Do you think the 80/20 rule exists? How can you ensure that the people who work more than others are rewarded for their exceptional input?

Dear Sidrah, Let me help you re-phrase a bit of your question. It is not about "how much employees work" it is ultimately about "what results each of them have produced". You may find many people who work very hard, long hours but dont produce the desired results, and many smart people who are able to juggle their time well, prioritise, retain focus on the key deliverables, and they manage to produce better results. Now, coming back to the80-20 rule... I do feel that some variant of this exists in general. In many years of handling the PMS of best of organizations, I did find that roughly20% of employees do exceed the targets they pursue. If we do not reward them suitably, these are the guys we will lose. The mediocre people will stay back with us anyway. These best people have the best of talent, knowledge and ability to sell their skills in the market. What does PMS do - this process helps us distinguish the best among the lot, and this result is achieved only when the overall PMS process is well set out, and monitored. This means - it is important that all employees are set their targets (with mutual discussion of course) at the beginning of the year. Not only setting targets, they have to be measurable, feasible, and clear. Then feedback needs to given to them objectively several times during the year informally, and give them a formal feedback at the end of the first half of the year, and then most importantly, the line managers - when they sit down to do a formal appraisal - need to be clinical and objective. They should set their personal likes and dislikes apart, and simply go with the results each employee has produced. This is possible only when the whole process is set right - right from the beginning. If done well, this will clearly set out the difference between those20% who were exceptional and those who were not. Now it is upto the top management - those who decide the quantum of rewards - to ensure that this20% is taken care of nicely. The bell curve is one of the popular methods that helps you do this differentiation.

Dear Sidrah - In addition to what Mr. Krishnamurthy has stated and he had a helpful thought, this rule exist in somehow; if it is not80/20, it could be75/25 or70/30... However the point is to consider that things are not even or equal in any organization or any situation.

About how to make sure that people are rewarded fairly, managers should determine the headlines of outcomes and efforts in order to reward employees.Based on efforts or based on outcomes!! and for fairly awarding following up is very important; Direct supervision and assessment are  needed. Rewarding cannot be done based on assumption !