The Problem with ESOP’s
February 12, 2025
Introduction We have discussed the performance appraisal process in earlier articles. In this article, we discuss the performance appraisal interview and its importance in the performance appraisal cycle. The performance appraisal interview is the first round in the performance appraisal process and this is the round in which the manager communicates his evaluation of the […]
The purpose of organization assessment programs is to evaluate the potential of employees for growth and development within the organization. Many organizations such as Johnson & Johnson, Ford, Intel and IBM use such programs to fulfill their staffing requirements. Since these organizations are known for continuous innovation, they need special target groups in order to […]
People are, undoubtedly the best resources of an organization. Sourcing the best people from the industry has become the top most priority of the organizations today. In such a competitive scenario, talent management has become the key strategy to identify and filling the skill gap in a company by recruiting the high-worth individuals from the […]
Any employee retention strategy would necessarily include a plan for redressing employee grievances and ways and means to address employee issues. This would mean that the employees would be enabled to take their issues regarding pay, their work, their role etc. to the HR manager for each division and expect to get a fair hearing […]
Do you see various shapes in a crumpled ball of paper? Do you see various colours in a drop of oil mixed with water? If your answer is yes, then certainly you value creativity. Creativity is nothing but the process of creating something unique and new. Creativity indeed plays a crucial role in organizations at […]
The previous articles discussed the theme of rewards and their uses in modern organizations from multiple perspectives. The focus of the discussion was on how an effective rewards management system can boost productivity and improve job satisfaction leading to all round benefits to the companies and their employees.
This article discusses the cutting edge research in rewards management that has been studied in a recent book, Give and Take, by the noted Wharton Professor, Adam Grant. This research that has been published in 2013 notes that organizations are made up of employees who can be classified as givers, takers, and matchers.
The givers are the ones who proactively help others and build great teams whereas the takers are the ones who are always receiving help instead of giving back to the team. The matchers are evenly poised with their attitude of giving as much as they take and nothing more.
The givers operate in high performance cultures where they help others, share knowledge, offer to mentor other employees, and make connections without expecting anything in return.
The takers dominated culture on the other hand thrives by expecting others to help them as much as possible without giving anything in return. Of course, the research showed that most organizations fall somewhere in between with an equal amount of give and take and hence, these cultures are known as matcher cultures.
The implications for rewards management are that the rewards systems must encourage employees to seek and provide help, and reward these employees more than the matchers or the takers, and should screen out the takers so that they do not garner a major share of the rewards. This is a sure fire formula for success in the modern workplace.
The key point here is that in an organizational culture that encourages reciprocity there are fewer conflicts between employees and the rewards management systems must be geared towards encouraging the employees to both seek and provide assistance.
In many multinationals during the induction training, employees are told to not keep knowledge to themselves like they did in college and remember that now they are operating in a team environment where knowledge is to be shared instead of horded. The rewards systems likewise are tailored to ensure that the givers are encouraged and those who are selfish are sidelined.
Of course, it is easier said than done to implement giver cultures as the research proved. Employees most often struggle to make the transition from a competitive culture to a cooperative culture since the incentives are still aligned to results.
Hence, the implications for organizations are that their performance appraisals and rewards systems must include bonuses for those who contribute to the team the most and this has been proved in the research as well.
Finally, organizations must not view the rewards system as a zero sum game where the balance between the givers and the takers evens out. Instead, the rewards systems must be designed in a manner that would create synergies between the teams.
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