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SYMBIOSIS INSTITUTE OF MANAGEMENT STUDIES

RESEARCH ON PERFORMANCE MANAGEMENT SYSYTEMS OF IT COMPANIES

Submitted Submitted To:

By: Prof.

Kuastubh Mahajan Prakash Mazumdar

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George Zacharia Group 10

Pooja Singh Samarth Sharma Yuvika Sharma PERFORMANCE MANAGEMENT SYSTEM Performance management system (PMS) is the heart of any “people management” process in organization. Organizations exist to perform. If properly designed and implemented it can change the course of growth and pace of impact of organizations. Performance management could be defined as it begins when the job is defined and ends when an employee leaves the company. Between these points, the following should be understood for a working performance management system. Developing clear job descriptions: Job descriptions are the first step in selecting the right person for the job, and setting that person up to succeed Job descriptions provide a framework so the applicants and new employees understand the expectations for the position. Selection: Jobs have different requirements. This is the process of matching the skills and interests of a person to the requirements of a job. Finding a good job "fit" is exceptionally important. Use of a selection process maximizes input from potential co-workers and the person to whom the position will report. Providing effective orientation, education, and training. Before a person can do the best job, he or she must have the information necessary to perform. This includes job-related, position-related, and company-related information; an excellent understanding of product and process use and requirements; and complete knowledge about customer needs and requirements. Providing on-going coaching and feedback. People need ongoing, consistent feedback that addresses both their strengths and the weaker areas of their performance. Effective feedback focuses more intensely on helping people build on their strengths. Feedback is a two-way process that encourages the employee to seek help Conducting quarterly performance development discussions. If supervisors are giving employees frequent feedback and coaching, performance reviews can change from negative, evaluative, one-sided presentations to positive, planning meetings. Designing effective compensation and recognition systems that reward people for their contributions: The power of an effective compensation system is frequently overlooked and downplayed in some employee motivation-related literature Providing promotional/career development opportunities for staff: The supervisor plays a key role in helping staff develop their potential. Growth goals, changing and challenging job assignments and responsibilities, and cross-training contribute to the development of a more effective staff member. Assisting with exit interviews to understand WHY valued employees leave the organization: When a valued person leaves the company, it is necessary to understand why the person is leaving. This feedback will help the company improve its work environment for people. An improved work environment for people results in the retention of valued staff. A performance management system will only be effective if it:

2. Objectively measures performance. 3. Is trusted to be fair by employees 4. Both managers and employees see that they have something to gain from using the system.

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1. Is aligned with a company’s corporate direction and business strategy

PMS IN IT COMPANIES PMS- IBM The performance management system from IBM, integrates software, services, best-practices, and partners. The result – a common understanding and accountable actions based on answers to performance management questions:

How is it done? Measuring and monitoring performance with scorecards and dashboards tracks key metrics.

Scorecards Scorecards distil information into a small number of metrics and targets. • • • •

Deliver at-a-glance information—Stop sifting through a stack of reports to find what’s right…or wrong. Scorecards show you immediately how the company performs against targets you set. Communicate strategy and targets—Metrics show everyone what’s important, what’s expected, and how you’re doing. Increase accountability—Let people see the strategy, understand their part in making the strategy succeed, and give them metrics to measure their success. Connect departments—Scorecard metrics, like your strategy, are interdependent. See how your red metric affects others

Dashboards Dashboards translate complex information into high-impact presentations using gauges, maps, charts, and other graphical elements. • • • •

See changes—Gain a dynamic view of business conditions with timely, refreshed data. Intuitive—Provide an at-a-glance understanding of information for faster action. Understand what’s behind the picture—Drill through graphs for more detail. Align decision-makers—Unite data from different departments for the complete picture.

Why? Reporting and analysis let you see data, gain context, understand trends, and spot anomalies. Reporting and analysis software helps answer the “Why” behind your performance

Reporting from IBM, lets you author and distribute every report type: high-volume production reports, individual ad hoc queries, widely distributed business reports, centrally authored reports with selfservice customization, and more. Draw on any data source. Rely on a single metadata layer.

