Problem Definition :
A leading German Automobile company having more than 600 employees, was facing problems such as decline in productivity of employees, high attrition rate of top rated performers as well as lack of motivation among employees in their day to day work. The client approached Align Associate to come up with a solution to overcome these problems.
Align Associate’s experience in the sector for 14 years, knowledge of business standards, best practices, key performance metrics were used to assess the problem. A team of experts were drawn to research & identify the root cause of the problem.
From research, it was found out that the low employee productivity was caused due to ineffective performance rating mechanism of employees. Qualitative performance appraisal system was being followed by the HR team of the client to review employee performance based on their supervisor rating and feedback. This type of performance review system was found to be biased and erroneous as employees could be rated based on their recent efforts and not overall annual performance. In some cases, the employee performance rating was assigned based on the the employee supervisor relationship. Also, there was no existing system in place to differentiate between top and below average performers. Employees also lacked clarity on goal setting. This resulted in lack of motivation among below average performers to put more efforts to carry out the required tasks and top performers leaving the company due to lack of appreciation. Once identified, Align Associate worked towards putting in a comprehensive solution.
To address this issue, Align Associate had suggested the client to change the mode of performance review system from Qualitative based to Quantitative based system. The Quantitative based performance review system followed a 3 step process :
1. