GROUP 1

P E R F OR M AN C E A P P R AI S AL M A N AG E M EN T
INFOSYS LIMITED

Submitted to: Prof. Pankaj Kumar

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Contents
PERFORMANCE MANAGEMENT SYSTEM........................................................................................... 3 Infosys Work Hierarchy................................................................................................................................... 4 Performance Management System - INFOSYS Limited ............................................................................... 5 PerforMagic ........................................................................................................................................................... 6 Core competencies measured: Result / behavior oriented ............................................................................ 7 Promotions and compensations......................................................................................................................... 8 APPRAISAL AT INFOSYS .............................................................................................................................. 8 HR issue at Infosys : iRace......9 Performance appraisal system followed for software engineers ....................................................................................... 9 360 degree feedback: Followed for the senior executives ............................................................................................. 10 Analysis ................................................................................................................................................................ 11 METHODOLOGY .......................................................................................................................................... 12

PE R FO RM A NC E M A NAG E ME N T SY STE M

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, onesided 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: 1. Is aligned with a companys corporate direction and business strategy

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.

I N FO SY S WORK H IE RA RCH Y

Infosys has a flat hierarchal structure. The number of intervening management between staff and managers is very less. The CEO is at the top most level of the hierarchy (Refer Annexure). Under him all the different departments of the organization fall into. The major advantage associated with a flat organization is that Lesser levels of management leading to quick decision making Fast and clear communication due to less level of management Subordinates are free from close and strict supervision and control. Superiors may not be too dominating because of large numbers of subordinates Less costly

The disadvantages associated with such organization are: There are chances of losing control because there are many subordinates under one manager The discipline in the organization may be bad due to lose control The relations between the superiors and subordinates may be bad. Close and informal relations may not be possible There may be problems of team work because there are many subordinates under one manager Flat organization structure may create problems of coordination between various subordinates

The key things that the most important people in the organization spent on doing are Defining problems rather than solving problems Becoming more multicultural Identifying trends in the industry Diversifying the business

The key principles which help the company in achieving its goals are Being transaction-based, not personality driven Focused on the long term in compensation and planning No blurring of the boundary between corporate and personal resources

PE R FO RM A NC E M A NAG E ME N T SY STE M - IN FO SY S L I M I TED

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). 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. Employee Engagement: Some of the new initiatives include My Pal, Three Cheers, Wellness Programme, LittleMindian and Bring a Smile Programme while some of the existing ones are preventive health check-ups, yoga classes and employee relief fund. The Performance Management System at Infosys 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 years 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.

PERFORMAGIC

It is the name given to the online performance and appraisal portal in Infosys. It is a half yearly process i.e done twice a year. KRAs are mutually decided through a discussion held between project manager and the software engineer. The process here is to go and fill the performance appraisal form. It includes all those task that one has done in the last 5 or 10 months, what one has learn from it, the expectations and is rated accordingly by the appraise himself, on as to how he was able to perform and how well he was able to perform. So, it is more of like Self ranking or appraisal or self-evaluation. This filled appraisal form by the appraise will then go to the appraiser. The appraiser would then do the cross checking or cross evaluation/validation. Usually there may be differences in the ratings between them. And based on these evaluations, it was decided on whether or not he can perform as is expected. Infosys also adopts 360 degree feedback, and these are basically done for the higher management. Overall Performance based on: Task assigned (as per PERFORMAGIC) Consistency of performance (Business Continuity Plan) Complexity of work environment Demonstrated capability in taking up higher responsibilities