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Reporting

The result: higher user adoption, better decisions across the organization, and the ability to respond to threats and opportunities. Gain alignment with a single, reliable version of the truth —Common data definitions means you spend less time debating the numbers and more time deciding what to do. Connect with all data sources — Don’t limit yourself with proprietary reporting packages that do part of the job. Author reports across multiple data sources. Get a head start on integrated performance management. Make the right decisions…faster —Timely reports and self-service reporting give you the information you need, when you need it. Meet the information needs of all users —Deliver information over the Web, on mobile devices, through common interfaces like Microsoft Office. Give people information the way they want to see it. What should be done? Planning, budgets, and forecasts sets and shares a reliable view of the future. Budgeting, Planning and Forecasting for Performance Management Budgeting, planning and forecasting software from IBM can free the office of finance from the burden of spreadsheet-based processes. Cognos solutions offer specific strengths to meet the diverse needs of any finance organization. IBM Cognos 8 Planning

IBM Cognos TM1

Optimized for high-participation planning within a Lets you consolidate, view and edit huge volumes structured workflow. of multidimensional data within large, complex hierarchies. If you need: • Input from hundreds—or even thousands If you need: —of cost-center managers • Real-time analytics for profitability, sales mix, and price/volume variance • Centrally controlled, auditable, transparent workflow • Interactive, rules-based business modeling • Driver-based planning, budgeting and forecasting • Flexible rolling forecasts to make your company more agile Many factors influence a company’s performance. But few areas are more important the organization’s decision-making ability.

Getting answers and acting on them means integrating reporting and analysis, planning, and measuring and monitoring—across your organization. This integrated approach is the IBM Cognos performance management system. By integrating information, technology, and people, decision-makers can become performance managers. Performance managers look at metrics, plans, and reports in their functional area to make the best possible decisions.

In this way, your good decisions cause other good decisions. The end result is better alignment, accountability, and performance.

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They also use this same approach to connect with others. For example, if Marketing decisions improve demand, then Sales and Operations needs to know to ensure the supply is ready.

PMS at: Organizational goals and objectives – The organizational goals and objectives are framed by the CEO with assistance from the leadership council. These goals are reviewed quarterly. Categories of goal: These goals and objectives are broadly categorized under the following categories. • Finance •

Solution delivery

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Engineering

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Operations excellence

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Field IT

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Competitive excellence

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Leadership

• Departmental goals and objectives – These are formed by the corporate VP along with the help of HR.

Individual goals and objectives – These are formed by 50-50 consent of both the manager and the individual. The manager forms the goals for the teams and the individuals. The employee can amend them by the consent of the manager.

Performance and development agreement – The Performance tool: Its’ a web-based tool, accessible to every employee. The whole PMS is taken care of with the help of this tool. The goals and commitments of the organization, every boss and his employee are framed and modified using this tool. Each employee can log on to the tool with the help of his unique ID and frame his goals according to the managers’ goals which are already put up on the web.

Managing and developing performance –

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The most flexible part of this model is that the goals can be revised anytime of the year with the approval of the manager. So it is this tool with the help of which the goals and KRAs are formed.

The following steps are taken : • A bi-weekly one-on-one meeting is held between the manager and his employee. • Mid-year review is held in which all the issues are dealt with. This is where the behavior level and expectations are set for each employee. • Online tests like those on Sequel, C++, asp.net etc are held for skills improvement, for which the recommendations are given by the manager. • IT security certified courses are also provided • ‘Mentor-ring’ is a tool in which experts register themselves as mentors. Employees can log on to it and choose their mentors. • Stretch assignments are also given apart from the standard commitments Structure of the Appraisal system – There are two appraisals/reviews held in a year: • Career Compass – it is a mid-year review that happens in January. It basically deals with the development of the employees. Its’ this phase where the competencies needed are defined. A development plan is made accordingly. Two classes of competencies are there. 

Microsoft core competencies – confidence, innovation, cross-boundary collaboration and business acumen

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Functional competencies – analytics, project management, interpersonal awareness and people acumen, strategic insight etc.

The employees are given ranking on 4 levels on these competencies – 1, 2, 3 and 4. Each employee is supposed to be on a certain minimum level in a band. • Final performance appraisal – it is held in August, and is meant for reviewing commitments and rating.

Preparation for Final Appraisal – • Modifying commitments is done (revising the goals against earlier benchmark set at the start of the year)

Final Appraisal – ‘Collaboration session’ is held between the managers and HR personnel, where managers share their employees’ performance details with others and lay down the benchmark. Happens in july or august. It is where managers give ratings to the employees against the benchmark set. Rating system: the ratings are given against commitments – exceeded, achieved or underperformed. Contribution ranking – the relative ranking is given against peer group according to potential, readiness to learn etc. Salary and promotion – Salary revision is based on ratings. A 9-block matrix is framed where each block pertains to different increments. The revised salary is affective in the Oct end salary.

