You are on page 1of 18




Prof. Rachna Nigam


Jainisha Shah-GLC-


The rationale behind doing this project is to
examine that, what is the role of rewards &
recognition programs in employee motivation,
how different retail companies applies this
strategy for the growth of its employees to
achieve individual and collective goals and also to
examine any drawbacks and hurdles in its way .

The basic for the efficient functioning of a company is that its employees work hard
and stay motivated no matter how tough is the client to deal with . This can only happen if the
employees find a driving force towards working in a better way from within a company . And
a company can reciprocate to its employees in no way better than rewards and recognition . It
has been statistically proved that frequent indulgence of rewards and recognition along with
constant appreciation and most importantly constructive criticism have been the reason for
the employees of any company to work better than they used to. By implementing different
rewards and recognition, firms show that the employee is not unnoticed and that their work is
d early valued.
Organizational success is driven by satisfied and motivated employees . Satisfaction
and motivation can be enhanced through rewards and recognition . Recognizes and rewards
are achievements that have a notable impact on a program, to project an individual activity
that contributes to the vision and to the pursuit of excellence.


To analyze Reward and recognition programs , its goals and objectives .

Approaches to successful reward and recognition program design .

Techniques to measuring employee satisfaction with reward and recognition programs

Approaches to determining program success and performance .

Technologies that enhance the administration and communication of reward and

recognition programs .
To know the employee's personal intention regarding rewards and recognition .
To know the criteria to qualify the reward.

Introduction:- Retail Industry in India

The Indian Retail sector has come off age and has gone through major transformation over the
last decade with a noticeable shift towards organised retailing. A T Kearney, a US Based
global management consulting firm has ranked India as the fourth most attractive nation for

retail investment among 30 flourishing markets.The retail market is expected to reach a

whooping Rs. 47 lakh crore by 2016-17, as it expands at a compounded annual growth rate of
15 per cent, accordingly to the Yes Bank - Assocham study.

The retail market, (including organised and unorganised retail), was at Rs.
23 lakh crore in 2011-12. According to the study, organised retail, that
comprised just seven per cent of the overall retail market in 2011-12, is
expected to grow at a CAGR of 24 per cent and attain 10.2 per cent share
of the total retail sector by 2016-17.
In terms of sheer space, the organised retail supply in 2013 was about 4.7
million square feet (sq ft). This showed a 78 per cent increase over the
total mall supply of just 2.5 million sq ft in 2012.
Favourable demographics, increasing urbanisation, nuclearisation of
families, rising affluence amid consumers, growing preference for branded
products and higher aspirations are other factors which will drive retail
consumption in India, said DS Rawat, Assocham Secretary General.
Retail classification
Retail industry can be broadly classified into two categories namelyorganised and unorganised retail.
Organized retail - Organised traders/retailers, who are licensed for trading
activities and registered to pay taxes to the government.
Unorganized retail It consists of unauthorized small shops - conventional
Kirana shops, general stores, corner shops among various other small
retail outlets - but remain as the radiating force of Indian retail industry.
Market Dynamics
In the past few years, Indian Retail sector has seen tremendous growth in
the organised segment. Major domestic players have stepped into the
retail arena with long term, ambitious plans to expand their business
across verticals, cities and formats.
Companies like Tata, Reliance, Adani Enterprise and Bharti have been
investing considerably in the booming Indian Retail market. Along with
these giant retailers, a number of transnational brands have also entered
into the market to set up retail chains in close association with bigger
Indian companies.
High consumer spending over the years by the young population (more
than 31% of the country is below 14 years) and sharp rise in disposable
income are driving the Indian organised retail sectors growth. Even Tier I
& Tier II cities and towns are witnessing a major shift in consumer
preferences and lifestyles, the result of which, they have emerged as
attractive markets for retailers to expand their presence.

