MHRM 2014-16, XIMB XUB | Akshaya | Anish | Kavyashree

Hegde |
Manisha Monalisa | Sachin | Seekha

DELOIT
TE

PMS

REPORT

Contents
Introduction to Deloitte.............................................................................................. 2
Deloittes Performance Management and its Vision, Mission, Strategy and Values....2
Performance Culture................................................................................................ 2
Performance Outcome Components........................................................................3
Design Thinking....................................................................................................... 4
Performance Management System Overview..........................................................5
Performance Management System Then and Now...................................................5
Performance Evaluation System:................................................................................ 7
................................................................................................................................... 7
Performance Management Cycle................................................................................7
Planning:.................................................................................................................... 7
Types of Goals:........................................................................................................... 8
Competency Model at Deloitte:.................................................................................. 8
Career Plan Form as a part of PMS:............................................................................ 8
Performance Appraisal Form:...................................................................................... 9
Performance Management System and Promotions:..................................................9
HR view of the old system........................................................................................ 10
HR view of the new system...................................................................................... 10
Employees view of the old system..........................................................................11
Employees view of the new system.........................................................................12
Critical Review.......................................................................................................... 13
References................................................................................................................ 14
Online References.................................................................................................... 14
Appendix: Survey Questionnaire.............................................................................. 14

Introduction to Deloitte
Deloitte is a network of professional services firms which employ more than 210,000
individuals across the world. The brand has a history of over 150 years and a
presence in 730 offices in 150 countries. The network is made up of member firms
of Deloitte Touche Tohmatsu Limited, a UK based firm. The associate firms provide
audit, tax, consulting, legal and corporate finance services.

Deloittes Performance Management and its Vision,

Mission, Strategy and Values
Deloitte recognizes that performance management and talent management
needs to be agile in the times when mobile and global workforce are gaining
strength and importance as a result of enabling functions such as technology
which has transformed the way people work, communicate and engage with
each other. Hence, Deloitte establishes that it needs to have less formal and
frequent progress review points. This is in line with Deloittes Vision and
strategy which focuses on people working together as one geographical and
functional business.
The process of goal cascading in Deloitte is communication of
strategic goals, development of targets for each service line within
each functional area and setting of plans for each individual.
Now, we will study various components of Performance Management System
and how they are related with the Vision, Mission, Strategy and Values of the
organization. It discovers unearthing the underlying relationships between
the two and how the performance management system is enabling the
organization to achieve its vision and mission, along with laying importance
on its strategy and values.

Performance Culture
Also, Deloitte aspires to be a standard of excellence and the first choice of
the most sought after clients and talent. It aspires to deliver excellence in all
of the services provided by the member firms. To achieve this Deloitte: Establishes Performance Culture which clearly articulates the
expectations and consequences from one. It holds the people
accountable for organizational results.

It differentiates performance and lays emphasis on providing quality

feedback on individual performance.
Incorporate appropriate and suitable reward strategies
It focuses on employee development and training.

This can also be reflected through the how Deloitte defines performance
culture:For Deloitte, a performance culture is about delivering on our promises and
striving for results to create business and individual success.
Our employees make promises to the firm (Your Promise) and our leaders
and the firm make promises (Our Promises) to enable our employees to
excel and deliver on their promises.
To achieve this, a project team was established in 2007 to develop a
framework for a sustained improvement in Deloittes performance culture.

Also, as Deloittes mission is to enable its employees to develop insight,

expertise, problem-solving skills, and deep knowledge of globalized
marketplace, it promotes a performance culture which signifies self-directed
individuals and nurtures them through coaching. It fosters performance
management based on Quantified outcomes Competencies, Values and
KPIs. This is also achieved through its performance evaluation system which
determines the gap between actual and expected performance and
facilitates establishment of training needs, career and succession plans,
improvement plans and performance based compensation structure
adjustment.