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• Self-appraisal done on the performance tool. Mail sent to manager

Promotion is based on the readiness for next role, business needs, tenure in present job etc. Suggestions:

• Need a distinct and clear ranking system, i.e. grades be given for rankings. • Ratings not to be pre-decided before the actual manager-employee appraisal meeting.

PMS at: Peformance management at Cognizant is a continuous process, unlike most other companies. Oraganizational goals are set by the top leaders in collaboration with clients. Departmental goals again follow the organizational goals and individual goals are framed with the demands of each project in alignment with departmental goals. Managing and developing performance:

• A ‘PIP’ (performance improvement plan) is tailored for low performance employees faring poorly in their job for 3 consecutive months. They are monitored and groomed for 2 months to enable them to catch up • ‘Buddy-up’ plan where a low performer is paired with a high performer and both benefit

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• Refresher or remedial programs are conducted on individual need basis

• ABC analysis is conducted. C is the low performer category. Employees in this category are given additional support and mentored for better performance. Top performers of category A are given opportunities to handle more responsibilities • There is an online portal called ‘learning Management System’ where employees can enroll for various courses

Performance Appraisal: There are two parts to it. Monthly appraisal – at the start of every month objectives are laid down for the employees and they are appraised at the end of the month on their achievements against their objectives. Both long term and short term goals are set. Anniversary appraisal – at the completion of every year of an employee in the organization. So there is no particular appraisal month as such. It’s the summary of all monthly appraisals. Self-appraisal is done before anniversary appraisal. Performance Measures: The criteria are – Quality/accuracy TAT Productivity Attendance Initiative, teamwork, values Rating system: Following ratings are there – exceeds all, meets all, meets some and below expectations Monthly incentives are given accordingly. Salary revision happens according to the anniversary appraisal. Additional projects/ initiatives can affect the ratings Suggestions: •

Weekly one-on-ones be taken for continuous support and development

PMS- WIPRO In Wipro goal is set for entire organisation and according to the main goal of the organisation individual goals are assigned vertically and horizontally Based on this the line managers conduct the goal setting exercise with subordinate. Goal setting cycle: This happens twice a year and reviewed twice a year.

In Wipro a performance appraisal season is conducted in the first quarter which is advertised on all their portals. PERFORMANCE APPRAISAL SEASON consist of 4 sub categories Goal setting cycle

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Goal setting is a mutual exercise between line managers and subordinates based on the premise, feedback happen.

Performance evaluation and appraisal Feedback based on the appraisal strength and weaknesses are figured out and worked on it. Steps taken further which can be training and promotions etc. PERFORMANCE APPRAISAL SEASON includes self appraisal, appraisal by managers, according to the goal and objectives met, score is calculated .Based on this score promotions and projects are decided

Analysis Wipro is one of the leaders in the IT sector. At Wipro, the performance management system has an effective and exhaustive appraisal system. Wipro would do better by improving their feedback system. Also,the appraisal system on a more regular and ongoing basis would help in collecting and assessing the employees. Instead of having seasonal performance appraisal they can have a more frequent system.

PMS- INFOSYS TECHNOLOGIES The first step toward carrying out performance appraisal at Infosys was the evaluation of personal skills for the tasks assigned to an employee during the period of appraisal. To evaluate the performance, different criteria like timeliness, quality of work carried out by the employee, customer satisfaction, peer satisfaction, and business potential, were considered. The personal skills of the employees were also evaluated based on their learning and analytical ability, communication skills, decision making, change management, and planning and organizing skills. Each of these criteria was measured on a scale of 1 to 5 (with 1 signifying above the expected performance level and 5 below the expected performance level).

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360-Degree Feedback: The employees also look at aspects of the managers' performance, strategic vision, ability to communicate, problem-solving skills, responsiveness. The results of the survey (the rankings and comments) are then aggregated and published online for everyone to see.