The Indian retail sector is highly fragmented and the unorganised sector
has around 13 million retail outlets that account for around 95-96% of the
total Indian retail industry. However, going forward, the organised sectors
growth potential is expected to increase due to globalisation, high
economic growth, and improved lifestyle.
Although the growth potential in the sector is immense, there are
obstacles too, that could slow the pace of growth for new entrants. Rigid
regulations, high personnel costs, real estate costs, lack of basic
infrastructure, and highly competitive domestic retailer groups are some
such challenges.
Key drivers of the Indian Retail Industry
Emergence of nuclear families
An increase in the double-income households trend
Large working population
Reasonable Real estate prices
Increase in disposable income and customer aspiration
Demand as well as increase in expenditure for luxury items
Growing preference for branded products and higher aspirations
Growing liberalization of the FDI policy in the past decade
Increasing urbanisation,
Rising affluence amid consumers
A long way to meet international standards
Lack of efficient supply-chain management
Lack of required retail space
No fixed consumption pattern
Shortage of trained manpower
Lack of proper infrastructure and distribution channel
Emerging sectors/trends in Indian retailing
Within retail, the emerging sectors would be food and grocery, apparel,
electronics, e-commerce, fashion and lifestyle.
Incorporation of technology in the organised retail segment has been
something to reckon with in the past few years. Use of computers for
merchandise planning and management, control of inventory costs and
supplies and replenishment of goods done electronically, internal store
billing, etc has changed the face of product retailing.
Online retail business is the next gen format which has high potential for
growth in the near future. After conquering physical stores, retailers are
now foraying into the domain of e-retailing. The retail industry is all set to
test waters over the online medium, by selling products through websites.

Food and grocery stores comprises the largest chunk of the Indian retail
An emerging trend in this segment is the virtual formats where customer
orders are taken online through web portals which are delivered at the
door step the very same day or the following day. This trend has been
catching up with most of the large sized retail chains that have their
Market Size
The Boston Consulting Group and Retailers Association of India published a
report titled, Retail 2020: Retrospect, Reinvent, Rewrite, highlighting that
Indias retail market is expected to nearly double to US$ 1 trillion by 2020
from US$ 600 billion in 2015, driven by income growth, urbanization and
attitudinal shifts. The report adds that while the overall retail market is
expected to grow at 12 per cent per annum, modern trade would expand
twice as fast at 20 per cent per annum and traditional trade at 10 per
Retail spending in the top seven Indian cities amounted to Rs 3.58 trillion
(US$ 53.7 billion), with organized retail penetration at 19 per cent as of
2014. Online retail is expected to be at par with the physical stores in the
next five years.
Indias direct selling industry increased 6.5 per cent in FY2014-15 to Rs
7,958 crore (US$ 1.19 billion) and is expected to reach a size of Rs 23,654
crore (US$ 3.55 billion) by FY2019-20, as per a joint report by India Direct
Selling Association (IDSA) and PHD.
Investment Scenario
The Indian retail industry in the single-brand segment has received Foreign
Direct Investment (FDI) equity inflows totaling US$ 344.9 million during
April 2000September 2015, according to the Department of Industrial
Policies and Promotion (DIPP).
With the rising need for consumer goods in different sectors including
consumer electronics and home appliances, many companies have
invested in the Indian retail space in the past few months.

Amazon India expanded its logistics footprint three times to more

than 2,100 cities and towns in 2015, as invested more
than US$ 700 million in its India operations since July 2014.
Adidas AG, reknowned for its Adidas and Reebok sports brands, has
become the first foreign sports company to get government
approval to open 100 per cent foreign-owned stores in India.
Walmart India plans to add 50 more cash-and-carry stores in India
over the next four to five years.
Aeropostale, an American teen fashion retailer, has chosen to enter
India over China, and expects India to be among its top three
markets over the next four years with revenue target of Rs 500 crore
(US$ 75 million).

