Total Rewards Quarterly

As Demonetization Kicked In, This is How India Inc. Reacted

November 8, when the whole world was waiting with baited breath for the outcome of the US presidential elections, India’s economy witnessed a sweeping change in its currency policy. The demonetization and ceasing of ` 500 and ` 1,000 notes as a part of legal tender in India in an effort to reduce corruption, counterfeit currency, terrorism and black money. The immediate effects of such a change were noticed in the form of long lines of people looking to exchange currency, some sectors of the economy struggling with the lack of readily available cash, grassroots businesses still being revolutionized with electronic payment capabilities, and masses of people continuing to transition towards new ways of paying for basic goods and services.

Amidst these crises, there were some ‘Star’ organizations, which when confronted with the same challenging market forces as others, undertook exceptional people measures to support their employees through innovative, outcome-focused Total Rewards practices. There are 4 underlying values that are common to these organizations as far as their employee value proposition is concerned:

  • They put employees at the front and center of all
    their programs and policies
  • They're nimble and react to external environment changes quickly and in the interest of their employees
  • They're flexible; in making policy changes and also allowing employees the flexibility of time to help manage the extraneous factors
  • They build & reinforce their employer brand, by ensuring that each program they deliver consistently aligns itself with the value proposition committed to employees

As part of Aon Hewitt’s Differentiated Total Rewards Practices Initiative, we gathered data on some of these short-term though ‘hero’ practices launched by organizations post the demonetization policy change as under:

  • Setting up kiosks at office premises through bank tie-ups for exchange of old currency with the new ones, in accordance with RBI guidelines
  • All ATMs within office premises being recalibrated and replenished with the official currency (even multiple times at regular intervals within a day) to help ease the employees' tension of money crisis. Organizations also set up micro-ATMs in certain locations
  • Allowing employees to take breaks within working hours to go to the bank or ATMs to withdraw or convert cash
  • Conducting training sessions for employees (especially junior management) to educate and encourage them to use smart cards and digital wallets, thus revolutionizing the mode of payment. Additionally, support being extended by organizations to help issue credit/debit cards to employees who do not already have one using corporate tie-ups
  • Movement to a zero-cash model for all in-house cafe/food court transactions, by issuing tokens to employees or transitioning to mobile wallets
  • A leading online travel company encouraged its employees to bill all their travelling expenses including air tickets to the company, in order to ensure that employees do not have to spend any cash of their own. This, of course, is a timebound initiative wherein the employee’s salary will be adjusted against the expenses billed
  • Offering cash as salary advance to employees to wade through the immediate crunch. A retail organization extended cash amounting to ` 7,000 to its store employees and ` 10,000 to its corporate employees, thereby impacting over 1,000 employees across locations. Additionally, significant quantum of salary advance being extended to support employees for special occasions such as family functions, weddings, family emergencies, etc.

    One can certainly argue that the changes made in employee policies aren't radical in nature but from where we see, these organizations stand apart because the support they extended was timely, relevant to employees and aligned with the organization's employee value proposition. While on one hand, these practices enable organizations in motivating and engaging employees; on the other, it helps employees in shaping their overall employment experience, the emotional connection and the level of discretionary effort they will bring to the organization.

    Thus, many of the most successful organizations today avoid ‘me too’ features in their rewards programs and instead focus on the one, two or maximum three differentiators that are top-class in design or delivery or both. These can be called their ‘signature’ or ‘hero’ programs. And, as the above example shows, these can be the simplest to execute but the outcomes can be extraordinary.

About Aon Hewitt’s Differentiated Total Rewards Practices Study

An on-going Aon initiative aimed at capturing the coolest, most innovative and successful rewards programs practices across a breadth of organizations and industries. An understanding of these practices will prepare organizations and the larger HR fraternity to face tomorrow’s employee challenges. If you want to stay current with these practices and have a practice within your own organization that is uniquely amazing and would like it to be featured in our study, do write to us.

Poonam Chopra
Senior Consultant,
Aon Hewitt

For more information, please write to us at total.rewards@aonhewitt.com
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