PERFORMANCE MANAGEMENT

AT NUCSOFT (B)

Case By: Meenakshi Agarwal Gupta & Hemang Bhalerao

Presented by Group 8:

ADITYA
SUJIT
SADAF
THANKAM
VARSHA
Preview :

Ø About a company, Nucsoft, a Software programming and developing based

company.
Ø The company was trying hard to get out from the bleak situation that came because
of the recession in the year 2001.
Ø Many companies were trying to cut down their costs and they faced stiff
competition from others.
Ø Companies were facing difficulties in sourcing people because employee attrition
rate was high and employee dissatisfaction in their work was also high.
Ø It is the same with this company also and the company started to re-orient their
business processes by revisiting with the existing vision and mission statements
(exhibit 3) enabling them to redefine their long term and short term goals and create
strategy to meet their goals.
Ø They formed a steering committee (exhibit-2) and made a SWOT analysis to identify the
Internal and External factors that impacted their success and failure of the organisation
on a whole.
Ø They found that they had a problem in the following aspects.
• Their performance management system is acting as a major hurdle.
• The employee’s performance did not reflect the organization’s performance.
• The system is unable to identify between good and mediocre employees which
helps in providing growth and development opportunities for those performed well.
• They also planned to realign their compensation processes.

Ø They had a annual system of appraising which had its own consequences. But in the
course of the appraisal cycle the company had situations where they either lost the
supervisor or the appraisee as they left the organization.
Ø The had a Manthan (Biannual off site meet) attended by the steering committee,
project managers , project leaders in which they formulated goals and strategies and
shared it with the participants and they were allowed to give their feedback on it
(exhibit-4).
Ø Now they formed a potential core team out of this steering committee which has
shown exclusive interest in this aspect.
Ø They also reached an external consultant to train their participants regarding the
aspects of Performance management and coach them to define performance
expectations and identify Key Result Areas (KRA’s) and Key Behavioral
Qualities(KBQ’s).
Defining Roles and Expectations:

Ø The re-alignment started with identifying roles for which performance expectations
had to be defined.
Ø They identified four areas from software support and software development.
• Software Engineer Development
• Software Engineer Support
• Senior Software Engineer Development
• Senior Software Engineer Support
Ø The core team proposed the roles of the key jobs along with defining the roles and
responsibilities a job holder should possess.
Ø The HR team and the Core team came together to identify the Knowledge, Skills and
Abilities (KSA’s) required for each job
MEASUREMENT OF PERFORMANCE

Ø After assigning of performance benchmarks they started to define the job expectations.
Ø In order to measure this aspect they began to identify KRA’s and KBQ’s .
Ø This process was done by the focus groups which are a part of the steering committee.
Ø These KRA’s and KBQ’s were presented to the steering committee and their
suggestions were incorporated to finalize the performance standards for each role.
How Was the Measurement done???

Ex: when a coding assignment was given to a programmer, a schedule was given in
terms of estimated delivery time, estimated effort and quality targets. With these type of
KRA’s the core team started defining performance ratings.

In order to define performance ratings, the core team made few ratings as below. A
programmer
• who is on target is rated as EE(Exceeded Expectation)
• who is about 5% behind the expectations would be rated as AE(Above
Expectation)
• who is about 10% behind the estimations is rated as ME(Meets
Expectations)
• Any greater lag is identified as BE(Below Expectation).
APPRAISAL INTERVAL AND APPRAISAL CYCLE:

Ø The appraisal was for a one year duration.

Ø Later they decided to make assessment for every 4 months along with the existing
annual performance appraisal system. They named this as their performance
appraisal system as Potential performance appraisal system.
Ø Every 4 months there would be a review of the performance of the employee of
those. After three reviews there would be a annual appraisal of the employee’s
performance in order to assess the capability of the employee to take on higher
challenges in the forthcoming year.
Ø For the potential graduates with one year experience they just focused on the annual
performance appraisal and from the second year they would follow the potential
appraisal system.
Goal Setting:
Ø Carried out at the beginning of every project and at the start of every review cycle and
the performance would be assessed against these goals.
Scale And Weights:
Ø They used a four point rating scale as follows for the purpose:
• EE (Exceeded Expectation)
• AE (Above Expectation)
• ME (Meets Expectation)
• BE (Below Expectation)
Ø They also took into consideration the relative importance of each performance
component.
Ø Weights were assigned to the behavioral attributes required for the completion of the
job.
Ø Decided to have two different set of weights for KRA’s and KBQ’s due to difference
in job profile.
DIFFERENTIATORS:

Ø Felt the need to recognize unique efforts and performance in cases of similar
performance ratings.

