Organizations are in a bind when it comes to performance appraisals this year, with interesting implications in line for pay increases, along with the retention of top talent, and overall employee morale in these unprecedented times.
We have already begun to feel the effect of the coronavirus pandemic on key business and people processes through sectors as the global economy struggles to cope. At this point, it’s difficult to estimate the possible cost of this outbreak because we’re still trying to deal with the crisis. However, we can see how the pandemic is impacting different organizations.
The objective of performance management is to pursue a method that helps individuals and teams manage themselves efficiently to achieve their objectives and organizational success. To be efficient, effective performance management should build unity and a common understanding of what needs to be accomplished and what individuals or teams must do, learn, and improve.
Performance reviews are used to equate an employee’s accomplishments to their objectives and aspirations, as well as to set performance criteria for various positions and levels.
Owing to the current state of affairs and low or no business demand, all companies in all industries have reduced critical operations. The aviation, transport, hospitality, and tourism sectors have been hit the hardest by the lockdowns. The car industry is also experiencing significant supply chain disruptions as a result of the outbreak. Salary increases and bonus pay-outs are likely to represent the financial effect of the recession across companies, and these industries are likely to be the hardest hit.
Projected Wage Increase: 9%
Also, the prolonged economic recession that followed the virus pandemic is expected to affect the pay-outs this year. In 2020, Indian workers’ wages are projected to rise by 9.1% on average. According to an Aon report, this wage rise was the smallest in a decade, reflecting the economic downturn we were witnessing. However, the impact of the pandemic on the global economy would be greater. Many companies are taking a wait-and-see approach to determine the current situation, so we can anticipate gradual delays.
Furthermore, we should expect hikes to be cautious, with a greater effect on bonus payouts than fixed pay raises since they are a result of an organization’s business success.
According to a study in a leading financial newspaper, India’s IT services sector will have to freeze pay raises and reduce incentives to cope with the losses incurred as a result of the Covid-19 pandemic.
Many businesses have communicated the possible financial effect of the pandemic on their workers. Because of the coronavirus pandemic, Google has reported delaying employee performance evaluations and promotions. Back in 2020, Apollo Tyres had confirmed that its top management would receive a pay cut ranging from 15% to 25%. Air India, which is owned by the Indian government, has also announced a cut in allowances.
Employees are also nervous at the moment, and they are vulnerable to rumors and speculations about appraisals and wage increases, which can damage employee morale. Although the economic downturn is inevitable, we must note that it will pass. Our workers are our most valuable asset.
Employers can create a loyal, committed, and empowered workforce during periods of crisis by being prudent and open in their decisions and communication. It’s time to connect with staff and control their desires. This necessitates companies being proactive and explicitly communicating to their workers the financial effect of the economic recession on revenue and profitability, as well as how this relates to bonus and salary increases. This will not only help them explain the salary changes they intend to make in the future, but it will also help them maintain employee productivity and minimize future turnover.
Organizations cannot afford to lose top talent at a time when they are searching for creative ways to ensure business continuity. As a result, rather than postponing assessment conversations, holding them now would help with future growth and aspirations. In addition to immediate monetary rewards, recognized talent must be told they are top performers through appraisals to be retained. Employee apprehensions would be reduced as a result of appraisal talks, as will greater openness in communication, which is critical during these periods.
This coronavirus pandemic has forced companies to make difficult choices, but it has also allowed them to reflect, rethink their strategy, search for ways to cut additional costs, be creative, introduce effective business continuity models, and most importantly, learn to cope with these difficult times resiliently when leading their teams. These are the groups that will assist organizations in regaining their footing when the time comes.
The year 2019-2020 witnessed a number of layoffs due to the effect of Covid 19. The most famous of them being Uber technologies who laid off 3000 employees in India. A number of such other countries also laid off employees under pressure from lesser economic activities in the lockdown periods. This definitely resulted in resentment in the hearts of the employees. On the other hand, in the post covid scenario, companies are gradually coming back on track and have started with increasing the salaries of their employees. This has in fact given a boost in the moral status of the employees and increased their performance.
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