Performance Outcome Components

Deloitte aims to strengthening their daily efforts which will come together
exponentially to benefit a world that needs continuous infusions of integrity,
business acumen, innovation, enthusiasm, thoughtfulness, and most of all,
meaningful actions.
This is achieved through the division of Performance outcome into 3
parameters1) Business Objectives These are tangible and measurable business
outcomes that contribute to firms success. Hence business acumen and
meaningful actions collaborate to deliver these business objectives.
2) Competencies These are the skills and knowledge you require to
deliver upon the business objectives. It enables its employees learning and
growth opportunities which nurtures their skills and boosts innovation
abilities.
3) Signals These are the behaviours you display during the course of
achieving your business objectives and developing competence. These are
clearly defined in the shared values which distinguish Deloittes culture:

Integrity
Outstanding value to markets & clients
Commitment to each other
Strength from cultural diversity

Design Thinking
As Deloitte acknowledges its critical role in helping both the capital markets
and its member firm clients operate more effectively, Design thinking can be
termed as one the firm wide approach undertaken by Deloitte to achieve the
said objective. It is a creative, iterative process relying on a human
centered discovery process, followed by iterative cycles of prototyping,
testing and refinement. Its characteristics are:

Ability to combine empathy,

Creativity,
Rationality to meet users needs and drive business success

As one of Deloittes values is providing outstanding value to the customers,

Design thinking helps in it as it is a people-centric approach. It looks at the
people needs and generates alternatives to satisfy its customers.
The four elements of Design thinking come together to accomplish this:1. Insight recognizing what is important, reframe and seeing the world
with fresh eyes (heart of innovation)
2. Iterate cycle through a robust process (to transpire solutions and
strategies)
3. Empathy understanding people deeply (to lay a strong foundation)
4. Diverge/Converge a mode of creative ideation used throughout
(building creativity by loading and unloading)

Performance Management System Overview

In 2007, the entire performance appraisal system was moved from paper to an
online portal. The goal setting and self-appraisal need to be uploaded by the
individual.
The
reporting
managers
(referred to
as
Counselor
in Deloitte)
review and
overall
rating can
be viewed
her too.
Three main

performance outcomes are measure business objectives, competencies and

values (behavioral signals).

Some of the metrics used to measure business objectives are gross service revenue,
utilization rate (amount of time spent as chargeable to clients), number of training
hours and revenue per client.
There are three groups of goals set at the start of the year - developmental goals,
performance goals and career goals. Developmental goals refer to working on
certain competencies as suggested by the reviewer and performance goals mostly
refer to utilization rates. Career goals focus on attaining appropriate professional
certifications like CPA, ACCA, and CFA etc.

Performance Management System Then and Now

Before 2015, Deloittes performance management system consisted of an interim
and a year-end review with 360 degree tools. Individuals would be given goals at
the beginning of the year and evaluated on whether the met the goals for every
project they worked on. The year-end rating would be decided through consensus
meetings where groups of counselors would discuss their reportees. Overall rating
would be given on 5-point scale.
The performance management system is undergoing major changes as of early
2015. It was calculated that a total of 2 million hours a year were being spent by all
the employees collectively in filling forms, having consensus meetings and giving
ratings. It was also found that once a year feedback is less valuable than feedback
about actual live performance.
Thus, a new radical system is being introduced. The process will consist of only
immediate supervisor feedback. After every project completion, an individual will be
evaluated by his/her supervisor on 4 key statements. These 4 parameters as
disclosed by Deloitte in the Harvard Business Review article of March, 2015 are:
1. Given what I know of this persons performance, and if it were my money, I would
award this person the highest possible compensation increase and bonus [measures
overall performance and unique value to the organization on a five-point scale from
strongly agree to strongly disagree].
2. Given what I know of this persons performance, I would always want him or her
on my team [measures ability to work well with others on the same five-point
scale].
3. This person is at risk for low performance [identifies problems that might harm
the customer or the team on a yes-or-no basis].
4. This person is ready for promotion today [measures potential on a yes-or-no
basis].