Opinio, a hyperlocal delivery start-up, has raised US$ 7 million in a

Series-A funding from Gurgaon-based e-commerce fulfilment service
firm Delhivery along with investment from Sands Capital and Accel
Textile major Arvind Limited has announced a partnership with
Sephora, owned by LVMH Moet Hennessy Louis Vuitton, a French
luxury conglomerate, in order to enter into the beauty and cosmetics
Mobile wallet company MobiKwik has partnered with to
provide mobile payment services to Jabongs customers.
DataWind partnered with HomeShop18 to expand its retail footprint
in the country. Under the partnership, HomeShop18 and DataWind
would jointly launch special sales programmes across broadcast,
mobile and internet media to provide greater access to the latters
tablet range.
FashionAndYou has opened three distribution hubs in Surat, Mumbai
and Bengaluru to accelerate deliveries.
Abu Dhabi-based Lulu Group plans to invest Rs 2,500 crore (US$ 375
million) in a fruit and vegetable processing unit, an integrated meat
processing unit, and a modern shopping mall in Hyderabad,
Aditya Birla Retail, a part of the US$ 40 billion Aditya Birla Group and
the fourth-largest supermarket retailer in the country, acquired Total
hypermarkets owned by Jubilant Retail.
With an aim to strengthen its advertising segment, Flipkart acquired
mobile ad network AdiQuity, which has a history of mobile
innovations and valuable experience in the ad space.
US-based Pizza chain Sbarro plans an almost threefold increase in its
store count from the current 17 to 50 over the next two years
through multiple business models.
Government Initiatives
The Government of India has taken various initiatives to improve the retail
industry in India.

The Ministry of Urban Development has come out with a Smart

National Common Mobility Card (NCMC) model to enable seamless
travel by metros and other transport systems across the country, as
well as retail purchases.
IKEA, the worlds largest furniture retailer, bought its first piece of
land in India in Hyderabad, the joint capital of Telangana and Andhra
Pradesh, for building a retail store. IKEAs retail outlets have a
standard design and each location entails an investment of around
Rs 500600 crore (US$ 7590 million).
The Government of India has accepted the changes proposed by
Rajya Sabha select committee to the bill introducing Goods and
Services Tax (GST). Implementation of GST is expected to enable
easier movement of goods across the country, thereby improving
retail operations for pan-India retailers.
The Government has approved a proposal to scrap the distinctions
among different types of overseas investments by shifting to a

single composite limit, which means portfolio investment up to 49

per cent will not require government approval nor will it have to
comply with sectoral conditions as long as it does not result in a
transfer of ownership and/or control of Indian entities to foreigners.
As a result, foreign investments are expected to be increase,
especially in the attractive retail sector.
The Road Ahead
According to panel members at the seventh Food and Grocery Forum
India, the opportunities in food and grocery retail in India are immense,
given that it constitutes about 69 per cent of Indias total retail market.
The Indian retail market, currently estimated at $490 billion, is project to
grow at a compounded annual growth rate of 6 per cent to reach $865
billion by 2023. Modern retail with a penetration of only 5% is expected to
grow about six times from the current 27 billion USD to 220 billion USD,
across all categories and segments.
Organised Retail is emerging as the new phenomenon in India and despite
the slump, the market is growing exponentially. As economic growth brings
more of Indias people into the consuming classes and organized retail
lures more and more existing shoppers, by 2015, more than 300 million
shoppers are likely to patronize organized retail chains.
Consumer markets in emerging market economies like India are growing
rapidly owing to robust economic growth. India's modern consumption
level is set to double within five years to US$ 1.5 trillion from the present
level of US$ 750 billion.
The growing middle class is an important factor contributing to the growth
of retail in India. By 2030, it is estimated that 91 million households will be
middle class, up from 21 million today. Also by 2030, 570 million people
are expected to live in cities, nearly twice the population of the United
States today.
Thus, with tremendous potential and huge population, India is set for high
growth in consumer expenditure. With India's large young population and
high domestic consumption, the macro trends for the sector look



Rewards and recognitions are fine; but they
should be focused on showing people that we
truly appreciate their efforts .
In a competitive market, more business owners are looking at development in quality
while reducing costs. This system deals with the assessment of job values, the plan and
management of pay arrangement, performance management; pay for performance,
competence or skill, the provision of employee benefits and pensions. Importantly, reward
and recognition system is also concerned with the development of appropriate managerial
cultures, foundation core values and increasing the motivation and commitment of
employees. Reward system processes cover both financial and non -financial rewards.

Employee Reward and Recognition Systems

In a competitive business climate, more business owners are looking at improvements
in quality while reducing costs . Meanwhile, a strong economy has resulted in a tight job
market. So while l businesses need to get more from their employees, their employee s are
looking for more out of them. Employee reward and recognition programs are one method of
motivating employees to change work habits and key behaviors to benefit a business .

