Group- 6

Renu Chowdary-1401073
Varun Gampa-1401051
Avinash Mekala-1401085
Aditya Kotyala-1401002
Performance management system pre-2009
Pros

Pay policy is about the 75th percentile with regard to compensation peer
group. This produced actual compensation figures that averaged 7-8%
higher than competition.
Reviews were done basing on employees joining date which gave more
attention to manager as the reviews were distributed over the year rather
than doing it in one month for everyone in an years

Cons

System focussed on pay stability of a flat salary.

No provision for bonuses or alternative forms of compensation.
Tenure with company resulted in higher salary inevitably rather than the
performance.
Top performers are not rewarded which resulted in morale issues and
motivation as they felt they were under appreciated.
Managers never gave high ratings like A and low ratings like D or E which
resulted in lot of central tendency error.
There was no way to identify top /bottom performers and reward or put in
place measure to improve bottom performers or phase out.

Performance managements system 2009

We believe that the new system is comparatively better than the old system due
to the following reasons

Identifying both top and bottom performers helps company to retain

crucial talent as this industry demands better scientists and product
engineering team. The focus on them was missing in the old system.
Employees are rated relatively against each other rather than fixed
appraisal in old system which resulted in no room for improvement as they
were getting hikes just because they stayed with company.

Some improvements to the new system

Increasing the manager accountability is very important. As we see, both

in new and old systems managers were very apprehensive to give too low
or high ratings which results in central tendency error and lower
motivation/morale of employees. Hence manager should be made crux of
the system and at the same time employees should be given an
opportunity to approach higher level f he/she feels they were under rated.
As 75% of the employees lie in the achievers bandwidth who are just
meeting their targets it is very difficult for managers to suggest any
improvements though required if they are rated relatively. Hence,
incorporating more bands like pre 2009 would be a better idea.
For giving a salary increase to a person in a team, instead of force fitting a
few top performers and a few bottom performers, we can add a weightage
for teams performance or business unit performance in terms of their
performance benchmarked across with other BUs and teams across the
company.
Including a Market analysis component /benchmarking different teams
basing on the demand for role in the market. This will give an increase in
hike even though some one is in Low achiever category in a specific team
but in a high performing team.
Paying high severance package will at least help company in letting go
underperformers and help company to attract new talent.