Administrative decisions such as compensation and promotion will be taken by

groups of leaders taking into account the data from the supervisors feedback as
well as factors such as project difficulty and other contributions to the organization.
It is hard to say if these changes have been influenced by the new leadership of
Deloitte. Punit Rejen, Chairman of Deloitte US firm, was elected and appointed as
Deloitte Global CEO in Feb, 2015.
A snapshot of changes
Pre-2015
Year-end rating on a 5-point scale
Frequency: annual with an interim review
Multiraters including managers, peers
and subordinates

Post-2015
No ratings. Only feedback.
Frequency: After each project completion
Only immediate supervisor

Performance Evaluation System:

Performance evaluation system at Deloitte is more focused on developing the
competencies of its employees than focusing just on promotions. Therefore, by
replacing annual performance appraisal processes that revolved around competitive
forced ranking with new system of regular feedback and continuous coaching and
development ensures fully fledged development of its employees. The rationale
behind feedback and development approach is to reward high performers
accordingly while encouraging the large swathe of average employees to improve.
Provision of resources like feedback, training, and on-the-job will aid the average
employees to increase their level of achievement. Counseling at Deloitte is a
communication that focuses on understanding the employees and working out plans
for their growth and development.

Performance Management Cycle

Planning:
The counselor uses the information drawn out from the employee as a basis for
setting relevant goals pertaining to employees job targets as well as career
development.

Types
Goals:

of
1.

Competency Development Goals: Acquiring the required skills and competencies

2. Performance Goals: Emphasize on results that one needs to achieve. Focus on
contribution.
3. Career Goals: Reflect the employees professional ambition and personal
interests.
4. Project Goals: Ensuring the conformity of agreed upon goals with the goals of
an ongoing project.

Competency Model at Deloitte:

1. Manages Quality and Risk
2. Focuses on Client
3. Knows the Business and the Industry
4. Solves Problems
5. Develops Others
6. Develops Self
7. Builds Relationships
8. Communicates Clearly and Effectively
9. Manages Change
10.Develops Business
11.Manages and Executes projects
12.Manages to Results

There are three proficiency levels:

Foundation Level: Professionals are expected to demonstrate the above

behaviors.
Advanced Level: Professionals are expected to demonstrate the behaviors
at a higher skill level due to increased experience.
Mastery Level: Professionals are expected to demonstrate the behaviors at
the role model or subject matter expert level.

Career Plan Form as a part of PMS:

The Career Plan form at Deloitte comprises of 5 sections:

The Administrative Data

Performance Improvement Goals: The development needs pertaining to
the competencies required for a given level.
Career Development Goals: Ensures work related goals are complimentary
to personal goals.
Performance Results Plan: Developed by the counselor after the career
planning meeting with counselee.
Approval and Update

Performance Appraisal Form:

It is based on six evaluations areas:

Professional Skills
Problem solving
Proactive Behavior
Communication Skills
Teamwork and People Development

 Meeting Deadlines

Performance Management System and Promotions:

Promotions through the various
levels is based on performance which is a
combination of demonstrating proficient technical skills, consisted behavior,
achieving the target goals , completing the learning cycles and contributing to
organizational growth and profitability.

HR view of the old system

The HR is of the opinion that the current performance management system, which
involves evaluation of the work of the employees followed by training, promotion
and compensation adjustments, doesnt fulfil the intended objectives of the system
since it focusses on past performance rather than fuelling future performance.
Though the process is fair, it is not the best design for Deloittes emerging needs.
Also, a huge amount of time is being invested in the course of the process.
In the current system in which a persons skills are assessed, there is a lot of scope
for ratings to be influenced by raters individual perceptions. Additionally, rating a
person in terms of just a single number seems very narrow and one-dimensional.