Reward vs. Recognition

As in industry, they have created a semantic conundrum for all employees.
Normally people interchange the usage of rewards and recognition as if
they were identical twins. Ironically, in order to understand them both and
to use each better, people must decouple them and tease out their
differences and learn the benefits that each brings to the table. Here are
some 10 differences listed below between regards and recognition.
1. Rewards are tangible. Recognition is intangible. Whether tangible or monetary,









rewards are always something you can touch and of a specific amount. Recognition is
often invisible in nature and yet priceless in value. You can give recognition without
giving a reward. You should never give a reward without giving recognition.
Rewards will always be transactional. Recognition should always be
relational. Rewards are always if you do X then youll get Y in return.
Recognition is so much more of a relational exchange between people. Rewards are
great for attracting people to an organization, and recognition is perfect for keeping
Rewards are simply consumed. Recognition is mostly experienced. When you
receive money or a gift it is usually spent, used up or somehow consumed until it ends.
In contrast, recognition is a total immersion experience and a personal encounter of
the best kind which can last forever. Carefully using both will help address the unique
differences within all of us.
Rewards are transferable. Recognition is non-transferable. Rewards can be passed
off from one person to another and are temporary in nature. Recognition cannot be
removed from the person given to or exchanged and is quite permanent. Focus on
achieving that kind of permanence through recognition while using the momentary
impact possible through a tangible reward.
Rewards are transferable. Recognition is non-transferable. Rewards can be passed
off from one person to another and are temporary in nature. Recognition cannot be
removed from the person given to or exchanged and is quite permanent. Focus on
achieving that kind of permanence through recognition while using the momentary
impact possible through a tangible reward.
Rewards are expected. Recognition is a surprise. It seems that, with rewards, we go
into a situation knowing that if we perform well we deserve the reward. With
recognition, on the other hand, you have no idea until you unexpectedly receive it.
Never let anyone down by not giving them a merited reward and learn to be
spontaneous with appreciating and celebrating people every day.
Rewards are economical. Recognition is emotional. Rewards are a prudent use of
resources in the whole economy of production, distribution and income. Recognition
contrasts as a psychological and emotional event, a felt phenomenon. Remember that
performance may reign but feelings rule!
Rewards are outcome driven. Recognition is focused on behaviors. Rewards are
used to reinforce the occurrence of achieved results. Recognition can happen anytime
someone notices positive behaviors of another. People want to know how they are
doing before the end result is achieved.
Rewards are fixed. Recognition is flowing. Rewards are fixed and determined based
on desired performance and the expected returns. Recognition is free flowing from
one person to another and expanded upon as shared by others. Know when each has
their place and use each one wisely.

10. Rewards are impersonal. Recognition is personal. Rewards have little human

dimension based on their tangible, contractual arrangement, even when given to

someone. Recognition differs because its purely human connection celebrating people
for who they are and what they do. This is where the giving of rewards can be made
much more personable by giving recognition too.

Important Factors in a Recognition Program

1. The recognition program does not exclude any employee.
2. The employees know exactly what should be accomplished in order to earn
recognition and rewards .
3. The manager's success is tied to employee's success.

Any organizational reward system has objectives:
1. To motivate employees to perform to the fullest extent of their capabilities.
2. To encourage employees to follow workplace rules and undertake special behaviors
beneficial to the organizations.
3. To instantly and innovatively recognise and reward employees for exemplary
individual and team behaviour .

Program Purposes
1. Recognize individuals and teams in a timely and effective way .
2. Provide a continuum of opportunities to acknowledge and recognize members of the
3. Recognize that each individual can make a difference .
4. Be a fair and flexible practice that is woven into the fabric of the org culture .

Impact of Recognition Program



Improve attitudes
Build loyalty &
Assures efficiency


recognition needs
Creates positive

Provides a wide
selection of

excitement and
Involves all
Develops a
partnership with
the workforce



Types of Rewards

Membership and seniority based rewards

Job status based rewards
Competency based rewards
Performance based rewards
Organisational rewards
Stock Option
Profit Sharing
Team Rewards
Gain Sharing
Special Bonuses
Individual Rewards
Merit Pay

Types of Recognition

Recognition events such as banquets or

Employee of the month or year recognition,
An annual report or yearbook which features
the accomplishments of employees
Department or company recognition
boards .
Informal or spontaneous recognition
Additional support or empowering the
employee Symbolic recognition
Latter of expressions (thanks ...)


