Many visitors on EmpXtrack’s website come to look for Free HR software. Because there are many softwares in different domains that come for FREE, they expect that there can be a Free Human Resources Software too. This post will discuss “Is there any free lunch (software) at all?” for Human Resources Management. I will also try to bust the myths about the softwares that are available for Free.

Why HR Software is NOT free?

Let me begin with why there can’t be free software in HR Domain.

My first argument is that it takes lots of efforts to develop an HR Software, because an HR Software is not merely a plain database of employees information fields (like in an Excel Sheet or MS Access) but a large collection of various types of information which are linked to each other in a logical way so that an output can provide a Common Sense View about the employees.

If I need to define HR Software I will say “HR Software is a process for the collection, analysis, interpretation and presentation of employee’s data. It can provide tools for prediction and forecasting based on data. Thus it can be used for a wide variety of management decisions, financial decisions about manpower, performance of people, succession planning and removal of non-performers.” Such an important software, which provides a total MIS on human resources has to be created with great care. How can you get it for Free.

My second argument is that there are huge number of HR Processes and policies. Almost every company has its own HR policies and practices. To develop a globally applicable HR software, the software vendor has to study hundreds of HR practices, analyse the data patterns, and then develop a good HR Software which can be customized to the specific practices/ processes followed by the user. Thus a good HR Software requires thousands of man hours of effort before it can add some value to HR. Anything which requires efforts at such a mass scale cannot be developed for free. Because there is no free lunch for the developers and no one else can do it!

But there are free softwares on Internet?

Yes, some of my friends will say there are free softwares available on Internet. To find the truth, I searched for “Free HR Software” on Google. Look, what I got:

Result 1: First result took me to a site which was displaying Google Advertisements all over with three paragraphs using keyword “Free Hr Software”.  Brute SEO.
Result 2: Second result took me to a HR Vendor giving Free 30 Days TRIAL version.
Result 3: Third result took me to an Open Source Software. I downloaded it and even with three days effort I could not install it on my computer due to lack of knowledge of My SQL/ PHP . Only one of my friends who is a software engineer could install it for me. He charges US$ 50 per hour from his clients.
Result 4: This result took me to a site giving FREE DEMO of the software.
Result 5: Again a Google Adsense blogger with lots of Free HR Software text on his page.
Result 6: Next result offered Free Software DEMO only.
Result 7: Some article about HR software.

No more patience…my friend.

Please try it, individual results may vary according to the country you search from, but I bet not much variance. If you are still searching Free HR Software on Google, you are merely testing your patience.

Does Free Software mean not paying for it?

Consider you could search a Free HR Software. (I mean a feature loaded HR software not HR database based on Excel or MS Access). You downloaded it.

• In 90% cases you need to have knowledge of Computer Networks and Servers to install this. Then this will most likely not meet your requirements and you need to spend a lot of time figuring out what to do and then trying to configure it to meet your basic needs.
• Now you should have an HR Technology Expert (who knows both software and HR logic) to configure this for you. If you hire such person they can cost you as high as $ - 50 per hour. If they put in 2 weeks of effort = 128 hours their cost can go up to US$ 6400.00
• Let me hypothetically assume that one of your HR Managers on board can do it for you and they spend their 2-3 weeks to configure this - you have already paid about $2000 worth of their effort to your Free HR Software.
• Then you need to upload your data into it by spending long hours to re-align your data in a way that it can be uploaded in the system. Let me consider it will cost minimum US$ 500 worth of effort (15 days salary).
• If you want to change any feature of the software (say your leave management process or add an additional field in your database) you need to hire a software programmer. At a very cheap rate in a country like India you need to pay close of $1500 per month to a worthwhile programmer.
• Another option is to Buy Paid support from the developer company, which can cost you up to US$ 5000 that includes a free phone support.

Calculating the above costs, your Free Software for HR can COST you between to $1500 to 6500 (I bet many paid softwares are priced far cheaper). And this without a guarantee that the software will run bug free, without much support at hand and with no surety of updates. Not to mention that complaints, work-halts, etc will come to you from your employees and the management.

