WIPRO drops Annual Reviews and here is why

Wipro, is among the latest in Indian IT Giants to drop its Annual Review Process. We discuss how they are introducing a new system and how it will impact them, the employees and the way Indian IT industry looks at Appraisals and Reviews.

Annual Performance Appraisals has always been a dread to 90% of the employee force. The majority of them don’t accept/don’t agree upon the criterions they are ranked on. Annual appraisals always end up as a nightmare both for the management and the employees. The management either loses a significant chunk of its workforce or somehow manages to cripple employee’s morale.

Then why such a system? According to patrons of this system, the bell curve is a more relative method of employee performance evaluation. It is more predictable and till there is a better way of evaluating an employee’s annual performance, this is the only dependable alternative.

So when I read the article on Wipro packing away its forced performance review system and bringing in a less complicated more effective and less time-consuming employee performance evaluation system, my reaction was, “What took it so long? The traditional approach was anyways too time-consuming and ineffective.

There are lots of news articles recently on the Wipro’s decision to throw away its traditional approach of Employee performance management system. We have also seen that Wipro is not the only one top do so. So why this after a decade of following the same traditional process?

What is in it for us? What do we need to know about it?

So what is the big deal?

A large IT giant, which is currently valued at $160 billion and employee force of 170,000 has undergone the biggest transition it would have ever seen. Sometime around last year, about 80% of their workforce had the Bell Curve ditched to move to a new process. The new system now has a quarterly evaluation system wherein the feedback and progress can be tracked more closely and effectively. The exercise lead to more transparency as it is based on their goals and objectives for the year.

Moreover, as part of the appraisals, the IT-Giant will allocate performance linked compensation budgets to the managers. The idea is to make managers take more ownership and owe their decisions rather than prescribed as per the bell-curve bandwidth.

According to recent surveys, it has been noted that a manager who check in on progress on a short-term basis, say weekly or monthly have 24 times more chances of achieving them as compared to those who sit for annual reviews.

Saying this let us have a look at what was happening and what exactly was the change from a beginner’s perspective. The traditional method in Wipro, also known as the Bell Curve method “This method uses forced ranking as a management tool to record performance. Forced ranking ideally is that a company must identify its best performing and under-performing employees in order to thrive and develop. It used to happen once a year with almost minimal or no scope of training or feedbacks.

Graphically, this was the ideal scenario in most of the corporate companies before the advent of 360 Performance Review for continuous evaluation.

The employee base was forcefully ranked into three sections — The low 10%, Average 80%, and the Top 10%. It was like a warning system for the employee to indicate his position in the organization with respect to his peers. The low 10% usually is subjected to performance pressure or somehow renounced. Segregating employees into compartments and tagging the majority of them in the average section cannot be an effective strategy. All this based on your superiors or supervisors evaluation of your day to day performance which somehow is recorded days before the actual appraisal report submission. The question always remains, was it fair? Did the employee get his chance to prove his worth? Did he get a chance to defend his stand? Always asked. Never answered.

The good news, however, is that the companies now are understanding the value of employee retention and adopting better ways of employee performance evaluation.

What’s Trending

According to a report in The Post, about 6% of the Fortune 500 companies have renounced the traditional forced ranking approach of performance appraisal. The 360º feedback method for continuous evaluation is the new way to go. Here, the feedback is more fluid and transparent with timely reviews from managers, peers and third party dealing with them.

This is how the new system works. The performance is reviewed on a regular basis and feedback given for improvement. Rather than spending man-hours in actually rating an employee, companies have now started reviewing their performance and helping them perform better.

This employee continuous feedback method improves employee participation and thus increases work efficiency. Unlike an annual performance review, the continuous feedback program can happen on a quarterly basis and give a chance for the management to track the employee performance on smaller interval and enable training and development procedures as and when necessary. Better trained, better engaged employee= Better performance.

Who are with Wipro in this change?

Many companies have started renouncing the traditional employee performance evaluation technique and started going for more fluid and more transparent ways. Many manufacturing companies have started with competency mapping structures by identifying key competencies and skills required for a project and eliminating the gap between the desired skill level and actual skill level.

Companies like Accenture, GE, Microsoft, Dell, Adobe, Expedia, Motorola, IBM, HCL, Infosys, TCS, and CTS among others have followed suit and have already removed the traditional system and adopted 360º feedback for continuous evaluation. Experts say that many other companies will follow suit.

Infosys has put in place its new appraisal system “Icount”; in which the employees would be subjected to reviews at regular intervals throughout the year and offered feedback for improvement. This appraisal method also has a reward system which is given to employees achieving specific targets. The reward ranging from getting a specific customer account to managing certain events depending on the employee role.

IBM has come up with its own version of Employee Continuous feedback program called “Checkpoint”;. IBM is emphasizing the importance of re-skill and re-inventing in employees. They have implemented short-term checklists or milestones for employees which would be reviewed on a quarterly basis. This feedback program is based on 5 aspects of employee performance namely Results, Client relations, Innovativeness, Responsibility, and skills.

What does this mean to the employees?

From the employment perspective, it means that we need not be in constant fear of termination! I will be sure that I will not be underrated because my superior was in a bad mood. Jokes apart, this change is a boon to employees as it not only helps them grow professionally but also helps them evolve into the company.

The continuous feedback ensures that the employee is aware of his strength and also areas to develop and strengthen. The employee would be aware of areas and behavior traits he wasn’t aware of and also, help him in realizing his core skills.

There would be an increased rapport between the supervisor and the employee and hence a better team bonding.

The employee would be assured of his growth and have a trust in the appraisal system as it is transparent and collated from different sources.

It helps the management in designing a customized learning and development chart to minimize the gap between required skill set level and actual skill set level.

Conclusion

The world is changing, so are the trends. Trends are welcome as long as the majority is benefited! This time, it’s a win-win. There is a change in attitude amongst the corporate management and the way they look at employee performance evaluation. The quarterly feedback sessions have paved the way to a stronger team and motivated and better-skilled employees with a higher chance of achieving goals and targets. I remember our days when we used to wait for our turn for the “One on One:; with the supervisor, with a flowery presentation and a nervous demeanour! We used to sit anxious for weeks for the results, for our rating knowing for sure that if only I had known about something my supervisor just told me about, I would have done better this year!!!

But things have changed now, thankfully and this time, we need not blame.

So it’s going to be “Happy Appraisals!!”

Cover Image Source : Live Mint


Originally published at grosum.com by Sai Janani. She can be reached at sai@grosum.com

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