A growing number of companies are in an innovation mode to engage employees in the wallet, mind and heart.

Satyam [Get Quote] Computers Chairman B Ramalinga Raju says he has over 1,500 'CEOs' in his company. And he wants more. India's fourth largest information technology company has divided certain areas within its operations into over 1,500 small businesses with independent 'CEOs' for each of them. The company has also generated separate monthly profit and loss accounts for these units.

Satyam isn't alone. Others such as Coca Cola India call them 'intrapreneurs' -- 26-year olds managing businesses worth over

Rs 50 crore independently. The 'CEO' route is just one way Satyam and Coke are battling to hold on to their talent and ignite performance.

Satyam has also framed what it calls an 'associate delight index' -- a benchmark to figure out whether employees are happy with the working environment. A dip in the index acts as a safety valve and the management gets into action immediately. Thankfully, the index has been rising of late. That's great news for Satyam at a time when McKinsey estimates a shortfall of 500,000 IT staff across the country by 2010.

Employee engagement has also meant engaging their families. Satyam has started a global leadership programme for the children of employees. Sixty children went through the programme last year to demonstrate the power of decision-making and learn the importance of networking.

Satyam is doing what countless other companies all over the world are practising to ensure that the top performers who walk out of the door today come back tomorrow. And there is a growing realisation that talent retention measures have to go beyond just gyms and cr�ches. So, innovation is the name of the game in companies that have grown so fast that you often have 25-year olds managing 23-year olds who, in turn, are in charge of a bunch of 21-year olds. And since there is no one-size-fits-all strategy, customisation is in order.

Companies such as Fedex India gives over Rs 1 lakh per annum as education reimbursement allowance to each employee regardless of seniority. There are other perks too: the top performers get the opportunity to name one of Fedex's 500 airplanes after their children. Agilent Technologies offer 'reporting bonuses' to employees who inform the management when competing firms attempt to contact them.

The manufacturing companies are not far behind. Companies such as GE follow the mantra of "engaging employees in the wallet, mind and heart." Others have taken the cue. Marico, for example, has dispensed with mandatory attendance musters. Fixed leave has also been abandoned and senior managers have been told to take leave whenever they need to.

There are other ways too to engage employees. Realising that work-related stress is one of the major factors for attrition, Boston Consulting has come up with a great innovation: employees working more than 60 hours a week at this management consulting firm are placed in a "red zone" and advised by a career mentor. In fact, several of the top companies offer mentoring and coaching. Some, like P&G, even allow the employee to choose their own coach, someone whose experience and accomplishments match the employee's own aspirations.

Perhaps the most critical theme is the importance of trust. The happiest employees do not feel they have to punch their proverbial time-card in at the start and end of each day. Instead, they are trusted to manage their jobs as professionals. If they need to work from home, they can. If they have to leave early or arrive late, they can.

However, while the mind and heart need to be taken care of, the wallet is clearly the biggest glue for employees. And this is where variable pay becomes the single biggest motivational tool. An outstanding performer at LG, for example, can get a bonus that adds up to 1.5 years' salary. The average performer is not ignored totally as he still gets eight months' salary as bonus.

The variable pay component was just 5 per cent of the total pay just five years back. Today, the average variable part of the salary for senior management is 25 per cent. For companies such as Wipro [Get Quote], variable pay varies between 20 and 40 per cent of total pay, though it's still small compared to the average of 75 per cent in the US.

The good news is that a survey by the Great Place to Work Institute, a US labour researcher, in association with the Delhi-based Grow Talent Company, found that as many as 25 employers in India are matching or exceeding global benchmarks on good workplace practices. But the bad news is thousands still do not, including 95 large companies that failed the survey or dropped out because they could fail.