Caution: These Free HR softwares DO NOT Guarantee the backups / data security. They indeed quote terms and conditions at the time of installation (but who cares to read those notices), people just install.

About Other Free Softwares:

I will repeat there is no free lunch. All Free Softwares are supported by Advertisers’ budget and you see these advertisements in the sidebar, and as a link in your email. Most free versions are limited versions - everyday prompting you to upgrade to paid versions. Indeed Free softwares are mere Advertisements of the products they want to sell without paying for advertisement cost in Google etc.

Would you like your HR Software to show your competitor’s advertisement to your employees?

Some are really free!

Yes, there are a few community driven softwares like OpenOffice, some programming softwares like Java, Operating systems like Linux, which are more or less a commodity, available for free download. However, at the back end they are supported by some profit making companies who provide paid trainings, paid support or make money otherwise.

The gist “There are no free lunches”. One or the other way, we pay for it!

Now What?
The next alternate to Free HR Software is affordable HR Software. A software which can fit your budget, which costs you about half the annual salary of an HR executive, to say.

There are softwares that will fit every organizations budget. Now go to http://www.google.com and type - Top 5 HR software choices for small businesses. And decide yourself.

Here are the two links which you will love to read: One from CNNMoney.com and other from HRTechNews.com.

I need more Help! My Budgets are Low!

Then fill this form to get in touch with some one who can suggest you an HR software that can fit in your budget (staring from US$ 600 / INR 30,000 and above).

Knowing your Goals and writing them effectively is an all-together different game. To describe your Goals (KRAs) you need to have effective writing skills and sound knowledge of terminology. Unfortunately, some executives/ managers may not have a flair for writing and thus unable to write their Goals (KRAs). This is true for HR also. So here are some tips that will help Talent Junction users to write Goals (KRAs) from the Job Descriptions.

SMART: A Smart Goal (KRA) is one which is:

1. Specific : Clearly stated what to do and how to do?
2. Measurable: States how the performance for this goal will be measured.
3. Achievable: It can be achieved by employees if they work really hard (You can draw this conclusion by talking to employee, manager or someone who has done this job successfully).
4. Relevant: The KRA (Goal) is relevant to the job and the performance on this goal will improve productivity of the employee.
5. Time Frame: States a time frame to achieve the goals.

How to WRITE  SMART Goals (KRAs)?

Here are the steps how anyone can write Goals (KRAs) from Job Descriptions:

1. Go through employee’s Job Description. If Job Description is not updated talk to employee and his/her Manager or many be manager’s manager also.
2. Try to find out exactly what the employee is supposed to achieve.
3. Based on your reading and discussions, make a list of the functions and responsibilities which are critical to the employee’s job.
4. Categorize these critical functions and responsibilities in two categories:
   • A : Which can be measured whether in numbers or percentages or yes/no.
   • B : Which cannot be measured in numbers and cannot be calculated.
5. ‘A’s are the one which can be be converted to Goals (KRAs).
6. Make a list of all critical functions.
7. Write a self explanatory (1 sentence ) definition of each Goal (KRA).
8. If you plan to follow BSC (Balanced Score Card) Pattern, then categorize each goal into one of the following categories: Customer, Financial, Internal Business Process, Learning and Growth.
9. There after describe each Goal (KRA). Make sure you mention a measurable target to be achieved and time frame for achievement of the Goal (KRA).

An Example

I picked up job description of a Sales Manager in a company and here are the functions mentioned in the JD.

