PERFORMANCE ASSESSMENT
Sunirmal Sen
HCL Technologies
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Managing talent
and developing an
employee value proposition
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The war for talent is on.
Companies must therefore make talent management a top
priority - create and continuously refine their employee
value proposition, and source and develop
talent systematically.
- McKinsey & Co.
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Big-ticket salaries, stock options and perks like
concierge services, flexible schedules,
sabbaticals, mortgage payments, even an
interesting career
path and a fun environment…
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…are no longer good enough
for young people!
Source: Stanford Business School Magazine
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So, what makes employees tick,
and how to develop an
employee value proposition?
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Few Challenges…….
• The changing workplace
• The ethical dimension
• Creating a retentive organisation
• An understanding of employee behaviour
– What do they seek?
– What makes them stick? What makes them leave?
• Developing an employee value proposition
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The changing workplace and the need for
newer communities
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Some beginnings…
• Infosys has a rock band that plays at their amphitheatre
and at outside concerts
• Organisations have started initiatives like
– Film clubs that hold screenings every month,
– Knowledge sharing forums
– Job referral programmes such Frito Lays’ ‘Bring a Friend to
Work’
– Blogs
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The implication…
• The firm of the future has an opportunity to be the nexus of
communities of practice that attract the best human capital,
and to create an environment in which they build superior
knowledge assets
• This can give it a competitive edge vis-à-vis the talent
market, both internal and external
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A post-Enron world and the importance of
being good
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Ethical is sexy
• The fall of Enron, WorldCom, Arthur Andersen and travails of others like
the Interpublic Group, has brought the issue of ethics in business to the
fore
• In a Stanford-conducted survey of 800 MBAs from 11 leading business
schools in the US and Europe, ethics figured third most important
criteria for the choice of an employer, after intellectual challenge and
financial package
• As many as 97% respondents were willing to take an average cut of
14% in compensation, to work for a company with a good reputation for
ethics and CSR
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‘WeGen’ is the new GenNext
• A recent Newsweek study has shown that
the youth across Asia is increasingly
motivated by a desire to make a difference
rather than just make money
• It talks about a generation that’s far more
inclusive and socially conscious than its
individualistic predecessor
• It’s a marked change from the
‘I-Me-Myself’ image of youth commonly
stereotyped in media
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Creating a powerful ethics-driven corporate
brand
• Infosys has consistently been rated as one of the most respected
companies and sought-after employer
• While its rapid growth and stellar performance is part of the reason for this
perception, its differentiator is clearly its ethical, caring reputation
• From the image of its leader, to the many stories that surround the
company (e.g. how the income tax officials accept tax returns from the
company without even checking them) contributes to this image
• Tatas or Wipro also enjoy an ethical image, but it’s Infosys that scores a
top-of-mind association on this parameter
• The learning is clear – it is not just sufficient being principled; one must be
seen to be principled by the concerned publics
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The implication…
• It’s clear that for a company to be attractive to potential
employees, as also for it to give a sense of pride to its
existing employees, it has to have ethics at its core
• It is not just about compliance, but issues such as a concern
for its stakeholders, commitment to environment
sustainability, making of products and services that are
ethically sound
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Understanding
Loyalty Vs. Attrition
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What does young talent seek?
• The new age workforce mostly comprises knowledge
workers, who are techno-savvy, aware of market realities,
are materially focussed and have higher propensity to
switch jobs
• They prefer to experiment and explore new opportunities,
are high risk takers with high aspirations and expectations
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What does young talent seek?
• “I want to work only with start ups with a good business
model”
• “In deciding whether to join this company, I used the late-
night office test - did I want to be working with these guys
at the office at 11 at night?"
• “I want a job with real impact”
• “I like it here because they appreciate my different-ness”
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What makes employees stay?
• The company’s brand image
• Compensation package
• Role and position
• Quality of colleagues
• Scope for growth and professional development
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What makes them leave?
• Anxieties and apprehensions arising from
– Restructuring, movements, change of boss, change of tasks
and responsibilities
– Marginalisation, power politics
– Mergers and acquisitions
• Better opportunities outside
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What makes them leave?
• Although most people tell HR they are leaving for more
money or a better opportunity, 88% change jobs because of
negative factors in their current workplace, ranging from
sub-par people management to toxic culture
Source: McKinsey & Co.
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managing retention
If
in the past was akin to
tending a dam, today it is more like managing a river. The object is
not to stop water from flowing but to control its direction and
speed.
- McKinsey & Co.
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1. Solid PROs
Invest & Encourage
EDUCATE
Star Employees :
Convert to
Power
Change Agents
Invest to classify
A
T
T
Mitigate
:
R
Retention
/
I
Recruitment
T
Policies
I
O
N
EDUCATE
Welcome
Attrition
PERFORMANCE
Different strokes for different folks
1. Can be Changed
Change
2. Can’t be changed
CHANGE
POTENTIAL
Welcome
Attrition
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Retention needs managing
internal forces
Minimise
Maximise
Source: TCS study
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An employee value proposition is a carefully
configured mix of multiple factors
Cultural
factors
Transformational
factors
Transactional
factors
Source: TCS
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Performance Assessment –
What does it do conventionally
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Assessing Performance / Potential
Determination of Bonus / Merit Payments
Promotion decisions
Setting work Objectives
Transfer Decisions
Feedback on Performance & Self Development
Workforce Succession / Career Planning
Identification of Training Needs
Legal purposes
Review / update job description
Validation of HR Practices
Communication of Organisation Objectives and / or Values
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Performance Assessment –
What should it do
• Any Change in Nature increases ENTROPY
• Antidote to ENTROPY
• Arrest disorderly behaviour
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Performance Assessment –
What should it do
To ensure seamless integration between
• People
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Expectations
Competence
Attitude
Potential / Creativity
Performance
• Process
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Business Processes
Employee Processes
Customer Service
Vendor Management
• Technology
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Communication
Manufacturing
Transportation
Others
In order to meet Organisation Vision, Mission & Objectives
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Performance Assessment – Objectives
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Assessing Impact of Change in the Organisation
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Planning work and setting Goals & Targets
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Continuously Monitoring performance
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Developing capabilities & competence of people to perform
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Continuously Assessing / Rating performance
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Recognising & Rewarding good performance
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Pruning
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People
Process
Technology
Drill Down Expectations
Drill Down Goals & Targets
Measuring Competence, Performance
Ongoing Feedback
Education
Training
Job Enrichment
Assess
Record
Feedback
Star Performers
Recognition
Dead Woods
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Performance Assessment – Objectives
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Performance Assessment is not Annual
Appraisal Alone
The process of creating & sustaining a work environment in which people are enabled
to perform to their fullest potential. Performance Appraisal is only a part of it.
