of the exceptional value you delivered for Infosys,” he said.
Several HR professionals believe this might be a way forward for IT companies, because such rewards have proved to be quite successful in other sectors such as fast moving consumer durables. Surat based Hare Krishna Exports recently made news for its very generous gesture of gifting 1,201 employees with cars, flats and jewellery.
C K Guruprasad, principal at executive search firm Heidrick & Struggles, said that gifts give an employee the feeling of being a top performer and there is an emotional attachment to it. “You may forget a cash bonus or money but gifts remind you of your employer’s appreciation.” of you and you feel a sense of gratitude,” he added.
These innovative measures also allow large companies to compete with smaller ones which reward top performers with employee stock options. During its early years, giving out employee stock options was fashionable in the industry. There are dozens of legends about how employees, office staff and even drivers of IT companies became wealthy due to the stock they received in companies like Infosys in its early days. Though the trend is very much alive, it is more prominent in technology start-ups now because of their comparatively smaller team-size.
Mohandas Pai, former HR head of Infosys, however, is of the opinion that gifts are ‘gimmicks’ which don’t work. According to him, employees should not be overjoyed by these. “These are given to a small number of people who are very well paid so it doesn't matter to them much,” said Pai.
Stock options though, may not have lost their flavour completely with large IT companies. Cognizant is said to have rewarded five of its executive vice-presidents (EVPs) and other associates promoted to the EVP level with restricted stock units.