The consistency is ensured by the company's comprehensive succession plan called business continuity plan. This system is online and visible to everyone involved in the process to ensures transparency. The idea of having online system is too. Although, completely online has its own disadvantages as there are threats of manipulation of data and its authenticity. Business Continuity Plan : First step - Evaluation of personal skills activities assigned to an employee during the period of appraisal. This is done to evaluate the performance using different criteria like a) timeliness b) quality of work carried out by the employee c) customer satisfaction d) peer satisfaction and e) business potential. Criteria used for Personal skill evaluation of the employees : Learning and analytical ability, communication skills, decision making, change management, and planning and organizing skills. Scale of 1 to 5 ( 1 indicating - above the expected performance level and 5 - below the expected performance level) used to measure each one of them. a) 360-Degree Feedback: By employees to review managers' performance, strategic vision, ability to communicate, problem-solving skills, responsiveness. The ranks and review is published online for all to see. b) Recognition for Adding Value: Rewards each employee whose innovation is liked by customer. c) Employee-Management Interface: To narrow the gap between them. Direct Q&A link with the directly President, and he is supposed to respond within a given time-frame.

d) Focus on Learning: Employee-focused resources (e-Learning) and creating libraries for employees, holding workshops. All employees are eligible for ESOPs after one year of joining. e) Innovation: To innovate. Innovate@HCL - an e-forum to nurture innovation among employee

C O RE CO M PE T EN C I E S M E A SU R ED : R E SU LT / B E H AVI OR O R IE N TED

Infosys believes in meritocracy and has built a high performance work culture among its workforce. To align the employees performance with Infosys business goals, regular system driven appraisals are conducted. Infosys has three tracks for performance management Track 1: The first track deals with review of performance relying on feedback and tasks on technical/ personality competencies. Infosys is moving to a role based structure and competencies for each of the roles with standard expected levels of behaviors have been identified. Training needs are derived based on the tasks evaluations and competency feedback. Track 2: The second track is the senior management appraisal. People in managerial roles undergo this annually. Here the employee fills up a self appraisal form and carries it forward to a panel discussion. The panel includes the head of the department, the immediate supervisor of the appraise as well as the senior person from another department. Promotions are decided on the basis of this review Track 3: 360 degree appraisal constitutes the third track. This has been happening over the last 3 years for all departments and practice units. Levels covered include the head of delivery, heads of departments/practice units, all the people who report to the heads and all others holding leadership positions in the organization. Infosys lays down certain parameters based on overall work. First of all, it measures the performance of work done in the last 6 months or a year. And the parameters are set, on as to how much one has gain based on technical skill, their work, or whether have undergone any kind of certification to improve work quality, effectiveness and technical knowledge. Thus these are the parameters taken into consideration while measuring their performance. As for the behavioral aspects, the PMS looks into the combination of skills such as leadership quality, team building skills (i.e how good one is doing within the team itself, whether one is able to gel or get along well with the team), ability to distribute the work and their approach in several groups. Thus for example in behavior aspects, the core competencies they would look for is leadership quality. If one is a new member, then as they grow in the organization, the focus will be on grooming their leadership skills. If one lacks in this, training related to soft skills areas are given. And for technical knowledge and expertise, they will be given a go for certification, be it internal or external. Thus the performance appraisal system of Infosys is a combination of a measure of behavior as well as knowledge based skill i.e result.

PROMOTIONS AND COMPENSATIONS

The promotions and compensation policies of Infosys are very much related to what the company does. For Compensation, a certain budget is allocated to Compensation team itself. And based on this budget that they received, they distribute it according to the performance that everybody has done. So basically, first comes the budget and then based on the already set parameters on how to measure performance, ratings will be given. And based on these ratings obtain, the allocated budget would get distributed accordingly. Infosys follows Consolidated Relative Ranking system. It is based on the assessment of the relative grading of each individual member and is done on the people within the same rank. Here the ratings are assigned from 1+ to 3 (i.e 1+, 1, 2 and 3). 1+ signifies that the person has delivered an outstanding performance. He is the Star performer. Similarly, 3 rating signifies that the person has underperformed. Also, it is to be noted that, a certain percentage is set as to who is to be given what ratings. As for example, if in a software developer, there are 10 teams, then it is decided that 10% will be given 1+ rating, 30-40% will be given 1 rating and so forth. So based on this ratings the compensations is decided as to who gets to be rewarded with a salary hike and by how much percent. And as regards to Promotion, the company sets aside certain number of restricted promotions that they can make. Basically, it is rewarded to those who have for a consecutive years, obtain 1+ rating. So, getting 1+ rating and being awarded with salary hike does not necessarily meant that one would get promoted. Besides this, promotion also depends on other factors like vacancy.
APPRAISAL AT INFOSYS

