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 Click value proposition, and source and develop employeeto edit Master subtitle style 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!

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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--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 thats far more

inclusive and socially conscious than its individualistic predecessor

Its 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 From the image of its leader, to the many stories that surround the

this perception, its differentiator is clearly its ethical, caring reputation

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 its 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
Its 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 differentness

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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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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. Click to edit Master subtitle style - McKinsey & Co.

managing retention

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Different strokes for different folks

A T T R Mitigate : I Retention / T Recruitment I Policies O N

PERFORMAN CE

Solid PROs Invest & Encourage

1.

Welcome Attrition

E D U C A T E

Star Employees : Convert to Power Change Agents

ED UC AT E

Invest to classify
1. Can be Changed 2. Cant be changed Welcome Attrition CHANGE

Change

POTENTIAL

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Retention needs managing internal forces

Minim ise

Maxim ise

Source: TCS study

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An employee value proposition is a carefully configured mix of multiple factors

Cultural factors

Transformational factors

Transactio nal factors

Source: TCS

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Performance Assessment What does it do conventionally

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 2727

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

Expectations Competence Attitude Potential / Creativity Performance

Process

Business Processes Employee Processes Customer Service Vendor Management

Technology

Communication Manufacturing Transportation Others

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Performance Assessment Objectives

Assessing Impact of Change in the Organisation

People Process Technology

Planning work and setting Goals & Targets

Drill Down Expectations Drill Down Goals & Targets

C ontinuously Monitoring performance

Measuring Competence, Performance Ongoing Feedback

Developing capabilities & competence of people to perform

Education Training Job Enrichment

C ontinuously Assessing / Rating performance

Assess Record Feedback

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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

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

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Performance Assessment applies not only to Employees

Simultaneously focuses on

Organisation Department [ Sales, Manufacturing, HR ] Teams or Work Groups to accomplish a result Projects [ Setting up a new plant ] Products or Services to external & internal Customers Programs [ implementing a new incentive plan ] Processes [ Budgeting, Product development ] 3333

Eight Steps of the Performance Assessment Process

STEP 1 STEP 2 Study the Organisation / SBUs Business Plan, Goals & Objectives Determine Units Accomplishments using any or all following Methods
Goal Cascading Cascade the SBUs goal s to the Unit / Branch Customer-Focused Determine product(s) & service(s) the Unit/Branch provides to its customers Work Flow Chart Develop a work flow establishing key/critical steps in work process

STEP 3 Determine individual Accomplishments that support work Units Goals Chart each job position or member of the unit and against each list expected accomplishments that the job/member must achieve to support the Unit s goal STEP 4 Convert expected Accomplishments into Performance Elements indicating priority Some critical to achievement of Goals & others elemental STEP 5 Determine measures/criteria of Performance
- For each performance element, determine general measures [ quantity / quality /timeliness / cost etc ] & unit of measurement. For non-quantifiable accomplishments determine observed & verified factors

STEP 6

Develop Standards of Assessment/Evaluation Setup standards for each performance element corresponding to rating standards, in numerical terms. If not possible, define what the appraiser would observe & report against each rating standard (OS to Poor) STEP 7 Determine how to Monitor Performance Determine what supporting data would be collected, from where, how and in what frequency. STEP 8 Give periodic feedback to Employees 3434 Specially in critical areas

Setting Goals the SMART WAY

Set SMART Goals

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

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 3535 Share your goal with people who are important to you

Methods & Tools Of Evaluation

PRINCIPLES

View evaluation of performance & potential as a valuable management 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

Annual Performance Appraisal - Pre-confirmation Assessment One-to-One Review Discussion - On the Job Observation/Assessment Skill or Job-related Tests - Review of specific Assignment/Project B alance Score C ard - 360 Degree Assessment 3636 Assessment C entres (group exercises, psychometric tests, presentations etc)

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 organisations vision & strategy into a comprehensive set of performance and action measures towards achieving strategic objectives Perspective Financial Customer Internal Employee EVA, ROI Perception, Satisfaction, Retention, Market, Response time Quality, Quantity, Cost, New Products/Services Satisfaction, Growth & Learning Measures

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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:

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 dialogue

Supports internal communication through on-going feedback & 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

Newtons 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
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Creates the Motion Generates Acceleration Sets the Direction Validates Processes

2.

3.

4.

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Challenges Of Performance Assessment

Believe that PA is NOT HRs 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

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