Report on Performance management system at Infosys

Report on Performance management system at Infosys Introduction to Infosys Headquartered in Bengaluru, Infosys Technologies Ltd is a software behemoth in the Indian IT industry. A multinational IT services company, Infosys operates in 33 countries and has development centers in India, China, Japan, UK, Australia and Canada. Beginning as a mere US$ 250 company in 1981, Infosys has come a long way now, to become a global frontrunner with revenues of more US$ 5.38 billion. Infosys provides end-to-end business solutions, essentially helping clients to setup software infrastructure, develop it and maintain it. Infosys uses its Global Delivery Model (GDM)as a strategic outsourcing tool. GDM enables the company to take work to the place where it can be best performed, at least cost, and with minimum risk. The work on projects is carried out 24 hours a day, with teams located at different locations across the world, working round-the-clock on the project.GDM is one of the major initiatives of Infosys. Infosys offers solutions to an assortment of industries withservices like IT, Engineering, BPO and Consulting. The organization structure is complicated. The hierarchy is headed by Mr. N R Narayana Murthy who is the chairman and chief mentor of the organization. Next isthe CEO and Managing Director Mr. Gopalakrishanan S. Following him are the directors and the senior vice presidents. The COO Director, Mr. S Shibulal heads all the Industry business units and Horizontal business units. He also heads the SETLabs and Microsoft technology centre A typical project is headed by Delivery Manager. Role Hierarchy in a Unit from Top to Bottom is Delivery Head Senior Delivery Manager Delivery Manager Project Manager Business Manager Technology Lead Technology Analyst Senior Software Engineer Software Engineer Functionally, Infosys comprises various Industry Business Units (IBUs) and Horizontal Business Units (HBUs). These are Performance Management System Performance Management is a process for establishing a mutual understanding about what is to be achieved and how it is to be achieved. PMS assists organizations to plan, analyze and manage their performance, so that decisions, resources and actions can be better aligned with business strategies to achieve required results. Performance appraisal is a systematic and objective way of evaluating both work related behaviour and potential of employees. This is carried on a periodic basis. It mainly involves setting work standards, assessing employees performance relative to these standards and then offers feedback to the employee so that he or she can work on the deficiencies and improve performance. The focus of appraisals is on employee growth and development. It provides an opportunity for the manager and his/her supervisor to set mutual objectives. Purpose of Performance Appraisal The main purposes why organizations conduct performance appraisals are Career Development This provides an opportunity for discussion of career objectives. Also it helps to Provide an opportunity for career counseling Helps in succession planning. Plan for career development Provide a basis on which to base decisions about training and promotion Feedback Encouraged in both directions, ie from manager to employee and from employee to manager Provides constructive feedback to the individual on their performance Provides a structured format for the discussion of performance issues Feedback helps in reinforces performance strengths and an opportunity to find solutions for performance deficiencies. Administrative Uses of Performance appraisal Salary Promotion Retention/termination Recognition of performance Performance History Serves as a repository of performances and can be used for various decision making purposes Can be used to review past and present performance. Documentation for HR decisions Helping to meet legal requirements Organizational Goals Makes the individual aware of organizational expectations Provides opportunity review the performance from the organizational point of view Helps in assessing future promotion prospects and potential Performance Appraisal Steps Performance appraisal process include steps as follows Establish performance standards These are benchmarks against which performance is measured. They should relate to the desired results of each job. They must be clear to both the appraiser and the appraisee. Generally, these requirements can be deduced from the work description and divided into two parts: behavioral standards and work result standards. Choose the appraising method There are numerous appraisal methods, but no method is the best for all organizations. Within an enterprise, different methods can be applied to different positions, units or departments such as sales, production, marketing or administration department. Train the Appraiser Inappropriate appraisal methods or ill-defined standards results in bias. This could lead to unwise decisions on payment and rewarding. So it is necessary for leaders and appraisers to be trained on these skills. Discussing with employees on rating content and scope The content and scope should be discussed between appraisers and employees. The Appraisee should be clear about what he is doing and why he is doing. Actual Performance and Comparison Compare, analyze the actual result of staff with set standards. As far as possible, the appraising results must objective and not on the appraisers perception. Discuss with staff on the appraising result: The appraiser should have a discussion with employees on the appraising result. They should identify agreements and disagreements on appraising methods. Also give feedback on the strengths and weakness of the employee and suggestion on improving the weaknesses. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better. Identifying new goals Arrive at new goals for achieving superior performance. But it has been observed that most of the employees hate appraisal system. The main reasons are Lack of information about the purpose of appraisal Many employees are notabout the impact that appraisals can have on their career prospects. Time consuming process The highly complex questions which they have no answers to or highly complex competencies which they have never heard of confuse them. Difficulty in writing appraisals Many employees have poor language skills and they are unable to communicate their performance in right language and support with data. Lack of faith in the appraisal process Employees think that his/her manager doesnt write appraisals based on employees performance but bias his/her decisions based on their personal relations with employees. Lack of feedback after appraisal: Many companies do not provide feedbacks to employees on their performance. Benefits of Performance Appraisal The performance appraisal system benefits the appraise, appraiser and the organization Appraisee: Increased motivation and job satisfaction. Clear understanding of what is expected and what needs to be done to meet expectations. Opportunity to discuss aspirations and any guidance, support or training needed to fulfill these aspirations. Improved working relationships with the superior. Opportunity to overcome the weaknesses by way of counseling and guidance from the superior. Increased sense of personal value as he too is involved in the appraisal process Appraiser: Opportunity to develop an overview of individual jobs. Opportunity to identify strengths and weaknesses of appraisees. Increased job satisfaction. Opportunity to link team and individual objectives with department organizational objectives. Opportunity to clarify expectations that the manager has from teams and individuals. Opportunity to re-prioritize targets. Means of forming a more productive relationship with staff based on mutual trust and understanding. Organization: Improved performance throughout the organization due to: Increased sense of cohesiveness and loyalty. Managers are better equipped to use their leadership skills and to develop their staff. Effective communication of organizations objectives and values. Improved overview of tasks performed by each member of a group. Identification of ideas for improvement. Creation and maintenance of a culture of continuous improvement. Communication to people that they are valued. Methods for improvement Making employees believe in fair evaluation of the job performance and making them actively participate in the evaluating process is a measure to improve job performance evaluation. Some of the steps that can be followed is as follows Roles of HR staffs Human resource staff should show that they are knowledgeable and interested in the work of the evaluated staff. Between supervisors and employees, there should be an agreement on the primary responsibility to perform the job. Human resource staff should coordinate with employees, asking them to participate in planning work as a basis of better assessment to exclude changes in the assessment. Training in performance appraisal Train and instruct the appraiser in the evaluation of job performance of employees. While training the real life situations should be taken in to consideration. Performance Management System of Infosys [Performagic] Infosys uses the web application Performagic to capture all the performance appraisal related activities. The appraisal is done twice a year, once in October and another in April. The cycle is initiated by the HR and the employee has to then add both appraiser and reviewer. The appraiser and reviewer for any particular employee are identified based on the projects the employee worked during the appraisal cycle. A normal appraisal process flow would look like the below diagram If the employee is not satisfied with CRR rating then the following actions can be taken. Data Capture in Performagic The employee is evaluated based on performance tasks, competency and behavioural tasks. The performance tasks are set based on the role and the project in which the employee is working. The manager has the flexibility to make necessary modifications according to his perception of the role and expectations from the employee. Competency and behavioural indicators are based on the official designation of the employee. The employee is given the option to rate any 10 options from the competency and any 5 from the behavioral tasks. There is also individual utilization measures set for each employee which has to be met by the employee to ensure a met expectations rating. The utilization measures set are broadly defined on the IBU level, but can be modified if the appraiser feels that its required. Based on the ratings give to the performance ratings and behavioural tasks the score for the employee will be calculated based on pre decided logic. The CRR for employees are decided based on this cumulative score that the employee scores. Methodology Personal interviews were conducted of few Infosys employees to evaluate their understanding and thoughts on the PMS. Questionnaire What is your role? How many time appraisal is done in a year and when? What procedure is followed in appraisal? Is there any formal training given to the appraiser? How much time do you dedicate for filling the appraisal form? On what parameters you do your self-appraisal? What are the performance standards on which appraiser appraise you? How subjective is the appraisal? Are all the questions in performagic relevant to your roles What happens in appraisal meeting? What type of feedback do you get? Who all are involved in the appraisal meeting? How does it affect your performance afterwards? What do you think are the problems in current appraisal system? How transparent is the appraisal system? Difference between present and previous appraisal system? How much importance you give to the performagic? How does the performagic rating