There used to be very interesting advertisement on TV few years back.

It starts with teacher checking exam papers at home. Suddenly light goes out.  To stave off the heat, he picks up the exam paper and use it as handheld fan. In the background, innocent looking child asks ,”Sir, this is my entire year’s effort. You just turned it into the fan”. 

This really sums up performance assessment season in IT organizations.

This season of frenetic activity is attributed by –

  • rush to ‘showcase’ performance – get those slides/references out quickly
  • ‘perception’ – when did you hear that last time ? – It is important how key decision makers perceive you. Perceptions are also heavily influenced by Recency effect, thus ‘smart’ alecs make an effort to be in good books just months before assessment.
  • collect feedback from people you interacted with. Such feedback’s are always like – ‘nice/good/great to work with’.  Most people treat it as an obligation since it is  sought long time after the activity is done.

This activity often ends with long-drawn meetings where managers push their candidates to top of the pile. Others also do the same. So,  it turns into hard-fought negotiation rather than performance-based discussion.  In that, small things (read – perception) are often enough for someone’s rise/fall in performance-based ranking.

Scrapping of bell curve into contribution-based systems has hardly changed things much. Since, mechanism to arrive at top/bottom performers has pretty much remained the same.

For a moment, think about how salesmen are measured.

They are measured against specific business goals – how much did you sell against your targets. They get ‘sales credits’ when particular deal is won.  Performance discussion becomes really simple – just look at the sales credits and rank appropriately. If you are really good salesperson, it is obvious that you will collect higher sales credits over entire year, so you are ranked higher. While, being good networker/communicator is essential quality in selling, it would not derail your performance ranking just because you are not in good books or your perception is not great.

We should bring same business-focus into IT Outsourcing assessment.

IT Outsourcing workforce is split in three high-level categories.

  • Sales-focused – people working in sales/presales
  • Delivery-focused – people working in delivery roles
  • Internal Organization focused – people working in ancillary functions – HR,Finance,Infrastructure etc.

I propose to introduce performance ‘credits’ in each of these categories.

Let us take an example in each area to further this concept.

Rob is salesperson working with XYZ account. His key business goal  is to win deals in competitive market which are also deliverable & profitable. He recently won $4 MN deal for which he got 100 ‘Sales Credits’ . His boss also got 250 ‘Sales Credits’. Pre-sales person also got 50 ‘Sales Credits’. His credits are also visible to others in his group, thus causing healthy rivalry within the group.

Ashish is working as Delivery Manager in India. His key business goal is to deliver the project within specific quality/schedule/margin requirements. He has worked on project which internally costed $2.5 MN. Through initiatives, Ashish was able to manage $50 K in savings, thus improving the margins. He gets 500 ‘delivery credits’ as Delivery Manager. Sudhakar (Programmer) working on same project gets proportionate allocation of 50 ‘delivery credits’. Purnima (PMO analyst) gets 25 ‘delivery credits’. So while each of them has contributed to business outcome in their capacity, they get credits only when ‘team’ succeeds in achieving the goal.

Rohan is working as Manager for Central finance function. His key business goal is to reduce costs, thus improving overall margins. He recently drove an initiative which resulted in cost reduction of $250K. He gets 250 ‘Organization Credits’ for this effort. His team also gets proportionate ‘Organization Credits’ for their performance.

Key advantages of such system is –

  • It is transparent. Performance credits are visible to everybody.
  • Everyone knows how they are calculated and what effort is required to get the same.
  • You get the credits immediately after you achieve business outcome. You do not have to wait till end-of-year.
  • It is allocated within the team based on pre-defined proportions. So, there is no question of bias/discrimination/perception. You succeed only when entire team succeed to achieve business outcome.
  • Annual performance assessment is process of simply collating credits one received and en-cashing it in form of performance bonuses. So, its fast and frees up key organizational resources.

You can even introduce these performance credits as ‘internal currency’ so that employees can trade/gift/share among themselves.

Then, you would not mind giving someone ‘credit’ they genuinely deserve.