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Analyzing the Re-invented Performance Management - A Deloitte Case Study

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In every organization one of the most important asset is the human capital. The team that makes
the company sustainable. Based on different hierarchy of different organizations, the
“management” tries to analyze the behavior, measure the performances against some set
benchmark and help to develop the skill set of the “employee” to align them as per the strategic
goals of the organization. This continuous push for higher performance is the main reason for
“Employee” Performance management.

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Analyzing the Re-invented Performance Management - A Deloitte Case Study

  1. 1. Employee Performance Management Student: Tathagata Banerjee In every organization one of the most important asset is the human capital. The team that makes the company sustainable. Based on different hierarchy of different organizations, the “management” tries to analyze the behavior, measure the performances against some set benchmark and help to develop the skill set of the “employee” to align them as per the strategic goals of the organization. This continuous push for higher performance is the main reason for “Employee” Performance management. About 360 degree feedback system A process of analyzing the behavior of an individual and to measure his performance at the work spot. The feedback about the individual is collected from all his point of contacts, for example: seniors, juniors, peers, customers etc. Advantages 1. People get a better idea of how they are viewed by others 2. The “Management” also realizes the improvements areas 3. As the feedback is collected from multiple sources, the result is less biased. In case of Deloitte, the major problem that they had, was with the processing and analyzing of the data to get a clear idea about the individual. The normal 360 degree models have a tendency to wear out the respondents with huge amount of questions and tires the analysts in analyzing and quantifying the qualitative responses. The amount of manhours they were spending for conducting this entire process was also huge. Excessive number of respondents also creates a huge amount of standard deviation in the data which can be levelled out at 95 % confidence level. (we will talk more about this later) Why Deloitte moved to the new approach Disadvantages vs Advantages 1. Takes too much time to process the multisource data, 2. The goals get obsolete in an years time, 3. Not engaging enough for the employees and performance was detoriating. 1. To avoid the idiosyncratic effect of multiple rater and also to save time, 2. Easy to analyse the data and communicate the actual feedback in short time, 3. Increase in frequency of feedback session. Old Performance Management System Vs New Performance Management System Annual 360 degree feedback Weekly feedback from Team Leaders A B S T R A C T D E L O I T T E C A S E
  2. 2. Employee Performance Management Student: Tathagata Banerjee The New Method at Deloitte In the modified version of performance management system, Deloitte put a huge amount of weightage on a single person feedback i.e. the feedback of the team leader. The philosophy behind this was that a team leader knows his team the best. No doubt this is indeed true, but the major problem is the “biasness factor” of the individuals. A system with this “biasness factor” issue, will no doubt breed complacency in stead of pushing for performance. So, the actual question is how much Deloitte is willing to let the biasness factor play in order to save the wastage of huge amount of manhours. To counter this, Deloitte has framed the question for the team leaders in a different way. Rather than asking their team leaders to rate the members on their skills, they started asking about how the team leader feel about the individuals on certain future-focused aspects: a) Linking compensation with performance (happens on a 5-point scale) b) Linked to the degree of association between the team member and the team leader (happens on a 5-point scale) c) Whether the person is performing poorly or not? (on a binary scale) d) Linked to measuring the potential of the individual. (on a binary scale) In order to create a transparency in the system they also started weekly review meetings to discuss about weekly performance. Recommendation to the system (Please find the attached pdf files for your reference: The format for 360 degree feedbacks tries to model an optimal 360 degree process with weighted average scores. The self appraisal file shows the type of questions to be asked to the individual team members) 360 degree feedback Self Evaluatuion Discussion with the Management Final Feedback Happening on lower audience size of max 12 people Rate own performance, Share views & Challenges Discussion to express concerns Communicating actions taken to increasse the performance Happening weekly Happening Weekly Happening Weekly / Monthly Happening Quarterly
  3. 3. Employee Performance Management Student: Tathagata Banerjee To avoid the biasness of the rater and to have a clear understanding of an individual’s behavior, his need and reason to perform, a 360 degree feedback system is indeed a valuable tool. Reading the articles it seems to me, that the major pain area for Deloitte was the wastage of “2 million manhours / year” and then there are other aspects like the “ratings reveal more about the rater than the ratee”. To me, it seems, there was scope to improve the 360 degree feedback process and rather than eliminating it, they could’ve used it as a base to get an idea of what an individual think of himself and what is the impression left by him. They could’ve used something like the smiley scale to take a score – i.e. they could’ve tried to make the process a bit more engaging. Once we get the data from the 360 degree we have completed the 1st level of performance management system i.e. the analyzing part. In the second stage, we can measure the difference between the two perspectives, one of his own and one of the others. Weightage should be predetermined based on the amount of direct interactions and reporting along the chain of command. Also, the parameters of the evaluation of 360 degree appraisal system should have individual weightages based on the level of hierarchy in the organization. This way it takes a very short time to collect the data and it gets very easily analyzed in an automated system. The self appraisal method helps to understand the reason of behavior of the respondent. Alongside with the data from the 360 degree feedback and this self appraisal data, it helps the team leaders to understand the improvement areas for their team. Thus, the team leaders can now sit with their teams, and communicate in a more clear and transparent way. As we all understand that while dealing with human beings, there is no single right way. There can be multiple solutions to a single problem. What matters most is the balance between compassion, transparency among other factors. Deloitte did understand the need for the change and they changed. Whether that change is right for the organization depends on internal value system and bureaucracy inside the organization. Unknown to the internal values it’s hard to judge any system. So, based on my understanding from the given articles, my opinion is, rather than removing 360 degree appraisal, they should’ve tried to improve and use it. Conclusion
  4. 4. Employee Performance Management Student: Tathagata Banerjee Reference: 1. http://www.business.com/management/reinventing-performance-management-a-deloitte-casestudy/ 2. https://hbr.org/2015/04/reinventing- performancemanagement?utm_campaign=Socialflow&utm_source=Socialflow&utm_medium=Tweet

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