There was a recent news about Infosys making changes to it's performance management system recently. This resonated well with my recent study around these changes made by many organizations. Providing a quick perspective below-
Sources and Acknowledgements:
Most of the below text is adapted (directly and indirectly) from the below URLs. So all credit to the author of the below articles for the upcoming text.
Motivation behind Infosys's change:
- The change in the performance assessment system has primarily been pushed by chief executive Vishal Sikka.
- To bid adieu to the bell curve as a performance assessment tool for its 1.76 lakh employees
- Bell curve is often criticised as a forced ranking system as managers have to mandatorily classify employees into three categories, and rank the performance of 70 per cent as average, 20 per cent as high and 10 per cent, low.
Shortcomings of the traditional system as observed by Infosys:
1. Said to be the cause of attrition.
2. “In performance evaluation based on bell curve, it became a race to get to the top for employees. We were losing a lot of good people who were not ranked at the top." -Richard Lobo
What kind of changes in Performance Management System were embraced by Infosys?:
- "From this quarter, we have removed the forced ranking and in the October appraisal, employees will be appraised on the open ranking. From now on, the managers will take a call and reward," said Richard Lobo, senior vice president, human resources department, at Infosys. The IT services company started conversations around getting rid of the bell curve three months ago.
- The new system, he said, will be more open and flexible with a pronounced focus on rewards for performance.
- “Attrition is now close to 13 per cent. One of the big reasons for this (attrition) to come down is because we consciously got rid of the bell curve." -Richard Lobo, HR Head Infosys.
- Kissing goodbye to the bell curve, however, is creating problems to managers while justifying ratings to team members. "They will now be forced to face their team members. In the former world, it was easier for the managers to push any disagreement from the team members to the forced ranking," Lobo said.
Around what time-frame were the changes brought in: