IndiaThink

How Will You Reward for Performance?

Tanuja Badimala writing for the India Times relays the in-country fiscal exhaustion of repeatedly increasing salaries year over year by an average of 12%.  These increases can be blamed squarely on supply and demand as we have discussed in the past.  There is not enough talent in India to fill the roles the world would like to employ them for.  This combined with the rupee rocketing up against the ever falling value of the US dollar, by 9% in the past four months alone, makes handing out these lucrative packages all the more expensive. 

One of the people interviewed for the article states: "If you perform, you get rewarded’’ leaving the author to comment "So IT folks, it could be time for you to get more aggressive in job performance."

How can companies encourage aggressive job performance matched with a compensation plan inside India?  One of the reasons India is such a great place to send work is the cultural systems existing inside businesses that encourages hierarchy and power distance.  Employees listen to their management and follow orders accordingly.  There is limited questioning on how things are done, how they can be done better, and how an individual can move ahead of their manager.  Time served is the greatest value in the equation for getting a promotion.  The result is individuals who stay in their positions for years without demanding promotions.  Yes, these individuals may appear to be very aggressive salary hunters, but its important to keep in mind that many employees, especially those with call center duties, skip from one company to another without promotion desires to gain salary increases inside the same role. 

Employers need to devise schemes that work with this type of population.  India employees are incentivized by money like all other employees in the world.  Creating schemes where performance is not matched against a promotional ladder but instead clearly laid out as a way to increase existing salaries is the best way to proceed. These plans should not be laid out as competing against peers (although they will be) to gain the biggest piece of the pie.  In some situations, building incentives inside teams will be the best way to gain productivity increases.  India avoids individualism and prefers group based objectives.  Devising schemes around these preferences will create competition across bands of teams but will not result in uncomfortable feelings around beating out peers and being selected as the "best."

This coming change should not be underestimated.  US based companies typically provide at most a 5% increase on average to their employees in the IT industry with more accurate numbers coming in around 2%.  Imagine how you would deal with a staff that was used to receiving very large raises each year...and suddenly wasn't.  This storm is going to be knocking on your door soon.   

What is: Individualism?

America is the most individualistic country in the world by almost every cultural researcher’s account on record. We instill independence in our children at a young age, pushing them out in their early twenties to support themselves.  Children are allowed and encouraged to disagree with elders, displaying their independent thought.  Our individualism spills into our work life, where we identify ourselves by our profession and what we have achieved.  Through our protestant origins Americans believe people are blessed through hard work and determination, which leads to their perceived success.  These ideals result in Americans deriving extensive identity from their profession with a tendency to believe that ANYTHING is possible.  Training, hard work, effort, determination are the keys to the kingdom. 

This is, unfortunately, the exact opposite of the cultural preferences found for the most part in India.  Activities that are designed for the US will not work as well in a collectivist society.  Training courses that ask attendees to raise their hand if they know the right answer insight competition that is expected in the US but dreaded in India. Creating incentive programs where the top sales person, consultant, driver, or any other job should be avoided.  Calling attention to someone on staff in a way that an American would enjoy and blush will horrify most Indians. 

Be Mindful.  Before implementing a program think about what will motivate participants. Group awards, group projects, group thinking.  You get the picture.