The Annual Performance Review Process

The highest contributor for employee satisfaction is the performance management system that a company deploys to review and rate an employee’s contributions. The performance rating has a big impact on the career of an employee as it is linked to salary raises, bonus pools, promotions and possibly future transfers. In many BPO’s and other transaction linked jobs, the amount of what you do and the quality with which you do the same plays an important role in deciding the eventual rating. However, if an employee keeps pushing for that magical rating, how do they contribute to the other softer aspects of the company like sharing, mentoring, training, participating etc? The right balance has foxed senior executives for a very long time.

Many years ago, we followed a “metrics” heavy principle of deciding the future of the employee, till we realized that if we want to become a “Great Place to Work” our teams need to think beyond the transactional part of performance and focus on the wider “culture” linked aspects of their jobs. It was not possible to get rid of metrics as those are still required to be monitored, but we decided to reduce the weightage of these metrics and split the same between metrics and behaviours at a 50:50 ratio. This was widely accepted by the teams, and we soon saw positive behaviours around team work, mentoring, coaching, participation, development, etc. become an integral part of an employee’s life cycle. As we moved up the journey, became a “Great Place to Work”, we reviewed our PMS and realized that the only true way to instil maturity and a sense of ownership is when we remove the metrics from the primary measurement(allow it to run in the background), and include a level of subjectivity in the final review. E.g. Quality required is 95%, but a programmer took on a very tough project, with crazy timelines and delivery beyond expectations. But s/he makes an error which drops his score below 95 for that month. Since he dared to do the difficult, do we now ding him and make him lose his entire months contribution, or we look at this holistically and allow him a higher rating even though he missed his targets.(allowing s/he to be bold and courageous in the tasks they do).

This is phase 2 of our journey – move away from Metrics and bring everyone into a mix of objectives and behaviours and keep metrics in the background for helping you complete the objectives portion of the performance review. It however means a lot of training and calibration between the reviewing managers so that everyone treats a certain situation with the same enormity or flexibility as the case may demand. But if implemented well – a sure winner.


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