Functions of a Sales Manager:

• Develops a business plan and sales strategy for the market that ensures attainment of company sales goals and profitability.
• Responsible for the performance and development of the Account Executives.
• Prepares action plans by individuals as well as by team for effective search of sales leads and prospects.
• Initiates and coordinates development of action plans to penetrate new markets.
• Assists in the development and implementation of marketing plans as needed.
• Conducts one-on-one review with all Account Executives to build more effective communications, to understand training and development needs, and to provide insight for the improvement of Account Executive’s sales and activity performance.
• Provides timely feedback to senior management regarding performance.
• Provides timely, accurate, competitive pricing on all completed prospect applications submitted for pricing and approval, while striving to maintain maximum profit margin.
• Maintains accurate records of all pricings, sales, and activity reports submitted by Account Executives.
• Creates and conducts proposal presentations and RFP responses.
• Assists Account Executives in preparation of proposals and presentations.
• Controls expenses to meet budget guidelines.
• Adheres to all company policies, procedures and business ethics codes and ensures that they are communicated and implemented within the team.
• Recruits, tests, and hires Account Executives based on criteria agreed upon by senior management.

After going through the above list I identified the following six functions (actually there can be around 10 but for convenience I chose only 6) that are critical to a Sales Manager’s job and can be measured quantitatively:

Critical Measurable Functions of a Sales manager

1. Improvement in Financial Performance of Account Executives
2. Development of Sales Action Plans
3. Reporting to Management about Performance of Sales Team
4. Negotiates with prospective customers in order to maximize the profits
5. Create and conducts proposal presentations and presentations
6. Adhere to company policies.

Writing Goals (KRAs) for Critical Functions:

Here are the KRA (/Goals) based on above functions. First I wrote the definition for the KRA and then gave a description along with measure and time line.

Goal Definition	Goal Description
Improves Financial Performance of Account Executives	To ensure that all sales executive under him meets/exceed the sales targets provided to them. Track the performance of sales and guides the salesmen to improve their skills to ensure more sales. Target: US$ 500,000 per quarter for the whole team.
Development of Sales Action Plans	Conducts market research and develops solid sales plans. Sales plan must be reported every quarter to management team for analysis and approval. Target: Renew and Renovate the Plan every quarter. Target: Conduct 2 Sales Training per month.
Reporting to Management about Performance of Sales Team	Create and send the monthly reports with accuracy and time to management. Reports should clearly indicate the strengths and weaknesses of the sales team. Target: Complete Reports to be send by 7th of Every Month.
Negotiates with prospective customers in order to maximize the profits	Sales manager should ensure that all salesmen are pitching most competitive and profitable rates to the clients. Target: Average Selling Price: US$ 10,000 or above
Create and conducts proposal presentations and presentations	Reply to Request for Proposals, Tender Notices, and Price Quotations in Time. Target: All Proposals to be submitted to management for review 2 days prior and to customer as on date.
Collections of Due Revenues	Sales Manager should assist the Accounts Receivables manager in collecting all due invoices in time. He/She should ensure that customer has accepted the delivery of the product and the Invoice. Target: 80% of the due invoices to be collected within 30 days/ ad agreed in Purchase Order.
Adhere to company policies and procedures	Ensure that all teams members attend the weekly sales meet and present their report. Target: 90% attendance in Sales Meetings.

If you are an HR Manager/ Manager and need help on creating SMART Goals for your organization please fill the following form. To view Free Demo of Goal Setting System click here.

“I think Steve is a great guy.” doesn’t work anymore. It has to be “Look at John’s sales performance report. It says he is doing great job.”

The next thing that comes into picture is Employee Performance Appraisals. More than ever organizations are looking to set SMART goals and conduct performance appraisals honestly. But does HONESTY itself gives accurate results?

Consider the case of three managers in the same department of an organization in Year 2007. The performance of the teams of these managers was at par with marginal differences.

Manager A: Ram is one of the youngest managers and hails from Generation Y. He is very optimistic and looks for positive side of the employees. He believes in motivating by carrots.
Manager B: Sonia is in the middle of her career. She has high career prospects in the company and looking for promotion in 1-2 years. She likes to play safe.
Manager C: Johnson is an ex-government employee. For him discipline and loyalty come foremost. He cannot tolerate any deviation from policies and authorities. He believes in the stick.