Self appraisal is an assessment method in which the employee rate or judge himself. Usually an informal tool, though some time it can be company policy, is usually serves as one of the inputs in doing official performance appraisal by the manager or the super ordinate of employee concerned. The whole premise of self appraisal is based on the notion that a person knows themselves better than any other. This notion is weak as people tend to overestimate their capabilities as demonstrated in a survey by Harvard Business Review where 97% of people put them in top 10% performers of their company. Self appraisal suffers other problems such as; it provides a way out to lazy managers and save them from doing appraisal. Another problem which is there is about the quality of self appraisal which varies from one individual to other. Maybe this can be rectified by making appraise write self appraisal based on company guidelines and better still a guided writing format. Self appraisal holds merit in case where the job description is hard to generate and record, usually the case with higher authority in a company. At Infosys a 360 degree appraisal is used which have four components Self appraisal Superiors appraisal Subordinate appraisal Peer appraisal

During interaction with employees of Infosys (ex and current), it was clear that self appraisal instructions are based on local management mindsets. Maintaining relationship with management is important for the self appraisal to be of merit. Follow ups are usually rare and an employee may end up in a working environment not enjoyed by them. Being a big company and considering the large number of employees it is hard to do a follow up on the weaknesses stated in self appraisal form unless it a problem common. Moreover self appraisal is not considered as such very important component and reliance is more on customer and shareholders centric. There is a self appraisal form but the usually the exercise is usually seen as tedious by the employees aggravated by the results. Usually the immediate managers have an influence on the self appraisal of the subordinated as they take an unusual level of interest in favoured ones at an informal level and do pave way for superior appraisals. Also because there is a subordinates appraisal component and so lower level managers usually tend to confirm to overoptimistic reviews of the employee. Usually taken as a tool to feel people involved in performance appraisal process it suffers with all the typical benefits and weakness. Thus a review to weed out these cons and to further strengthen the process is needed which becomes more important resource in Human resource which makes a competitive advantage with other firms in the industry.
HR ISSUE AT INFOSYS : iRace

Infosys Role and Career Enhancement (iRace) initiative at Infosys Technologies Ltd. (Infosys) launched in June 2009 . It was designed by a consulting firm called Mercer. It was a major restructuring initiative at Infosys and faced problems from few employees side questioning Infosys right employer for employees image. The initiative was launched with aim of mapping positions with the skill level of an employee. However, it led to few unfavorable consequences. Some employees were dissatisfied with cuts and rationalization imposed by iRace initiatives. It led to rising attrition rate and acts against company management on Internet as media. Social media policy was defined to control interaction on internet. intranet for allowed dissatisfied employees to give their views. Company continued with iRace, but decided a system of probation period for future policy changes. About 4,000 employees left Infosys in February 2010 due to iRace iRace initiative was large with 25 career streams created after work done by 65 managers for 18 months time period. How it affected employees? It created tougher performance benchmarks, promotions happened with less frequency and fewer salary increases. An employee was expected to clear two new certificate exams exams in a year to get promotion and salary increase. There were implementation issues with certifications as those certificates were designed by Infosys. This didnt had any value outside Infosys, so there was no motivation for employees to clear it. It froze the hikes and promotion for two years. Example: A project manager having 3.5 years of experience was called technical lead and to become a project manager was required to work for two more years. The iRace essentially weight age on number of years of experience instead of meritocracy. So a high performer cannot be promoted or given a salary hike if his/her years of experience not according to that given by iRace. Employee working hours were made long compared to overseas employees 9.5 hours in India.
PERFORMANCE APPRAISAL SYSTEM FOLLOWED FOR SOFTWARE ENGINEERS

The performance appraisal process at Infosys begins not only with performance evaluation but also encompasses the evaluation of individual skills for the tasks assigned to an employee during the assigned period of performance evaluation. In this regard, performance appraisal takes into consideration various performance criteria like timeliness, quality of work, customer orientation, and peer satisfaction and performance improvement potential.

