CASE STUDY

PERFORMANCE
MANAGEMENT

TAKES A LEAP
BY DR. SANDEEP KRISHNAN

eorge was quite worried about how

he should respond to some of the
queries by employees about the new
performance management system.
There has been angst, feeling of lack of fairness,
and more over unhappiness about the change in
culture it has brought out. It has been a year
since the new performance management system
is in place and last month the performance
ratings were announced. The pay hikes and
performance related bonuses followed.
George has been heading HR for a medium
sized manufacturing firm, Thomson Pumps that
had a strong family lineage. The organization
has been in existence over 25 years and has in
total around 6000 employees. Of the 6000
employees around 500 were managerial staff

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November 2014

and rest were in the worker category. Thomson

Pumps recently saw a change in management
with the son of the owner, John taking over as
the Chief Operating Officer of the firm. John
had gone abroad for his management studies
and believed in the modern principles of
management - including differentiation of talent
based on performance.
George is associated with Thomson pumps
for the past 20 years and is considered as a
great bridge between managers, workers, and
the family who managed the firm. Considered a
loyal employee by the management, he had
considerable respect from John as well. John
had spent almost four months convincing
George about the need for implementing a
performance management system for the

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CASE STUDY

For the successful

implementation of any change
management initiative, it is
paramount for the organization
to give its employees adequate
time to accept it. Transparency in
communicating and reiterating
the key messages and features of
the new system helps to get
employee buy-ins and in turn
ensure smooth transition.

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managerial staff. He mentioned that the firm

needs to grow and making it more competitive
is critical. John was also unhappy about a lot of
managerial staff who saw Thomson Pumps as a
safe haven and contributed very less to the
firm. Although he valued their commitment it
was increasingly difficult to run the firm with
their complacent attitude.
The last all hands meeting of the managerial
staff was filled with very unhappy lot of people
who had a lot of issues with how the
performance management is done.
A few of the comments from the
participants are given below.
"The whole team culture has changed. Earlier
we used to cooperate a lot. Now when I asked
help from a person who got a lower rating than
mine, said that you have a better rating than
mine - you should know all this!"
"I am not sure why I got this rating. I think
my manager does not like me"
"My manager gave me 90 marks out of
hundred in his appraisal score but when the
rating came, I was in the average lot. How can
90 per cent be average?"
"After doing one year of hard work, I am
just handed over a rating that showed I am
average. What is the best here?"
"We have no clue about what is the
increment for the best, above average, average,
and below average performers. There should be
some percentage right? There should be some
communication? We at least know the pay slip is
correct?
"We were doing very well and I was happy
with the standard hike that management used to
provide. I do not know the logic of using this
performance management system now"?
"After 20 years of service, I got less
increment than my colleague who has got only
16 years of service"
George did not know what to say. He was
overwhelmed by the responses. Most of his
colleagues were having more than 10 years'
service in the organization and were used to a
certain way of working and culture. More of
less it was like a government organization. The
new performance management system was a
kind of shock to them. They were not used to
writing goals, evaluation, and relative ranking
was unheard of. Although HR took all the
managerial staff through a workshop on the
same, looks like many things that were not
taught did not happen as expected. The spirit
of performance management was not really
followed in many teams. Many did not have

November 2014

53

CASE STUDY
goal setting discussions,
continuous feedback, or even a
healthy discussion on goal
evaluation. Employees started to
question about the very objective
of doing something like this.
Managers were ill equipped to do
a proper implementation of the
process. How can you teach

Dr. Sandeep K. Krishnan

differentiate so much with a

process that was still not mature.
The repercussion on employee
morale might be too high. How
will the leaders and HR staff who
were still not sure of the whole
process convince employees?
Although John was sure of his
recommendations, George knew

Performance Rating

% of population Recommendations

Best

10

To have 25 % hike in salary.

Pay 125 % bonus, and
consider for a promotion

Above Average

35

To have 20 % hike in salary.

Pay 100 % bonus

Average

40

To have 10 % hike in salary.