Here are the scores given by each of them to their team members on the scale 1- 10:

Ram		Sonia		Johnson
Name	Scores	Name	Scores	Name	Scores
Meera	10	Amar	5	Mohan	7
Scott	7	Steve	6	Lada	6
Sunil	8	Phillips	5	Harris	5
Tim	6	Lacey	7	Adam	4
Nita	9	Edwards	5	Mike	6
Peterson	6	Mary	6	Jackson	4
John	5	Kate	7	Reema	5
Rob	7	Seema	6	Sheela	4
Mukesh	8	Peter	8	Lucy	5
Sarah	9	Ramesh	5	Olang	7

If HR looks at the employee scores and rank performance according to the scores obtained in the appraisals, the following picture will emerge:

Top Performers		Mediocre Performers		Bottom Performers
Meera	10	Rob	7	Lucy	5
Nita	9	Scott	7	Reema	5
Sarah	9	Lada	6	Harris	5
Mukesh	8	Peterson	6	John	5
Peter	8	Seema	6	Edwards	5
Sunil	8	Tim	6	Phillips	5
Mohan	7	Mike	6	Ramesh	5
Olang	7	Steve	6	Adam	4
Kate	7	Mary	6	Sheela	4
Lacey	7	Amar	5	Jackson	4

Inferences that can be drawn from the above table are:

• Most of the top performers are from Ram’s Team.
• Most of the bottom performers are from Johnson’s Team.
• The best of Sonia and Johnson are nowhere near Ram’s team members.
• Ram has no bottom performer.

The questions that arise?

1. Is Ram performing because he has got all top performers?
2. Is Johnson such an effective manager that he can drive results even with mediocre and bottom performers?

The above table clearly shows that using the “employee appraisal scores as it is” doesn’t provide accurate information about an employee’s performance. It also indicates that there are personal biases/ nuances in the scores. It will, thus, not be prudent to plan succession, compensation and more importantly “Firing Decisions” based on these numbers. What’s Next?

There are two processes that can help remove the personal biases from appraisal scores: Normalization of Appraisal Scores and Relative Grading. Read more about Normalization of Appraisal Scores in a White Paper by Maj Gen Bhatia.

And watch out this blog later for a new blog post on Relative Gradings.

The organization in the study is one of the largest retail stores chains. They have around 100 retail stores in different locations and looking to expand further to more than 200 store across the country.

Organization has a centralized Human Resource Department located in Head Office. HR decision and process are controlled centrally. However, many HR tasks, policies and procedures are managed by retail Store Managers or regional offices.

The organization used excel sheets to exchange reports. Reports coming from various regional offices and stores were compiled in Head Office by a team of HR Executives and HR managers.

Keeping in view the nature of organization, the case study is equally applicable to organizations having retail chains in Consumer Goods, Health Care, Multi Locational sales offices etc.

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And why not, after all it is the Human Resource Department that is bearing the burns. HR has to do the most disgraceful job of laying off people, because Businesses can no more afford to pay them. Employees that are chopped off curse HR, even though most HR Managers will be at no fault . HR that used to be hero at the time of a flourishing economy is now suddenly considered a villain making plans and strategies to show door to people. Adding to the sorrow, HR has also been ordered to chip off salary packages, incentives and benefits, making the life tougher for those who are fortunate enough to remain employed,,and to bear their blames and curses.

Sad, but it triggered me to search for the rays of hope that prove that Recession will not last long. Here is my list:

Hope 1: Determination of Leadership

There is a very strong determination amongst the political and business leadership to curb the recession. Never in the last few decades we saw such a global and massive effort to fight economic crisis. This determination is sure to find ways out of the recession and foray into another blooming decade 21st century. I think recession is the birth pang of human society into a new era.

Hope 2: New Thoughts on Management

The past and current failures have triggered new thought processes against the current business practices. A new thought to bring better management practices, more financial transparency in the businesses, more control over the plans and strategies and an improvement in global business culture is conceiving in every mind.

