Introduction

The relationship between employers and employees has significantly changed in the last few years. Employers are now more tuned to listening to their employees to maintain continuity and retain their talent. On the other hand, employees have been able to identify a set of priorities according to their needs and are looking for a conducive work environment and healthy work culture to flourish and enhance their growth.

According to a study by McKinsey [1], employees primarily associated job satisfaction with factors like being valued by an organization, being appreciated by a manager, having caring and trusting teammates, the potential for advancement, and having a flexible work schedule. In comparison, factors like a poor response to the COVID-19 pandemic, failure to recognize employee performance, job insecurity, and reorganization prompted them to look for another role within the firm or quit their current job. For instance, there were expected to be more than a million resignations in India in 2021. [2]

The whole employee lifecycle has witnessed a tectonic shift where an individual is now motivated by challenges, scale, benefits, peer group, work environment, and work-life balance. An astronomical compensation is not enough to hire the top talent and, more importantly, retain them.

In the current scenario, any organization must be able to retain its talent to sustain its growth. At ShareChat, we firmly believe that our associates must continue to learn & grow. Providing the right opportunities and enabling a conducive work environment are of utmost importance to us.

The cycle of growth

At ShareChat, we are rooting for every associate to continue their growth. We are committed to ensuring our employees have multiple avenues to scale up their learning and career growth.

Once the employee becomes part of the organization, the first step is to ensure they can connect, socialize and have a thorough understanding of their roles & responsibilities. We understand every individual has different requirements, and one method will not work for all. The second step is known as the learning and development phase. We empower the stakeholders - their current manager, and the leaders of other functions they collaborate with - to identify and implement correct learning modules to help the associate grow.

Once the opening two phases are complete, our associates are provided with continuous feedback to aid their growth. The third step in the process is performance evaluation, where we not only set clear expectations but set out a balance between outcome and skill. Once the associate meets the set expectations, they are promoted to the next level. And the same cycle is then run again.

At ShareChat, we want to identify top performers and aid them with the growth path to take their game to the next level. It not only helps the associate but also acts as a factor that pushes other employees to seek success. Peer success is a vital tool that helps individuals scale up their capabilities. Thus, it required us to upgrade our performance management system to meet changing market & talent needs.

How we revamped our Performance Management System

At ShareChat, we believe it is crucial to scrutinize and improve the performance evaluation methods to help our teams to achieve better results. We aim to build a differentiated compensation and rewards strategy using cash and equity, and the first step was to ensure a more robust performance evaluation model.
We conducted a comprehensive diagnosis of the performance management process. It allowed us to identify and run a benchmark comparison of about 40 parameters. In addition, we conducted 20 external interviews that helped us figure out key differences and, more importantly, identify areas to improve.

The exercise led us to implement several changes as we moved towards functional competency-based assessment from org-value-based assessment. There are several benefits of adopting this model. It improves clarity and provides a clear picture of the strengths and weaknesses of the associate. It also makes developing personalized growth plans much easier.

"Competency-based PMS sets clear performance expectations for employees, enabling them to make better decisions and work more effectively. It ensures a high degree of fairness in the assessment process," said Mitalee Dabral, Vice-President - Human Resources at ShareChat. "The competencies identified for a role can also be used throughout the entire talent lifecycle e.g. in recruitment, onboarding, training, and succession planning. This approach provides transparency, consistency and the insight managers need to lead more effectively."

For performance reviews and appraisals, we included stakeholder feedback in addition to manager feedback. This move was done to make the feedback process more holistic and effective. This model allows a more rounded interpretation of the performance and helps prevent bias. To maintain transparency, the employees at ShareChat can also see their ratings. Additionally, feedback and appraisal discussions are now two separate exercises.

To reward our top performers with a more significant share, we implemented a differentiated rewards structure and replaced the flat bonus structure that was already in place.

A recap of key shifts we made at ShareChat

• Differentiated bonus structure in place of flat bonus structure
• Mandatory and continuous manager-associate check-in
• Visibility of ratings for associates
• Functional competency-based evaluation
• Relative ranking instead of absolute ranking
• Stakeholder feedback in addition to manager feedback
  

ESOPs - A win-win tool to grow!

Each high-performing associate deserves recognition for their efforts. To ensure the top performers are rewarded fairly, we accord them higher performance payouts, a merit-based appraisal, and ESOP grants for performance and promotion.

The main differentiator in our rewards program is Equity. When stock options are given, it helps develop a sense of ownership among employees and hence pushes them to generate more impact. Additionally, we want to ensure ESOP isn’t just paper money and is an effective tool for every associate to create wealth.
The figure below shows that ShareChat has delivered consistent growth, and its share price has risen 65x from June 2017 to September 2021.

“The philosophy behind giving ESOPs is that you become a partner in the success of the company,” said Manohar Singh Charan, the Chief Financial Officer at ShareChat. “You contribute your efforts, the company achieves greater heights because of your efforts, and we want you to have a share of the upside you helped create. Those who create outsized impacts are rewarded disproportionately.

“If you look at it, there will be parities in salaries, but ESOPs will not have that. If you perform well, there are performance-linked ESOPs. When you get bumped up, there are additional ESOPs.

“ESOP is a mix of your contribution, at what stage you took risk, and the impact you brought to the company’s success. The idea is to tightly connect your fortunes to that of the Company.”

ESOP Philosophy

Different individuals bring in different personalities and strengths to the organization. We implemented relative ranking in place of absolute ranking to develop a fair chance of succeeding for every associate.

We are striving to build a truly differentiated program. “Our aim is to have the most employee friendly ESOP policy. The stocks vest every quarter and you can exercise this for a price of INR 1. No matter what the company's stock price is, it'll never be INR 1, you'll end up making money,” said Manohar.

“We also don't put any restriction on the exercising process. A lot of startups say that once you leave the organization, then you have to exercise the stocks within ‘x’ months or it'll lapse. At ShareChat, once the option has vested, it'll remain with you forever. When employees leave the employer, they are not taking away their past contributions to the employer’s success, so why should the employer then have a right to take back rewards that were given to employees in the past.

“To add a different perspective, the salary is almost directly proportional to the grade. There may be 50 people in one grade and their salary is going to be more or less in the same band. But, as an individual performer, if the associate brings in a lot more value, and makes a real difference in the chances of the company's success, ESOP is a real tool that makes a real difference in creating wealth.”

Conclusion

At ShareChat, we are always seeking first principle problem solvers who have also demonstrated a strong execution drive. Such associates are the pillars of growth, and it is crucial to retain them for sustained success. We want to continuously reward our associates who consistently display a high level of competency and create an impact at scale.

With a well-rounded performance management system, we ensure our associates have the right opportunities, are rewarded in a competitive spirit, and build ownership to grow together.

References
[1] Winning back your workers
[2] Despite bonuses and salary hikes, India's IT sector will see over a million resignations this year

We are hiring!

At ShareChat, we believe in keeping our Bharat users entertained in their language of preference. We are revolutionizing how India consumes content and the best in class technology is at the forefront of this transformation. In addition, you'll also get the opportunity to work on some of the most complex problems at scale while creating an impact on the broader content creation ecosystem.

Exciting? You can check out various open roles here!