I think Adil and James have said it all. Pay Hikes have NOT rewards, they are not even a way to say thank you. Its about saying ...Dear Employee, you are valuable to our organisation upto this value... To be more valuable you will have to work more harder and be rewarded for any out-of-the-way work that you do.
Promotions on the other hand are about the future role of the employee using his performance stats diring the last few years/months. In todays companies, agile deliveries & 90 day cycles make it necessary that employees keep changing their roles. Therefore it is important to have quaterly performance analysis on an employee and promotions not based on yearly performance.
The over all gist is that this brings satisfaction to the employee that he will need to move on to newer work get a promotion and not get stagnated. As well as get pay rises with no relation to Promotions. Promotions and Pay Hikes are related to performance and vise versa, but they are definitely not related to each other.
Defenitely both are nice and soothing.. As Mr. Pradhan puts it Promotion gives you prestige outside the official soceity also, where as salary hike is something that is known to you alone.
I believe 2 year is a good period to ivaluate an employee and he/she deserves a promotion if the performance levels are achieved. Its a very comlicated situtaion these days for most of the MNC's. There are a bunch of massive performers around and at the end of all the management is confused with whom to promote and whom not to. So few gets lucky with promotions and other gets settled for a heavy pay rise.
The one I liked most is the view of James Abraham from BCG. I agree with him that it is not a reward but the path of both the org and the person for growth.
The was to look at it is upwards from bottom. Only if the bottom most people grow to the next level we will have people under them and this happens to every level upwards and finally the organization grows.
It is more a growth path than a reward. Ofcourse, pay hike may sometimes be a reward of some stellar performance or market correction.
More often, rewards for stellar performances could be onetime bonuses or holiday packages and that offers immediate recognition of the hardwork and may motivate for more such things.
Consisten such things coupled with career management initiatives may result in pay hikes, then promotions so on and so forth.
However, I would say excellent perspectives... Kudos to rediff for bringing on such thing..