Hope 3: Emergence of New Leaders and Think Tanks

The sudden failure has also given an opportunity to those taking the back seat with their innovative ideas (as nobody considered these ideas during the flourishing economy) to emerge out of their shell. Not only there is a shift in economic centers, there is a shift in the power of various thought-schools. Those who were champions of anarchic freedom have stumbled and those calling for a controlled and consistent growth are emerging as the new think tanks. If it is happening at your organization, do you have right tools to measure?

Hope 4: History of Men

If you think recession is a big accident, think about the damage done by World Wars, Epidemics, Great Depression, Hitler and so on. You will find recession is too small for men to overcome. This is merely a small puncture in the economic wheel and the speed has more of corrected rather than frozen. There are still companies hiring. Ask recruiters, they are still unable to meet their goals. Hence, in a year or two this too shall pass.

Hope 5: New Developments in Technology

The major difference between different eras of men has been technology. Pre-historic man had no technology, just a human body and a small animal like brain. Discovery of metals opened the door to new tools and men could construct houses out of stones. When wheel was invented, long distances became short. Invention of steam engine and ships shortened the distance between continents. Invention of Aeroplane made the world just a few hours long. With each technological advancement human society met the specific challenges. In regards to HR Domain, technology is developing at a pace like never before, to improve performance of people and the profits. And leaders know that new performance improvement tools can make a big difference in meeting new challenges.

So there is really no reason to be sad. Its time to stand up, shred the dust and start running once again towards our goals. And this makes me sing these motivating lines:

We shall overcome, we shall overcome
We shall overcome some day
Oh, deep in my heart, I do believe
We shall overcome some day.

Note: Please add as a comment what you think are the other rays of hope for HR out of this recession.

What the future holds for HR Technology

With the baby boomer generation retiring, there is a massive talent shortage in the Western countries. Organizations will have to optimize their workforce to deliver at the lowest possible manpower requirements, and any solution that can help them do this effectively will be a sure winner.

The maturing of Internet based technology platforms, acceptance of the SaaS concept by the market at large, good security standards and low cost of bandwidth are further enablers. We are fortunately in a good period at the right time and hope to capitalize on the trend. 

On competition in HR Technology Domain

The HR software products industry, fortunately for us, is very fragmented with lots of providers in niche areas. We were amongst the first few companies to offer an integrated solution which covers the entire gamut of HR activities. Incidentally, this is our value proposition too.

Moreover, the market is evolving with a huge opportunity for growth across the world. Some estimate this to be a $600 billion market by 2015, and we are looking for a sizeable chunk of that. Having said this, the biggest challenge is adapting the solution to the regulatory needs and HR processes of all our target markets as well as building a solution for a global enterprise.

On Pleasures and pains of being an entrepreneur

People make the organization and each organization acquires a unique DNA. To begin with, it was difficult to identify our DNA. Now, as we are growing, the difficulty lies in replicating or cloning the key people. I think it is all about people at any stage of organization maturity!

Network, ask for help, hire differently, outsource non-key activities and keep on trying till a few things appear to work.

Most importantly, be extremely transparent with existing employees, vendors, contractors etc. Those who decide to stick with you would be sharing your dream and hopefully support you through thick and thin. Try to mature your HR processes as early as possible in your lifecycle. This has helped us immensely in identifying and retaining talent.

On Pointers to fellow entrepreneurs

1. Be patient
2. Continue to believe in yourself
3. Experiment
4. Have fun

Read the complete interview on Prayag’s Site

> Dear Mr. Gireesh Sharma,
>
> When most people consider traditional performance appraisals a time consuming and expensive task, I also believe they are ineffective in the present work culture of organizations.
>
> I would like to hear from you the better ways to get the performance appraisals done effectively ,successfully and quickly. Or is there a way out of performance appraisals?
>
> Regards.
> A.A Basheer

Basheer’s concern was to a large extent genuine. I would like to share with you what I replied to him:

Dear Mr. Basheer,

Thanks for writing.