In Infosys software engineers are given a form, containing various aspects of evaluations. The form is very detail and employee is allowed to mention every information regarding his performance. This form is than reviewed by his senior and after the discussion and modification the form is forwarded for appraisal purpose. This form is stored in a database and tracking employee performance gets very easy. This system is one to one and both the party do have opportunities to keep their points and allowed to support them with fact. The need for grievances address is minimal as the employee is also a part of the system. Based on some primary research and secondary research appraiser response are as follows The company has also launched an internal job posting mechanism and the concept of personal development plans, on the basis of 360 degree feedback 1. Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance 2. Appraisee feels the system to be fair, increase his predication. Appraisee feels more control over the appraisal system resulting in satisfaction and acceptance of the appraisal 3. Its inherent transparency eliminates personal bias to a great extent 4. Increase communication between appraiser and appraisee regarding job content, performance criteria and mutual expectations 5. Appraisee gets feedback directly (concept of known to self and known to others) 6. Need for further skill development can easily be identifiable

7. Appraiser come to know details about the appraisee strength and weakness 8. Appraiser can identify employee on whom he has to focus 9. Encourages involvement and responsibility of the appraisee Infosys performance appraisal for the IT engineers is in a continuous as employees are given feedback very frequently about their performance and employee can register his/her grievances at any period. This timely procedure makes sure that final assessment quick and effective.
360 DEGREE FEEDBACK: FOLLOWED FOR THE SENIOR EXECUTIVES

In Infosys 360 degree feedback is used to evaluate leaders. The appraisal to select a leader is carried out through a 360 degree feedback mechanism where people are asked to rate a person on certain leadership competencies. The l eadership competencies were identified after a detailed analysis of the most desired traits that an ideal Infosys leader ought to have. The constituents providing feedback are superiors, peers, subordinates, clients and self. The benefits of 360 degree feedback to the employee and the organization Reduction of the blind areas 360 feedbacks at Infosys has definitely enabled leaders to become more self-aware of how they come across to others a really valuable development tool

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More effective management of performance Managers have found that the 360 feedback helps them substantiate to staff both learning areas and areas of performance which is already effective Greater ownership of learning and self-development amongst the workforce Manager said that they have started to take more responsibility for their own development, because 360 degree feedback requires everyone to really think about how they are working and how they can improve Improvement in behaviour from some individuals who were negative or disruptive in their behaviours to other staff have made positive changes for the better Mangers are getting more responsible towards the clients More persuasive as its a opinion from many different people 360 degree feedback is a good indicator of organizati ons culture More helpful for self development

Drawbacks of the system Time consuming and difficult to administer Problems in personal relationship due to unfavorable remarks Can impose an environment of suspicion if the information is not openly and honestly managed
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. Performance analysis should lead to the following: 1. Identification of the factors that have helped the appraisee reach the level of performance he achieved in relation to various KPAs, targets and various other functions associated with his job. These may be called 'facilitating factors', 2. Identification of the factors that have prevented the appraisee from doing better or those that hindered his performance. These may be called 'hindering factors'. 3. Identification of the factors (from those above) that the appraisee can do something about (to retain if they are facilitators or reduce and eliminate if they are hindering), those which the reviewing officer or somebody else in the organisation can do something about, and those about

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which not much can be done. Such an identification would suggest action plans for the appraisee as well as for the appraiser. 4. Identifying developmental needs for better performance on critical functions associated with the present role. 5. Gaining a better understanding about the appraisee, his role requirements and the situation in which he is working and also share with him the expectations and understanding of the appraiser so that the communication between them is increased. During self appraisal there are some problems that crop up. This is mainly due to subjective nature of the form. Sometimes employee fails to assess himself properly and sometimes manager arent adept to evaluate 1. Due to subjective nature of some qualities like team skills and leadership skills, its hard to reach on to an agreement 2. Due to semi-annual frequency possibilities of ignoring initial performance and focusing more on the recent month performance 3. Managers some time dont feel comfortable to discuss performance issue when there is a personal relationship 4. Managers find it hard to rate employees skill when it involves subjectivity 5. Influence of personal ties or halo effect may have a very drastic impact on the evaluation process 6. The use of bell curve in ranking system is also a bone of contention, as manager have to put 10% as star performer and 10% as a poor performer and rest divided in mediocre segment , this method is a necessary evil