affect your promotion? How does the CRR process work? Do you feel the peer group formation is correct? Suggest any improvement in the system? Responses Employees were not much concerned about the whole appraisal process Employees perceive that the appraisal data doesnt have any correlation with the CRR and further promotion There is no formal training given to appraisers. Each appraiser rates the employee based on his/her understanding. The CRR rating mainly depends solely on how the Manager/ Appraiser can put forth your case before the CRR panel The rule of directly mapping the Performagic score to CRR is not followed since a minimum percentage criteria has to be followed for CRR The chances of overturning a CRR is almost nil since there is a preset percentage for each rating Since its a comparative ranking method, employee can just put forth his/her arguments. The employee has no clue about the things that other person has done Employee submits a CRR profiler presentation to the manger in addition to the performagic. Mainly this data is used by the manager to showcase the contributions of the employee. Peer groups for CRR are decided based on the projects/ accounts/IBUs The size of normal peer group is 20-25 The formation of peer group is mainly based on the role of the employee. If there are more than 25 employees in the project, the peer group formation decision become contentious. The past system provided employees to add/delete tasks as per their convenience. So employees would give higher weightage to the tasks that they had performed better in that half. In the present system the tasks are decided upfront. But in case of project changes or IBU change scenarios, there would be difficulty in meeting the expectations. Current system is completely based on data. So if there is any activity for which no data is present, such tasks could not be clearly captured but the system. Regarding the feedback, most the appraisers try to motivate the employees If the employee doesnt receive a top rating then the common excuses made are visibility of the employee is low and the employee is not involved in organizational related activities. Past System Present System Flexible for task addition Not flexible Qualitative data can also be used Based on quantitative data Ratings given to the employee before CRR Ratings given only after CRR rating is finalized 4 CRR Levels 5 CRR Levels Competency ratings were subjective Competency ratings made subjective Comparison with Wipro Infosys Wipro 2 Appraisals/yr 2 Appraisals/yr Based on preset goals Based on preset goals CRR cycle not transparent Transparent process Less subjective Appraisal Subjectivity involved in appraisal Not linked to promotion Not linked to promotion Recommendations Train the appraisers and reviewers so that the appraisal process becomes consistent across the entire organization Make the CRR process more transparent. This could be achieved by having a session where each employee in the peer group is allowed to present his/her case before others. In this case everyone in the peer group is aware of what are the benchmarks against which the rating is given Make the performagic rating the only criteria for CRR. This would clear the ambiguity regarding the CRR process Employee should be given a chance to put forth his/her case before the performagic data is used for determining the CRR rating Appendix Performance Appraisal Methods Critical incident method The critical incidents for performance appraisal is a method in which the manager writes down positive and negative performance behavior of employees throughout the performance period Weighted checklist method This method describe a performance appraisal method where rater familiar with the jobs being evaluated prepared a large list of descriptive statements about effective and ineffective behavior on jobs Paired comparison analysis Paired comparison analysis is a good way of weighing up the relative importance of options. A range of plausible options is listed. Each option is compared against each of the other options. The results are tallied and the option with the highest score is the preferred option. Graphic rating scales The Rating Scale is a form on which the manager simply checks off the employees level of performance. This is the oldest and most widely method used for performance appraisal. Essay Evaluation method This method asked managers / supervisors to describe strengths and weaknesses of an employees behavior. Essay evaluation is a non-quantitative technique. This method usually use with the graphic rating scale method. Behaviorally anchored rating scales This method used to describe a performance rating that focused on specific behaviors or sets as indicators of effective or ineffective performance. It is a combination of the rating scale and critical incident techniques of employee performance evaluation. Performance ranking method Ranking is a performance appraisal method that is used to evaluate employee performance from best to worst. Manager will compare an employee to another employee, rather than comparing each one to a standard measurement. Management By Objectives (MBO) method MBO is a process in which managers / employees set objectives for the employee, periodically evaluate the performance, and reward according to the result. MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished (methods) 360 degree performance appraisal 360 Degree Feedback is a system or process in which employees receive confidential, anonymous feedback from the people who work around them. Forced ranking (forced distribution) Forced ranking is a method of performance appraisal to rank employee but in order of forced distribution. For example, the distribution requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10 percent in the bottom. Behavioral Observation Scales Behavioral Observation Scales is frequency rating of critical incidents that worker has performed.