Motivating the Employees inspite of Demonetisation blues
The preceding year 2016 has given few gigantic reforms which are going to lay an impact worldwide. PM Modi’s surprise in the form of Note Ban in India is one of a major reform and whether this will prove to be a boon or a bane is still to be seen..!
A very bold move was taken by Shri Narendra Modi, our Prime Minister, on November 8th, 2016, when he announced that all 500 and 1000 rupee notes cannot be used anymore thereby giving a jolt to the country. This move is backed by his idea to curb black money circulation in India and thereby making it a corruption free place. But it is still to be concluded that how far this course of action will prove to be justified for the entire nation?
The major hit is been faced by the salaried class people of the country. The sudden invalidation of 500 and 1000 rupee notes which accounted upto 85% of the cash circulation in the country represented a significant monetary shock. Research have also shown that this black money accounted for a significant portion of India’s GDP. By putting this currency out of circulation, the overall GDP is also expected to low down in the short run. The brunt is being felt by all across industries, be it FMCG, Pharma, Manufacturing, Telecom, Infrastructure, BFSI etc.
However, the proverb “No gain without pain” holds true here as well. The ultimate idea is to seek a better future and fiscal growth of the country resulting out of a corruption free India. In the longer run, tax and interest rates on loans are expected to come down as higher income tax collections arising from better compliance would offer scope to reduce rates over the long term. The cash crunch has drawn all the attention and the industrialists are now focusing just to save the potential losses and to overcome the downfall faced by them.
Jobs & Appraisals
Nevertheless the above, the pain becomes more painful when it starts to pinch the general masses. In such critical time, it is important to hold on to the key builders of businesses i.e. the employees to support the businesses to revive back. . The cash crunch has put the employees and workers out of the annual appraisal limelight. While, it can be expected that appraisals are going to be minimal in the year 2017, job change is also not left as an option to the employees to get better hikes. The “startup industry” is on the verge of shutting down due to this cash crunch.
Even if the revenues are on a slight downfall for the time being, this does not in any way mean that no other appraisal tools are available! Companies should aim to find ways to engage the employees with them rather than focusing only on paying them off. It will result in more loyal, harder working employees. Making Employees a stakeholder in the Company’s growth will also motivate the Employees to work effectively and efficiently in order to enhance the profitability of the business.
Go Cashless with ESOPs
When the entire country is getting cashless, why to stay behind for appraisals!! Effective appraisal tools in the form of Equity Incentives are very much prevalent across industry. Employee Stock Option Plans, popularly known as ESOPs wherein the equity of the company is shared with the employees is gaining acceptance as well as attention in the market as an alternate to cash compensation. Over the years, ESOP has gained worldwide recognition and is now a most attractive tool for employee reward and retention.
Companies are keen to adopt this strategy over vanilla increments. While cash has always been a short term motivator, ESOPs are a dual benefit strategy for both employees as well as the owners. Equity-based incentive plans create a sense of belongingness among Employees as they get directly linked with the growth of the Organization. It makes the Employees think and work as an intra-preneur & motivate them to work effectively and efficiently in order to enhance the profitability of the business.
Equity linked incentives gain all the more significance in the present cash crunched country. Under the present scenario, ESOPs can be prove to be real savior and can rescue both for the corporates who are cash-short and for their staff who is expecting the usual annual appraisals. Stock Option Plans are cashless compensation strategies which act as catalyst for employee behavior, thereby creating successful teams through shared goals. Sharing in equity will not only save the cash outflow from the company but at the same time add value to it by aligning the interests of the employees to the interest of the business and the company. In fact, employees will be paying cash to the company in order to acquire shares under ESOPs thereby generating funds for the company. Companies are extensively focusing on providing various kinds of benefits to their employees over and above the fixed salary. In such a scenario, ESOP can prove to be a carrot, which can be diligently used to reward the employees without cash outflow, and make them a partner in Companys’ growth.
Conclusion
Although the demonetisation policy is facing a lot of criticism however soon we are going to experience much positive effects of this program. It is going to improvise India’s economic and fiscal conditions in the long run. In the meantime we have in place appropriate tools that enable corporates to plan the annual appraisals for their employees by means of offering them equity based incentives i.e. ESOPs. Corporate houses that are implementing or propose to implement ESOPs in this demonetisation period includes names like Reliance Jio, Rolta India, Oracle Financial Service Software Ltd., Carborundum Universal Ltd. etc. The long-term growth potential of a business is directly proportional as to how well it is able to maintain a balance between satisfaction of its employees and preservation of its assets and financial resources. Shared values leads to Shared Success……
Wishing our readers a highly motivated, blissful and prosperous 2017!!