Ø Various performance outcomes such as business referrals, clients appreciation,

smart ideas for project improvements were identified as differentiators.

Ø The differentiators were ranked in the descending order of weights and added to
the final score.

Ø The Final performance score was calculated by taking combined weighted score of
result and behavioral component.

Ø The Differentiators score was used to distinguish between the same scores.
INTEGRATING THE PMS:

Ø Appraisal forms were distributed at the beginning of the appraisal cycle upon the
completion of a year.

Ø The forms were filled and discussed with the supervisors with emphasis upon the
potential of the employees to take higher responsibilities.

Ø The goals were set as per this target and the support required was mutually agreed
upon.

Ø Review forms were rolled out at the end of the review cycle and was filled up by
the employee and taken up for discussion with the supervisors.

Ø The previous four months performance will be reviewed and goals for the next
four are set.

Ø The supervisor would then rate the employee and the rating would be integrated at
team, business unit or organization level.
LINKING PMS TO COMPENSATION:

Ø The compensation system was also restructured and a system of annual increment
was agreed upon.

Ø The increment was a function of the employee performance as well as the

organizational performance.

Ø The salary increments and re-designation(Promotions) were not linked. A person

could receive an increment but need not be promoted.

Ø The salary of the employee was broken into fixed and variable components and
the variable component was linked to the performance of the employee.

Ø The variable component of the salary ranged from 20 to 30% of the fixed salary.

Ø This was done to get a better connection between employee productivity and the
organizational performance.

Ø This motivated the employees to put in more effort to improve their performance.
IMPLEMENTATION AND FEEDBACK:

Ø By Jan 2004 the system had gone multiple discussions and a pilot study and was
launched in April 2004.

Ø Based on the feedback of being cumbersome the KRA’s were replaced in Jan 2005
by KPI’s(Key Performance Indicators) which were more quantifiable performance
measures.

Ø Similarly the KBQ’s were later changed to KBI’s(Key Behavioral Indicators).

MODERATION AND REVIEW OF PERFORMANCE RATINGS:

Ø It was observed that the employee ratings were heavily skewed towards the
positive side and did not reflect the performance of the team.

Ø It was decided to moderate the employee performance ratings at a team level,

business unit level or organizational level through review boards.

Ø The system generated certain grievances but was more reflective of the
BELL CURVE:

Ø At the end of a review cycle the employee performance was ranked in decreasing
order in order to forcibly fit into a normal curve.

Ø In case two or more employees had similar ratings, differentiators were used to
decide the ranking.

Ø The company then assigned percentages of employees from each performance

category. This later became the basis for the compensation offered to them
accordingly.

CLIENT FEEDBACK:

Ø For the employees located at the client site the performance review was provided
by the client and their feedback about the employee was used as a criteria.
COUNSELING:

Ø When the ratings of the employee fell below the expected performance
level, efforts were made to see if the ratings made were realistic or their
were certain issues in it.

Ø In case where the performance levels had really fallen, vigilance was
maintained in the next review cycle and proper guidance was provided
through counseling.
GRIEVANCES AND APPEALS:

Ø In case the employee disagrees with the supervisors rating, he would take up the
matter with the supervisor first.

Ø If the supervisor fails to justify his/her ratings, the case would be taken up by the
HR dept.

Ø The HR dept. would provide the justification about the ways and means by which
the moderation has taken place.

Ø Usually done by bringing out the differences in the performance of the

individual and the differentiator ratings which are normally the decisive factors.

COMMUNICATION:

Ø The entire process of the PMS was communicated to the employees through
meetings, training sessions and during induction programs.

Ø
THE WAY FORWARD:

Ø The system is continuously changing by incorporating changes which are more

relevant.

Ø Plans to introduce graphic rating scales to achieve consistency of ratings.

Ø Evaluation of the possibility of potential assessment.

Ø Need to introduce measurement and assessment standards for the evaluation of

team performance.

Ø Still unsure of the parameters to evaluate the senior management.

Ø Possibility of making career planning forum a part of the PMS.

ANY QUESTIONS???
Click to edit Master text styles
Second level
● Third level

● Fourth level

● Fifth level
THANK U… 
Click to edit Master text styles
Second level
● Third level

● Fourth level

● Fifth level