HR view of the new system

The new system is very simple and different in its design. Its hallmarks are speed,
agility, one-size-fits-one, and constant learning. It is mainly based on 3 objectives to recognize performance, see performance, and fuel performance.
Recognition of performance is mainly done through variable compensation, which is
already present in the current system.
Performance assessment in the new system is done by way of four key statements
to be responded to by a supervisor. The statements are an assessment of the
supervisors own future actions with respect to the subordinate rather than an
assessment of the subordinates skills. This reduces the effect of the raters
individual perception to a great extent and therefore helps to see performance in a
reliable manner. When this data is aggregated over a year, weighting each
according to the duration of a given project, it produces a rich stream of information
for leaders discussions on succession planning, development paths, or
performance-pattern analysis. Hence the focus is more on responding to facts rather
than ascertaining them. Also, this process would be done at the end of every
project, so it allows to quickly capture performance at a single moment in time.
The new system calls for regular (at least once a week) check-ins by team leaders
with each team member about near-term work. This is ensured by the team
member. This serves the purpose of fuelling performance. In these conversations,
individual members would understand and explore their strengths using a selfassessment tool and present those strengths to their teammates, their team leader,
and the rest of the organization. Hence peoples strengths are given importance in
the new system.

Employees view of the old system

Shreya Adya (Analyst, Deloitte Consulting US India Pvt. Ltd)
At Deloitte performance are rated on a scale of 1-5, 1 being the highest. Parameters
taken into consideration are project performances, off-project performances after a
minimum number of training hours are put in. The system is totally transparent and
employees are given reasons for the rating given to them. The ratings are usually
not a shock and employees have an idea beforehand about the rating they will be
getting. A review meeting with managers manager is also conducted to remove
biases and ensuring a broader picture is considered while rating performance.
People tend to overwork just before appraisal to impress managers and get higher
ratings i.e. Recency error does occur at Deloitte. Strict Non-Disclosure policies and
employees are instructed not to disclose rating and share feedback with peers.

Harleen Kaur (Business Analyst, Deloitte Consulting US India Pvt. Ltd.)

Harleen Kaur had almost the same points as Shreya. Other than those she added
that Deloitte followed a Time sheet compliance where a record is maintained for
recording and tracking the amount of an employee's time spent working. No
advantage is given to senior employees as performance is the most important
rating parameter and there is no parameter for experience. She also added that
there is no customization according to role and the same format is followed across
the board. Managers include inputs from global stakeholders before deciding on the
performance appraisal. There is mixed reaction to this and many people feel it is
necessary for the managers to use their own judgement and see to the extent of
which the inputs from the stakeholders are valid.
Isha Bodh (Consultant, Deloitte Consulting US India Pvt. Ltd.)
According to Isha, Deloitte follows a performance culture. Her performance is
usually recognized and her manager seeks her opinion before coming to any
conclusions. A review meeting with her managers head is conducted before
finalizing her rating to avoid biases if any. Guidelines are there to keep the ratings
confidential. Being a performance driven company, seniors do not have an
advantage when it comes to rating. It is done twice a year and is used for
compensation and training purposes. She is not sure about how effective it is.

Vineet Jain (Systems Analyst, Deloitte Consulting US India Pvt. Ltd.)

Vineet said most employees join as college graduates and they are usually given a
rating of 3 which means there is central tendency error and forced distribution is not
followed at Deloitte according to Vineet. According to him people don't usually
report about any discrepancies or issues they have with the rating given to them.
They feel it is useless and no action will be taken. The pay packages are decided in
the month of January and hence employees are forced to believe PMS at Deloitte is
of no worth.
Shatabdee Tripathy (Business Analyst, Deloitte Consulting US India Pvt.
Ltd.)
Shatabdee Tripathy found PMS at Deloitte extremely objective. It is more of a
performance review than a judgement tool. She said it was very helpful and
followed a constructive feedback mechanism to record past achievements,
strengths, areas of weaknesses and outline her goals. Two types of ratings were
used, one in which she rated herself on a scale of 1 to 5 (1- highest, 5-lowest) and
the second in which her supervisor rated her in a similar scale. Only after the rating
he gave her was accepted by her, it was registered. The rating was used as one of
the factors to determine her increment or variable pay component. It was a
satisfactory PMS at Deloitte as per Shatabdee. It was done twice a year, mid-year

review (august) and year-end review (March). Ratings were given only after
interaction with supervisor. Overall she was happy with the PMS at Deloitte.