I (to some extent) agree with your thought that “most people consider traditional performance appraisals a time consuming and expensive task“. Is there a better way to do it? Yes it is!

There is an old Kaizan saying “You can improve only what you can measure“. Thus measuring (or knowing) where you are and where you want to head, is as important as actually working to improve the things. Performance Appraisals in all its forms are indeed measurement of performance. If you are looking for an alternative, I seriously do not know an alternative to performance appraisals, because it is the only known way (as of now) for measuring employee performance. Whatever way you measure employee performance, it will still be called an employee performance appraisal. But I would surely share my thought on the challenges /solutions for traditional paper-based (or Excel based) employee performance appraisal process.

Some thoughts on “What frustrates employees in a traditional Performance Appraisal process” and how to weed them out:

1. Lack of clarity about the purpose of appraisal like how it will help them improve their job. Many employees are not even aware that a good or bad appraisal can impact their career prospects.

2. Lack of faith in the appraisal process: Employees think that their manager doesn’t write appraisals based on employee’s performance but bias their decisions based on their personal relations with employees.

3. The time consuming process: The highly complex questions which they have no answers to or highly complex competencies which they have never heard of confuse them. Thus employees think that appraisal is a disturbance to their normal work.

4. Difficulty in writing appraisals: Many employees have poor language skills and they are unable to communicate their performance in right language and support with data. This difficulty is further increased when they find extremely difficult questions/ terminology in the appraisal.

5. The lack of feedback after the appraisal: Many companies do not provide feedback to employees on their performance. In a paper based appraisal process the appraisal usually find its place in HR closets!

Problems are well said, but what about the solutions. Here are 5 tips that I think can weed out ineffectiveness of an employee performance appraisal process.

1. HR should clearly define the purpose of appraisals to employees and to managers. This should be the first page of the appraisal form and should also form the part of the appraisal message/ emails sent to employees. Like First page of EmpXtrack Performance Appraisal is a “Main Form”. This form organization’s policy on Appraisals.

2. Employees should be involved in appraisal process. One of my client organization has following work flow for employee appraisals:

• Employee do Self Appraisal —-> Sends to Manager
• Manager Fills Employee’s Appraisal —-> Sends to Reviewer
• Reviewer reviews Self Appraisal —–> Sends to Employee for Acceptance.
• Employee Accepts/ Reject the Appraisal

This process ensures that no appraisals are finished without employee’s acceptance and confirmation. Once it happens, employees know that they have a larger control on their appraisal and this enhance self-confidence.

3. It is better to switch to web-based employee appraisal process. It saves lots of time, money and efforts.

4. Train employees on writing appraisals: Another key to make employee appraisals effective is to provide training to employees on appraisal writing skills. Although you have switched over to web based employee appraisal, there is enough help and training included in the software itself.

5. Provide effective feedback: After an appraisal is done, let employees have a copy of the appraisal for their reference. Also let them know how it impacted their salary, compensation and career. Next time they will ensure that their performance appraisal scores better.

From my experience, I can say that if manager genuinely praise/criticize an employee and does performance appraisal honestly and accurately, he will not only gain respect but also motivate his/her entire team to work harder and smarter.

Thanks and regards!

Gireesh

[Background: This 2,500 employee big company opted for EmpXtrack Performance Management System. Prior to using a web-based performance management system, they used paper based appraisal forms.]

“I have a team of 150 people to review, for me managing employee appraisals is a bigger problem. With an experience of 10 years, writing accurate appraisal is not so difficult. It may be difficult for younger managers but not for an experienced one.“, said Vikram. He continued, “For senior managers like me who also have to review appraisal of my juniors’ teams (I have 8 juniors managing teams of 15-20 each), managing appraisals is a far bigger problem. There is already a long list of urgent tasks with me and then managing 150 employee appraisals, usually in a span of 1 month. It makes me sweat.”

After a couple of weeks, I revisited the company and saw Vikram in his cabin.

“After learning the functions of your new employee appraisal software, what do you think is its best feature.”, I inquired Vikram.