METHODOLOGY

For doing performance analysis the following steps should be followed: I. After discussions on KPAs, objectives and other dimensions with the reporting officer, the appraisee should periodically keep reflecting about how well he is progressing in his work and in relation to KPAs and other dimensions. II. During the performance period whenever the employee comes across success experiences or feels helped in his performance, he should note the same on a piece of paper (or diary). In noting this focus should be on the factors that are helping him do well and how these are facilitating his performance. A brief mention is enough as reminders for him in the final performance analysis. III. Similarly, whenever he experiences failure or runs into difficulties or feels prevented from doing better, he should note the factors that are causing this. (It is a part of the managerial role to continuously keep communicating such factors to one's reporting officer and take his help to overcome them.) However, these should be noted somewhere for annual review.

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IV. At the end of the performance period the appraisee considers his own performance on each of the KPAs and other dimensions. Taking into consideration the effort he had put in, difficulties he experienced, the results he achieved and the context in which these were achieved he rates himself on a rating scale (or at least categorises his performance as excellent, good, average, poor, etc.) V. After assigning himself such ratings, he should start listing down all the factors in detail that have helped him in accomplishing whatever he accomplished. Similarly he should list down all the factors that have prevented him from doing better or that have become constraints on his better performance. In listing these factors he should take the help of the notes he maintained during the year (steps 2 and 3 above). He may also go through item by item in his KPAs to make the list exhaustive. (While KPAs are helpful for performance analysis, the appraisee should go beyond KPAs and look at each and every aspect of his work and list the facilitating and inhibiting factors.) After listing down the facilitating and hindering factors exhaustively, the appraisee should then classify these factors into the corresponding categories

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Annexure I (Organizational Structure)

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Annexure II (Work Hierarchy)

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Annexure III

OBJECTIVES OF STUDY 1. To critically examine the Performance Appraisal System of Infosys with reference to its practices and processes at the different levels. 2. To draw the necessary findings in the light of the data analysed and interpreted.

DATA COLLECTION AND SAMPLING In order to fulfil the above mentioned objectives and to meet the requirement of the research the data has been collected in the following ways: PRIMARY DATA QUESTIONNAIRE: Comprehensive structured questionnaire was designed for collecting the data. The questionnaire was designed for the managers and executives working at the middle and top level of management at Infosys. DIRECT INTERVIEW: The required information for the present research has been acquired through direct interview of the officials working at the top management; the study has been conducted objectively. The interviews were taken in an unstructured form and further analysis / outcome has been suitably presented

SCREEN SHOT OF SAMPLE ONLINE INTERVIEW

RESPONDENT NAME : Vineet Pandey DESIGNATION: SAP Consultant at Infosys Technologies Ltd me: Appraisal....Does it happen annually or bi-annually? Vineet: bi Similar roles form their own peer group 2:41 PM around 25 in each peer group Me: Alright Vineet: Their appraisers are in one consultation group Me: and who decides the KPIs & KRAs? HR or Ops Vineet: The consultation group then discusses and fits everyone in one bell curve 2:42 PM me: What is the role of HR? Vineet: I decide my goals, my appraiser will check them Me: :) 2:43 PM Vineet: bell curve = normalization

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Annexure IV INFOSYS DESCRIPTIVE STATISTICS: Item Process of communicating performance standards Feedback Mechanism Performance Process Review N 12 12 12 12 Minimum 3 3 2 3 Maximum 5 4 5 5 Mean Std. 4.0833 3.417 3.417 4.1667 Deviation .51493 .5149 1.07309 .57735

Clarity of Performance appraisal System Transparency Performance System Valid N (listwise) of appraisal

12 12

3.5000

1.16775

Annexure V INFOSYS SALARY REVIEW BY EMPLOYEES

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