Recognition for Adding Value: 'What gets measured gets reviewed and what gets reviewed gets improved' is what the company believes in and rewards each employee whose innovation is lauded by the customer. Employee-Management Interface: It reduces the gap between the manager and the employee. Direct Q&A link with the President himself, who is to respond within a given time-frame. Focus on Learning: A lot of investment in employee-focused resources (e-Learning) and creating libraries for employees, holding workshops. All employees are eligible for ESOPs after one year of joining. Innovation: To innovate and nurture your own business ideas by getting support and guidance from the company itself. Innovate@HCL is one such e-forum that enables employee involvement and participation towards innovations in their work environment and beyond. Business Continuity Plan: The company's comprehensive succession plan ensures continuity in the event of an employee-related contingency. • This is a bi-annual process. The system is called PerforMagic. KRAs are mutually set through a discussion between the project manager and the software engineer. Also during this discussion the annual certifications are discussed. An employee can obtain more than one certifications. The previous year’s certifications are also reviewed and training needs are established. Also the reasons for incompletion of certification are explored.

•

Soft skill training needs are also ascertained depending on the project requirements. Finally the points are given. The report is sent three levels higher. If the superiors do need respond on time it is considered approved. Then it is sent back to the engineer to find if he/she is satisfied. If it is agreeable then it is finalised. There is a salary hike or a band change accordingly.

This entire system is online. Hence everyone involved in the process gets to gets track of it. This ensures transparency.

Analysis Infosys uses a system which has been very effective for it over the years. They use a good mix of employee and management involvement as well as using modern methods and technology. Their online system is innovative and ensures transparency in their system. Although,making their system completely online may have other negative impacts like manipulation of data and data authenticity. Infosys has employed their PMS since the past 5 years when the company had about 10,000 employees on its rolls. As of December 2008, the employee strength has crossed 1, 00,000. Infosys has now hired global HR consultant Mercer to work on the overhaul and the process will be completed before June.

Examples of PMS used in IT companies (Web Based PMS)

EmpXtrack Performance Management System is an integrated web-based tool to improve organizational performance by setting SMART Goals for employee, evaluating employee performance, recommending highly competitive compensation plans, managing employee trainings & development and promoting right employees to critical positions. Based on globally followed HR practices and principles, this performance management system

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Organizations succeed when they continuously nourish the top performers and improve (or weed out) the poor performers. The big challenges of following this strategy are identifying the real performers, provide a competitive compensation to retain & motivate them and improve employee skills & competencies to maintain the business competitiveness.

provides right tools to engage employees in productive work, help employee achieve their goals, bring objectivity & transparency in employee evaluations, manage employee trainings, manage employee compensations, promotion and careers.

Features of Performance Management System Setting SMART Goals for Employees: Goal Setting Software provides leaders, managers and employees with web-based tools to set SMART goals and track progress on frequent intervals. Evaluate Employee Performance: Employee Appraisal Software ensures objective and accurate evaluation of your employees performance and helps you find the strengths and weaknesses of the employees. Coach and Train Employees to improve their performance: To continually improve performance of your organization you need to continuously training employees to update their skills and competencies. Training Management Software allows you to manage employee training effectively. Define competitive employee compensation plans: Employee compensation plan helps you to remain competitive in your business and attract and retain talented employee. Promote right employees to critical positions: Organizations success by placing right employee in right positions. EmpXtrack Succession Planning Software helps you to identify critical positions in your organization and recommend right employee to fill these positions.

HYPOTHETICAL PERFORMANCE MANAGEMENT SYSTEM IN IT SECTOR . 1) Translating the strategy into individual performance plans and documentation of the network management business objectives. 2)Focus on holistic performance through hard and soft measures like performance standards and competency requirements

4) Provide documentation of the service level agreements with charts or graphs that show the success or failure of how these agreements are met over time.

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3) Create detailed and measurable service level objectives.

5) Collect a list of the variables for the baseline, such as polling interval, network management overhead incurred, possible trigger thresholds, whether the variable is used as a trigger for a trap, and trending analysis used against each variable. 6) The cycle of meetings Have a periodic meeting that reviews the analysis of the baseline and trends. 7) Focus on climate and leadership style 8) Have a what-if analysis methodology documented. This should include modeling and verification where applicable. 8) When thresholds are exceeded, develop documentation on the methodology used to increase network resources 9) Reward packages • Recognition • Provision of opportunities to achieve • Skills development • Career planning • Job engagement • Enhancing commitment 11)Performance reviewing Through appraisal forms • Paper • electronic 12)Performance assesment • Overall analysis of performance • Written assesment • Rating • Forced distribution • Forced ranking • Visual assesment • Peer reviews

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13)360° feedback system • The questionnire • Ratings • Data processing • Feedback • Action