Pay 75 % bonus

Below Average

15

No hike, and 50 % bonus

Adjunct Faculty - IIM, Ahmedabad

Dr. Sandeep K. Krishnan is an Associate
Director with a leading global
consultancy firm based out of
Bangalore. He also holds the position of
an Adjunct Faculty at the Indian
Institute of Management Indore (IIM
Indore). He has worked with
organizations like IBM, Infosys, Ernst
and Young, and RPG. He is a Fellow
(Doctorate) of Indian Institute of
Management Ahmedabad.

somebody who was used to

another process to suddenly
move to a new method?
George had a long discussion
with John after the performance
management. He had asked
George to present who were the
best performers and who were
the least performers. John wanted
to ensure that differentiation
happens to each set of people.
Some of the recommendations
John had are as follows.
George was not sure of
implementing the same. He was
not sure whether we could

he first critical step for

George is to develop a
change management plan. A
change management plan factors
in perspectives from different
parts of the organization and also
on how to mitigate issues. A plan
acts as the setting stage for the
remainder of the program. It
creates the need, vision and
medium. Therefore, it has to be
comprehensive and staggered.
Some of the points that need to be
considered as a part of the plan:

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November 2014

that the outcomes that the ratings

are going to influence are many bonus, hikes, promotions!
George was sure that there might
not be too much of attrition as
Thomson Pumps was located in a
small town where job
opportunities were limited.
However, he was still not
convinced about implementing
the system in full hog with the
kind of feedback he has got till
now. He was also worried about
the managerial staff getting
unionized. He was left with his
thoughts.

What is the timeline that we

are committing to?
G
Outline the current state,
identify the transition state and get
a sense of what the improved
state is going to be like after the
implementation
G
How are we going to measure
the effectiveness of the program?
It is advised that managers
regularly conduct one-on-ones and
communicate performance
feedback to employees on a timely
basis in order to avoid any
G

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CASE STUDY
surprises at the end of the year.
This helps create accountability and
transparency. Organizations can get
a pulse of its employees through
surveys and create a logical plan to
target areas of improvement and
showcase results.
It is recommended that George
should engage in an open
discussion with John on the
implications of implementing a
new policy, and finally, what is the
outcome that the organization
wants to derive from it?
It is absolutely imperative to
get the HR team and Team leads
to buy into the new system so
that they can be the champions of
change to drive the program. And,
as important as that is, it is key to
note that culture change doesn't
happen in one sitting or a
workshop. The organization has to
be made ready. And for this,
change has to be brought about,
one piece at a time.
In order to make the
performance management process
a success, George can look at
planning and completing a series
of stakeholder engagement
activities during each stage of
transition. A few points to help
him do so are detailed below:
Awareness
Build general awareness of the
initiative and required changes.
G
General and targeted
communications
G
Overview presentations
G
Discussions with business leaders
Understanding and acceptance
Ensure understanding and buy-in,
engage stakeholders in validation,
planning and execution activities.
G
Targeted education and

communications that begin to

answer employee "What about
me?" questions
G
Validate employee skills
required to operate effectively in
the new workplace environment
Skills development: Execute
training plans
G
Provide the knowledge, skills
and abilities required to perform
new tasks in the future state.
G
Assess employee readiness to
perform new tasks based upon
skills evaluations
Sustain business benefits
Implement a governance process to
sustain benefits and continuously
improve the current state.
G
Governance processes and
technology
G
Measuring and monitoring
G
Alignment of organizational
objectives and reward systems
G
On-going skills training
G
Communicating results
G
Changes to organizational
systems and structures that help
make the change a natural part of
individual and team behaviour
As an organization, it can't make
its employees accept the new
system. It has to get their buy-in
to the new system by being
transparent in communication
and reiterating the key messages
and features of the system. It has
to be a pull mechanism rather
than push. It should be brought
in at the beginning of the year
and reiterated time and again
through mediums like mailers,
one-on-ones, intranet, town halls
and road shows. Springing it up
at the end of the year is likely to
result in bad taste and
disgruntlement.