Following are the common methods of rewards and recognition that can be found in
modern business organizations . Although not all these reward methods are used by the same
company, the companies can adopt the best reward methods that suit the company culture and
other company goals.
As an example, some companies do like to give all the benefits to the employees as
financials, while other companies like giving the employees the other benefits such as
insurance, better working environment, etc.

1. Basic Pay

Pay is an essential factor, which is closely related to job sat isfaction and motivation.
Although pay may not be a reward as this is a static amount, which an employee will be paid
every month, it will be considered as a reward if similar work is paid less.

2. Additional Hour's Rewards

This is similar to that of overtim e . However, it is paid to employees if they put in an
extra hour of work for working at unsocial hours or for working long hours on top of
overtime hours .

3. Commission
Many organizations pay commission to sales staff based on the sales that they have
generated. The commission is based on the number of successful sales and the total business
revenue that they have made . This is a popular method of incentive.

4. Bonuses
Bonuses will be paid to employees, who meet their targets and objectives. This is aimed
at employees to improve their performance and to work harder .

5. Performance Related Pay

This is typically paid to employees, who have met or exceeded their targets and objectives
. This method of reward can be measured at either team or department level .

6. Profits Related Pay

Profits related pay is associated with if an organization is incurring a profit situation. If
the organization is getting more than the expected profits, then employees receive an
additional amount of money that has been defined as a variable component of the salary.

7. Payment by Results
This is very similar to that of profit related pay. This reward is based on the number of
sales and total revenue generated by the organization.

8. Piece Rate Reward

Piece rate reward is directly related to output. The employees get paid on the number of
'pieces' that they have produced. These pieces will be closely inspected to make sure that
quality standards are being met.

9. Recognition
Employees will not always be motivated by monetary value alone. They do require
recognition to be motivated and to perform well in their work.
10. Job Enrichment
This is a common type of recognition that is aimed at employees to get motivated. Job
enrichment allows more challenging tasks to be included in the day-to-day tasks performed
by the employee.
Working the same way every day may prove to be monotonous to the employees. Therefore,
there will be a lack of interest and the performance drops.

11. Job Rotation

Unlike job enrichment, job rotation refers to shifting employees between different
functions . This will give them more experience and a sense of achievement.

12. Teamwork
Teamwork is also considered as recognition. Creating teamwork between team members
will improve performance at work . Social relationships at work are essential for any
organization. Healthy social relationships are considered as recognition to the employees.
This improves their morale and performance.

13. Empowerment
Empowerment refers to when employees are given authority to make certain
decisions.This decision making authority is restricted only to the day -to-day tasks.Though,
by giving employees authority and power can lead to wrong decisions to be made which will
cost the company . So, Empowerment will not relate to day-to-day functioning authority .

14. Training
Many organizations place a greater emphasis on training. This is considered as
recognition for employees. Training could vary from on the job training to personal
development training. Training workshops such as train the trainer or how to become a
manager will give employees a chance to switch job roles and this will increase their
motivation levels.

15. Awards
This again is an important type of recognition that is given to employees, who perform
better. Organizations have introduced award systems s uch as best performer of the month,
etc., and all these will lead employees to perform better.

To find out and analyze various basic rewards and recognition strategies used in Retail sector.
To help in increasing retention rate by providing action plan with the help of analysis.

Research design:In this project I have basically used descriptive research design and graphs / tables.

Method of data collection:I have used both kind of data Primary data and Secondary data. The method and mode used
for collecting these data are explained below.

Primary Data: Primary Data collected by direct interaction with HR of the various retail industries and
employees of the same.

Secondary Data:

Company Profile
Previous years reports


The research instrument used for collecting the data is Qualitative as well as quantitative.

The Questionnaire is prepared in an organized and thorough manner and reframed
accordingly after considering all the required aspects of the company's rewards and
recognition program.

STATISTICAL TOOLS USED FO ANALYSIS:After data collection, statistical tools are used for analyzing the data and results are obtained.
From which obtain results, findings and suggestions can be done. The statistical tools used in
this project for analysis are

Cluster Analysis
Simple percentage analysis