Anish joined a
company last year and was assigned to a project which had high visibility. He
was part of a very small team and he worked very hard in implementing the
project and making the project live. He was thenceforth actively involved in
the implementation of new requirements and other modules.
Last month, he
was reviewed by his Head as to what his rating should be, on a scale of 5. He
said that he expected nothing less than 4. Clearly surprised, the Head asked
him why he should get a 4. To which Anish replied that he was there since the
beginning of the project, right after the requirement finalisation stage. He
went on to explain the role he played in the implementation of the project. The
Head nodded his head in defeat and said “I Accept. You have done a lot. I will
give you a 4. But lot more has to be done and I am expecting you to do a lot
more.”
Elated how the
discussion went, Anish went home to his parents and shared the good news and
told them that with a minimum of 1,00,000 coming his way, he will be able to
contribute significantly to this month’s house expenses.
Time passed, and
finally the day of salary credit arrived. After seconds ticked by like hours,
Anish finally received an sms that salary has been credited. He opened it and
was stunned to find only 40,000 was credited.
Confused as to
what could have happened, only one conclusion he drew – that HR had made an
error while calculating his incentive. But when he showed his salary slip to
his friend & colleague, his friend quickly suggested that Anish’s rating
was 3. A one-to-one mail from the Head to Anish stating that his final
moderated rating was 3, only confirmed Anish’s worst fears.
Rife with anger
and betrayal of how his Head could backstab him like that, he reached office
the next day. His immediate supervisor, Sandeep, who had returned after an
official trip, received Anish’s grief in full.
Once listening
to Anish’s account fully, Sandeep asked if he had paid attention to the word
“moderated” in his Head’s email. Looking at the quizzical look on Anish’s face,
Sandeep explained that after discussing the ratings with the employees, the
final collection of all the ratings is put before the board. And then they
decide, depending on the funds available, what the rating of each employee
should be. And one of the parts of the “moderation” is where the tenure in the
company comes into play.
If it has been less
than 6 months since an employee joined, then the maximum rating he/she will get
is 2. If its more than 6 months and less than a year then the maximum rating
he/she will get is 3.
i.e. what is
being implied is even if a guy/lady works their butt off and are eligible for 5
rating (implying Outstanding performance), if he/she has joined just 5 months
back, then he will get a rating 2 (implying below Average performance).
Companies &
Corporations need to be aware of the message that they are sending out, for
their each and every action has dozens of implied interpretations. While I give
it that a company has to budget the money it hands out for performance bonuses,
it should not be at the cost of lowering performance ratings. Say, for example,
a company is a bit tight on financial front; it doesn’t mean that the highest
rating that can be awarded can be lowered to 2 instead of 5. This will prove
disastrous, as the company is clearly sending out a message that no matter how
hard the employees work, they will be rated either average / below average.
Even more
heinous model of performance rating is that of a bell curve, where it states
that for every employee getting a 5, there has to be an employee getting a 1
rating to balance and form a beautiful bell curve. The messages that are
clearly sent out are as follows:
- · All employees cannot perform above average, by rule
- · Even if all employees do perform above average, the company will lower your rating and declare your performance as below average or unworthy of accomplishment
The above
mentioned problems arise from the urge to use a single
index/scale to evaluate performance and also to hand out bonuses.
Rather, the two
can be separated, and brought together through quantified rules. Say, for
example, an employee can be awarded 5 for outstanding performance, but since
his vertical is yet to make revenue for the company, bonus rating can be given
as 2. Those companies obsessed with time spent with the company can also
include the same as a factor to calculate bonus awarded to an employee. Then a
combination of the above mentioned factors can be used to calculate bonus. (Example:
(5/5 – performance rating)*(2/5 – bonus rating)*(11/12 – time associated with
company)*(variable pay allocated in the CTC)
Lot of thought
is required while drafting a company’s policies, for every policy clearly
stands for a message a company believes in.
Sadly, the
companies like the one Anish works for, will beat their chest about the
transparency in their company while clearly ignoring the messages that are
being sent out for the world to see.
As the year end
came near, a questionnaire was sent out by the company to all its employees,
along with a mail from CEO. Anish opens the email only to find that it’s a
“Great Places to Work” survey with the CEO’s message opening with a one-liner
“Let us make our company proud.”
I wonder what
the results of the survey will turn out to be.