INCLUDES
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Developing precise role / responsibility expectation for the position
Selecting the right people with appropriate skills & competencies
Negotiating accomplishments-based performance standards, outcomes and
measures
Providing effective orientation about company, products, processes & customers
Providing on-going coaching and feedback
Identifying developmental needs & extending appropriate education & training
Conducting performance & potential assessment
Rewarding contribution of people through appropriate compensation & recognition
Enhancing career development opportunities
In the era of knowledge work and knowledge worker, where work is information
based and working is a mental activity, the task of management is to enable and
elicit employee contribution of value to the organisation. To continue with a system
designed to extract and enforce compliance is a folly.
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Performance Assessment applies not only to
Employees
Simultaneously focuses on
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Organisation
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Department [ Sales, Manufacturing, HR ]
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Teams or Work Groups to accomplish a result
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Projects [ Setting up a new plant ]
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Products or Services to external & internal Customers
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Programs [ implementing a new incentive plan ]
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Processes [ Budgeting, Product development ]
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Setting Goals the SMART WAY
Set SMART Goals
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S – Specific. Also Stretch, systematic, synergistic,significant & solid
M – Measurable. Also meaningful, memorable, motivating & magical
A – Achievable. Also agreed-upon, accountable & action-oriented
R – Relevant. Also realistic, reasonable, result-oriented & rewarding
T – Time-based. Also target-oriented, tangible & thoughtful
Tips on Goal Setting
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Deeply desire your goal
Own your goal, it is yours’
Base your goals on your values
Believe you can accomplish your goal
Be committed to the achievement of your goal
Develop an action plan for achievement of your goal
Share your goal with people who are important to you
Periodically revisit your goal and realign, if necessary
Identify & eliminate obstacles in accomplishment of your goal
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Methods & Tools Of Evaluation
PRINCIPLES
• View evaluation of performance & potential as a valuable management
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tool
Ensure acceptance of the evaluation concept & process, irrespective of the
evaluation method/tool used
Evaluate what is important & relevant – Not what is easy to measure
Develop an evaluation system/method which is flexible & alive to changes
in the context & environment
Multiple methods of evaluation/assessment provides an overall &
comprehensive perspective of performance
TYPES OF ASSESSMENT
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Annual Performance Appraisal
One-to-One Review Discussion
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Skill or Job-related Tests
- Review of specific Assignment/Project
Balance Score Card
- 360 Degree Assessment
Assessment Centres (group exercises, psychometric tests, presentations etc)
Human Resource Review
Self Appraisal
- Pre-confirmation Assessment
- On the Job Observation/Assessment
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Balance Score Card
Complexity of managing business organisations today requires managers to
view & assess performance simultaneously in different perspectives
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Measurement of both process & results
Balanced Score Card is a management system that converts an organisation’s
vision & strategy into a comprehensive set of performance and action
measures towards achieving strategic objectives
Perspective
Measures
Financial
EVA, ROI
Customer
Perception, Satisfaction, Retention, Market, Response
time
Internal
Quality, Quantity, Cost, New Products/Services
Employee
Satisfaction, Growth & Learning
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Developmental Perspective Of Performance
Assessment
When the assessed / appraised performance does not meet the
desired Performance standards, Developmental Plans prepared to
address the Gaps in performance
• A Developmental Plan can be initiated to address following
situations:
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Gap in meeting the performance standards set
Gap in competencies to meet the growth aspirations of people
Gap in competencies to meet the growth plans of the organisation
Part of Succession Planning to help employees to acquire required
competencies
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Performance Assessment :
What do we achieve
• Aligns organisational activities & processes to the mission & vision
• Continuously focuses on results, rather than behaviour and
activities thus depersonalises
• Supports internal communication through on-going feedback &
dialogue
• Performance Assessment seen as on-going process , rather than
periodic snapshot event
• Provokes focus on customers, whether internal or external
• Produces specificity in commitment & resources
• Provides specificity for direction & planning
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Performance Assessment :
What do we achieve
Newton’s First Law of Motion :
“Everybody continues in its state of rest or of uniform motion in a
straight line until & unless compelled by an externally impressed force
to change that state”
Performance Assessment
1.
Creates the Motion
2.
Generates Acceleration
3.
Sets the Direction
4.
Validates Processes
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Challenges Of Performance Assessment
• Believe that PA is NOT HR’s ‘Baby’
• More & more emphasis on ‘HOW’ than ‘WHAT’
• Align the System with changing market demands
• Define unambiguous CSFs & KPIs
• Make it a Continuous Process rather than a Periodical Ritual
• Define appropriate measurement criteria to ensure elimination of
subjectivity
• Develop Action Plan based on the outcome of the Exercise
• Review & Revise the Process, as & when required
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