Maybe stories are just data with a soul.
~Brene Brown
~Brene Brown

Performance Management -- An Implementaion Challenge

A GOI undertaking manufacturing  petrochemicals related products is taken over by a Private entity … warranting a  re-alignment of its HR policies and practices ….the PMS system undergoes major overhaul and now employee rating affects the performance incentives ….this sudden change causes major heartburn, unhappiness, animosity and a gap between self and superiors assessment of a person  … a Senior manager (HR) is assigned the task to revamp the entire system ….bridge the gap between  employee and superior …. culture alignment ….an effective Performance Appraisal  system ….any thoughts where to begin?

By Suneetha Deb & Harish Raichandani*

Prem approached the HR manager. He had only one question – “Why have I been rated average? What did I do or what did I not do?”

Raj had the same question. Why is Ravi rated EX while he is only VG? He thought he should have been rated Excellent for his contribution.  “But whom can I approach?” He had questions for which he wanted answers 

Prasad has been facing problems. He has assigned a task to Anand, his subordinate. Anand’s response , “Sir I am only Good , pl give the job to the guy who is Excellent.”

Background:

MIPCL was founded, in 1969, by Government of India (GOI) to manufacture Petrochemicals related products. In due course, it grew into a big public sector enterprise having two manufacturing sites, one each in Gujarat and Maharashtra. MIPCL manufactured wide range of products and annual plans were made with the help of marketing forecasts at the beginning of every year. Each plant employed large number of chemical engineers to manage the production processes and maintenance engineers to take care of the reliability issues of the plant.

MIPCL remained a Public Sector Undertaking (PSU) till May’02. In June’02, management control of MIPCL went to PIL (Polymers India Limited, a large petrochemical giant). Consequent to acquisition, MIPCL had to realign its HR systems & processes to that of PIL.

One of the systems that had to be changed completely was the Performance Management System. This system was applicable to 500 supervisory and managerial employees in MIPCLunits.

The old system was a Performance & Potential appraisal form. At the end of a financial year the employees would fill the form and submit it to the HOD who would rate them on a scale of 1 to 7 on task accomplishment, work behaviour & potential. The rating was not linked to the annual bonus received.  Many an employees felt both a donkey & a horse were treated equally (Gadha Ghoda ek barbar).

The new system introduced was a forced ranking system which placed employees on a bell curve., Performance incentive was linked to the rating received.  Human Resource team felt that this system would be appreciated since it differentiated the employees.

But the heads of department found it very difficult to differentiate employees based on their performance & potential. Further, after the first implementation cycle was over, it created major heart burn amongst employees. The HR team was taken aback. Nobody seemed to be happy. It seemed to have created an atmosphere of animosity amongst the employees  Although the ratings & consequent payout was supposed to be confidential but everyone seemed to know other’s ratings. Also it appeared that a serious difference exited between perception of self and that of the superior regarding one’s contribution/ performance.

An employee satisfaction survey was conducted. Thefeedback  was scathing. Some of the remarks from feedback process were -

No true assessment as it is driven thro statistical formula and even deserving person does not getting true rating
Measurement of what is worth a reward  is open to subjectivity and presentation skills.
No measurement for potential
Need to keep proving one’s credibility
The system is individual oriented & is killing the team spirit
HODs  did  not handle PMS communication properly with the employees of their deptt

Bhaskar, recruited recently as Sr. Manager (HR) was assigned the task to revamp the entire system if necessary & prepare a remedial plan.  Tasks before him included understand the prevailing system,  finalize his suggestions,  work-out a strategy and sell the same to line managers.  Apart from the feedback received he also advised to look at the organisational culture, with a view to transition the culture from public sector into to private sector undertaking. 

His boss also expected of him to be able to bridge  the great gap between self perception of an employee and that of his superiors. In other words task before him -- to make it  the performance appraisal a really effective tool both for management & the employees.

What steps do you visualise need to be taken by Bhaskar? Where does he begin? What possibly could he accomplish in next one or two PMS cycles? Besides what are the other support systems / initiatives he would require to develop on the PMS into a meaningful intervention.

 *Case conceptualized by Suneetha Deb, Consultant Potentia
*Harish Raichandani, CEO Potentia

© All copyrights with Authors and Potentia Growth Services Private Limited [Nov 2007]