Race course for Kotak Mahindra staff
To make salary and promotions purely performance-based, Kotak Mahindra Bank has done away with the appraisal system for its sales team and designed a programme called Kotak Race.
By Ambika Naithani, TNN |
MUMBAI: To make salary and promotions purely performance-based, Kotak Mahindra Bank has done away with the appraisal system for its sales team and designed a programme called Kotak Race. Under this programme, the employees (from assistant manager level) are promoted and given a raise in salary (both fixed and variable) every month depending on the performance.
This changes the entire CTC and has an affect on the provident fund too, which depends on the basic salary. There are three categories of excellence: challenger, achiever and hi-flier. Challenger is an employee who gets a standards of performance (SOP) score of 60 in the preceding three months. Achiever is one who bags an SOP of 80 for four out of six months and hi-flier is someone who gets an SOP of 100 (the maximum) for 10 out of 12 months. The increment for a challenger, achiever and hi-flier is 10%, 20% and 30%, respectively. Since this percentage increase is successive in nature, a person who joins at Rs 2 lakh could draw Rs 2.64 lakh at the end of each year, i.e. after he becomes a challenger in 3 months, achiever for four out of six months and a hi-flier in 10 out of 12 months. Subhro Bhaduri, executive vice-president, Kotak Mahindra Bank says that this programme has addressed the problem of attrition. “Since this programme’s inception a year and a half back, our attrition rate for this category has halved to 20% now,” he adds.
This system where one’s salary is determined entirely on the basis of performance can put a lot of pressure on the employees. However, Mr Bhaduri says that in case an employee doesn’t perform, he/she is out of the race and gets back only after he/she delivers the targets. An HR head of a bank feels that with such a scheme the basic could be a small component, so that even with successive increments, the hike in entire CTC does not hurt the company.
This changes the entire CTC and has an affect on the provident fund too, which depends on the basic salary. There are three categories of excellence: challenger, achiever and hi-flier. Challenger is an employee who gets a standards of performance (SOP) score of 60 in the preceding three months. Achiever is one who bags an SOP of 80 for four out of six months and hi-flier is someone who gets an SOP of 100 (the maximum) for 10 out of 12 months. The increment for a challenger, achiever and hi-flier is 10%, 20% and 30%, respectively. Since this percentage increase is successive in nature, a person who joins at Rs 2 lakh could draw Rs 2.64 lakh at the end of each year, i.e. after he becomes a challenger in 3 months, achiever for four out of six months and a hi-flier in 10 out of 12 months. Subhro Bhaduri, executive vice-president, Kotak Mahindra Bank says that this programme has addressed the problem of attrition. “Since this programme’s inception a year and a half back, our attrition rate for this category has halved to 20% now,” he adds.
This system where one’s salary is determined entirely on the basis of performance can put a lot of pressure on the employees. However, Mr Bhaduri says that in case an employee doesn’t perform, he/she is out of the race and gets back only after he/she delivers the targets. An HR head of a bank feels that with such a scheme the basic could be a small component, so that even with successive increments, the hike in entire CTC does not hurt the company.
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