Surveys
We asked certain questions to employees of Deloitte through a questionnaire. We
did not ask about their identities to ensure honest feedback from them. From the
replies we got we found that
1. All felt that their appraisals were unbiased.
2. All feel that performance management system helps them improve their
performance.
3. Most of them feel free to express their views to their supervisor.
4. Some agree to the fact that relationship with superiors is a determinant of the
rating one gets while others disagree.
5. The answer to the instrument used question gave 3 answers, bell curve, 360
degree feedback and 180 degree feedback.
6. Most of the employees could relate their performance to the VMO of the
organization.
7. PMS is used for promotion, training and compensation.
8. Most of them say goals and objectives are set after discussion.

Employees view of the new system

So far the new system has been piloted among only about 10% of the global staff.
Thus, the employees view of the new system will need to be evaluated after one
performance review cycle post network wide rolling out of the system.

Critical Review
On the basis of the survey conducted and employee interviews, we are of the
opinion that the new PMS system adopted by Deloitte has been moderately
successful in overcoming some of the earlier drawbacks. The new system has
helped in reducing lot of time in processing of the appraisal forms due to decrease
in number of supervisors, also its biannual nature is aligned with the objective of the

company that is in developing individuals. The new PMS is aimed at solving hurdles
with regards to the process and making it more meaningful to employees instead of
a becoming a mere salary appraisal tool. Another facet of improvement is in terms
of regular monitoring achieved by feedback sessions after every project which was
lacking in the earlier system. New system is free from biases like recency and not
very skewed like the earlier system. In our opinion the new PMS system still suffers
from certain drawbacks or constraints which may pose hindrance towards achieving
100% employee acceptance of the process and 100% intended job accomplishment.
The main flaw as observed by us is the subjectivity that is introduced in the system
by including only feedback as judging parameter. Feedback should be considered
with another way of measuring performance. Feedback helps in working towards
improvement in future whereas the other parameter can help with measuring
performance so far. The system is completely futuristic and negligibly past oriented.
The new system has been very recently introduced and hence employee opinion
and HR opinion regarding the new process will be positively biased. The exact
opinion will be reflected after maybe 2-3 cycles and after exposing the new system
to the entire employee base. We have based our opinion on the basis of the existing
reviews and hence there may be variations in our recommendations with change in
the reviews.

References
1. Success Connect 2012 PERFORMANCE MANAGEMENT GOING AGILE Nicolle
Strauss Director, People Services, Deloitte, 5/30/2012
2. Performance Evaluation in Deloitte, Doing things the right way, Marina Tulskaya,
Deloitte

Online References
1. http://www.washingtonpost.com/blogs/on-leadership/wp/2015/03/17/ deloitte-ditches-performancerankings-and-instead-will-ask-four-simple-questions/

2. http://www.hrmagazine.co.uk/hr/features/1148344/annual-appraisals-losing-impact

3. http://deloitte.wsj.com/cio/2014/06/10/its-official-forced-ranking-is-dead/

Appendix: Survey Questionnaire

1. Since how many years have you been working with this organization?
2. Do you feel your Performance reviews are biased?
3. Do you feel performance management system helps you on an individual
level in improving your performance?
4. Do you feel free to express to your appraiser any disagreements regarding
the appraisal decisions?
5. Do you feel your relationship with your seniors affect the rating you get
during Performance Review?
6. Which performance management tool does your organization use?
7. Are you able to relate your performance to the vision, mission and objectives
of the company?
8. What is PMS used for?
9. Are your goals/objectives/targets set post discussion with your manager?
10.Does the performance review system followed in your organization is
structured as such which provides senior members leverage over the juniors?
If yes, kindly provide a justification for it.