“Apart from usability, I find the E-mail reminders are cool. How convenient it is to get an e-mail when somebody completes an appraisal and send to me or get a reminder when an appraisal is overdue. Earlier I used to get stinkers from HR for not completing appraisals on time. Initially, I was scared with the large number of emails sent to my Inbox. Now, I have set e-mail filters in my email program and all appraisal messages are stored in a separate folder thus keeping my Inbox clean. Each email has a link to open employee’s appraisal directly. Fill it and forget it!”, Vikram chuckled and happily show me his email box and explained how setting filters made his work so easy.

It made me realize how important E-mail reminders functions was for senior managers especially those who have a long list as reviewers. And using filters on reminders makes it quite convenient to handle appraisals of even large teams. I am going to include it in my trainings…

It was in the beginning of year 2002, I worked with a business process outsourcing organization. One day I was working quite late and trying to finish a training project before leaving for the day. The Managing Director, Mr. Aashish, just passed by and saw me. Five minutes back, he came back to my desk and said ,”Hi Gireesh, why are you working so late today?” The rest was a normal chit chat.

This incident left me highly motivated for many months to come. I was amazed by the fact that my Managing Director knew me by name, while I was merely a grass-root level executive, almost a nobody in the organization which was 2500 big. Sometimes later I discussed this incident with my manager and he revealed that on seeing me working so late, MD has called him just to ask my name.

Later on a friend’s recommendation I read “How to Win Friends and Influence People” by Dale Carnegie. In this book Dale Carnegie (Section “Six Ways to Make People Like You”)says, “Remember that a man’s Name is to him the sweetest and most important sound in any language.”, which highlights how important it is to remember and call people by name.

It is a proven fact that employee feels motivated and honored when top leadership remember his/her name and call by name. But how come in organizations which are as big as 500 + employees, can a MD or an HR Manager or anybody at senior management level remember most employees by name? With a sophisticated HRMS (Human Resources Management System), it is possible!

A photograph enabled Organizational Chart or Employee Hierarchy Tool enables managers to see the photographs of all employees in the organizations. This tool shows an employee hierarchy tree showing who’s who and who is in whose team etc. along with their photograph, and other details. Look the image below?

Using sophisticated HRMS tools you can easily allow your managers and leaders to remember employees name and let them win employees’ (respect) and influence them (to perform better).

What are your waiting for? Act Now!

Tom worked with John, the CEO of the company, and was a very talented employee who worked diligently. John being happy with the Tom’s work, rewarded him with a cash prize of $ 1000 (which was a significant amount ), in anticipation that Tom will be motivated to perform better. He also had lots of plans for Tom in the back of his mind. Both Tom and John seemed happy and thought that they did a good job.

Contrary to John’s belief Tom submitted his resignation within a much shorter span. During his exit interview, Tom did not state any specific reason for his resignation too (although, it was found later that he left for a better compensation package). His resignation came as a shock to John, who was genuinely interested in retaining good employees and did all what he could do to ensure it.

‘Where was the mistake?’, questioned the CEO to himself and to me too.

As I did not know much about the employee, it was inappropriate for me to come to any conclusion. But the question always remained behind the back of my mind. I always believed that it had something to do with appropriate compensation planning and rewards.

Here is a relevant a research paper by Rick Garlick, Ph.D., Director of Consulting and Strategic Implementation, Maritz Research titled ‘Individual Differences in Reward Practices‘.

The objective of this research was to find out what motivates different employees and to define some general categories of employees with specific reward or compensation aspirations. Here is an abstract of the research.

While everyone understands intuitively that we are not all motivated equally by the same rewards, you might not know it by the way many companies manage their incentive programs. Many times, human resource managers assume that what is rewarding to them will be rewarding to others as well, which may be a false presumption.

As Maritz Inc. was interested in understanding how the workforce is segmented on its reward preferences, it conducted an online Maritz® Poll of 1,003 North Americans. An analysis of participants’ recognition preferences identified six distinct reward profiles, along with some of the more common characteristics of people that were most likely to fall within each ‘reward’ segment.

Reward Profiles

Awards Seekers (22% of the general population, rounded to the nearest whole number): Awards Seekers want incentives that have both monetary and trophy value. These individuals are highly motivated by gift cards and travel awards. Awards Seekers also place higher value than most others on status awards. They are far less motivated by things that might take time away from their normal routines such as the opportunity to mentor other employees, the opportunity to work with people outside their own area, or the opportunity to take on particularly challenging new projects.

Nesters (20%): This group was defined by what they found de-motivating as much as anything else. Nesters were turned off by incentives that took them away from home. Travel awards and the opportunity to attend conferences were least appealing to this group. Nesters were far more likely to enjoy days off, flexible scheduling, and a reward of a meal with their family than those in the other segments.

Bottom Liners (19%): In many ways, Bottom Liners resemble Awards Seekers in that they are extrinsically motivated. The difference between the two is that Bottom Liners have less concern about trophy or award value and are really only concerned about the monetary value of rewards. This group places the highest importance on receiving a cash bonus. They also value awards, such as ‘point programs’ that they can accumulate. They place very little emphasis on receiving direct praise or recognition in any form. This group had the highest proportion of females (59%).

Freedom Yearners (17%): Freedom Yearners are less materially motivated, with limited interest in things like gift cards and cumulative award programs. Freedom Yearners are best rewarded by giving them flexibility. This includes offering flexible hours, the freedom to choose how to best achieve their goals and the ability to choose interesting and challenging projects. Freedom Yearners are intrinsically motivated and work best when simply left alone. Define the outcomes you want them to achieve, but allow them to find their own best path to accomplishing their goals.

Praise Cravers (16%): These individuals value any type of praise more than any other segment. This praise may be given verbally, written, formal or informally given by peers. These people have a higher desire to have their work acknowledged, with or without an accompanying award of monetary value. These people also have the least interest in taking days off or flexible scheduling, suggesting that they achieve a great deal of personal significance from a job well done at work that is recognized accordingly.

Upward Movers (8%): Upward Movers are undoubtedly the most satisfied and committed among all of the employee segments. They are the least interested in cash bonuses, days off and flexible scheduling. These people love their jobs and want to move up within their companies. Among all of the segments, this group places the highest importance on status awards, the opportunity to mentor other employees, and the opportunity to work with people outside their own areas.

The research demonstrated that meaningless rewards and recognition is about the same as nothing at all. Since companies make a significant investment in recognition programs, it behooves them to gain as complete understanding of their employee populations as possible to facilitate the best results for their investments. Segmenting employees based on reward/recognition profiling and targeting to specific preferences is a way to make sure that their time, money and effort is wisely spent.

Defining appropriate compensation to employees is one of the most important tasks of an HR Manager and the management team because it plays a critical role in retaining talented employees. On basis of the above research and other observations the following points are important while planning employee compensation:

• Compensation offered should fit the reward profile of the employee. To ensure this, manager of the employee should be consulted (because he is the most appropriate person who knows about the preference of the employee) and made a partner in the Compensation Planning.
• Compensation should be offered quickly and as soon as possible, much before your competition offers a better compensation to your Talented Employee.
• Non-monetary compensations plays as important role as a monetary compensation. Rewards like paid offs, paid vacations, free meals energizes employees more than a packet of dollars.

Most organizations that want to excel in their domains and aspire to become market leaders, use Compensation Planning tools. A compensation planning tool involves line managers in helping decide increments for their juniors, allows setup of rules by the HR (compensation planners) to define the increment bands, bonus criteria etc., encourages real time feedback to managers and a collaborative framework to allow full participation of both managers and HR to take decisions about the increments,integrate with appraisal scores, employee attendance, training, and other employee related issues which may impact performance pay and provides management reports & a tool for on-line analysis of financial impact.

Do you think you need a compensation planning tool?