change. It was also important to

split the audiences, i.e., seniors,
managers and workers (into two
groups, one with 10+ yrs and end
less than 10 yrs of experience).
Meeting should have been
organized with the respective
groups to discuss SWOT analysis
and encouraged openness towards
taking feedback. In this situation, it

his is a classic Change

Management issue, where
more of it has been
implemented basis theoretical
knowledge and not by way of
customization as per the
understanding of the organization,
the audiences, etc. Having said
that, it was an needed for HR to
get creative on handling the

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Michael Baymiller
HR Director, International Paper India
Mr. Michael Baymiller (Mike) currently
serves as Director, Human Resources for
of IP Paper (India) Private Limited. He is
focused on providing strategic HR
leadership to support the companys
growing business in the region.
Throughout his career Mike has held a
number of different HR positions within
Printing Papers, Forest Products,
Containerboard mills and box plants
before being named Director, HR for IPs
Forest Products business in 1999. Prior
to his current position in India, Mike
was Director, HR for IPs Asia business in
Shanghai.

November 2014

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CASE STUDY

Rajita Singh
Head - HR, Broadridge Financial Solutions
Rajita Singh is the Head, Human
Resources of Broadridge Financial
Solutions (India) Private Limited,
Hyderabad; a wholly owned subsidiary
of the US based Broadridge Financial
solutions Inc (BR). Prior to this she was
heading recruitment of ADP Private
Limited, Hyderabad.Her competencies
range from HR operations, learning and
development, associate engagement,
performance management and gender
inclusivity programs. Her expertise is in
Successful Strategic initiatives through
innovation and improvisation.

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November 2014

was essential to engage a PM

Champion with each group who
would play role of an influencer
and key observer of the impact of
the PM roll out. In addition, some
backend work should have been
done to make the process more
transparent and easy for people to
appreciate.
In situations, it is imperative
for HR to move out of the forced
ranking and provide for
normalization of skill-set across
the organization as a whole and
eliminate manager bias, share the
normalization process and
benchmark what's happening with
peer group companies and share.
Then it is essential to double
check if parameters in
performance reflect positively like tenure, previous performance
talent assessment, etc. Also,
developing job-aids for people to
be able to appreciate and
understand such as videos,
pamphlets, etc., can prove to be
impactful.
If people have performed and
lost due to the new model, then
the HR team should look at a
one-time manual adjustment
linked to project performance. In
this case, time should have been
given to adjust to the change. It
typically takes 24-36 months for
any change to become BAU
(Business as Usual), hence
employees should have been
asked to stay patient and allow
for that time to make everything
normal.
As for George's response to
John, I believe that since
performance management is
owned by HR, George should
stand up and now drive the
entire thing instead of providing
recommendations and seeking
approvals. He should split things
in two categories - strategic and
tactical. The need of the hour is
to get tactical, so he should focus
on the backend work he will do
and inform John on the same.
George should focus on longterm success, i.e., strategically
agree on the performance
management philosophy and share

the communication with all. In

this situation the key to this
change will be communication.
Making the performance
management process a success in
Thomson Pumps will require the
following steps:
G
Effective change management Sessions and workshops on new
performance management
methodology.
G
Create champions amongst the
Managers to drive the change
G
Goals to be well defined with
rewards declared for achieving
superior levels of performance
G
Calibration and normalization
process should be introduced to
take care of outliers or exceptional
cases
G
Take feedback for at least four
performance management cycles
and then work towards what is
being collected by way of the
survey.
In this case to make employees
accept the new system, George
must work on these key areas:
G
Introduce self-appraisal and
managers appraisal system - it's
important to know the alignment
and the gaps, by making this a
transparent process will help a
great deal
G
Let associates set goals for
themselves and managers to
facilitate/mentor
G
Create transparency in
communication on creation of
relative rankings promote
associates to accept challenges and
excel - team contribution to have
more weightage
G
Partner with associates through
feedback mechanism and
workshops on suggestions to
work/implementation - on how
we can implement the suggestions
- this will bring the buy-in and
ownership amongst associates
G
Provide more Insight about the
company, its future plans, what
the management is thinking about
the same and what is the financial
strength etc.
G
Deploy the FIDS approach which will enable empathy,
acceptance and structure to the
HC
roll out.

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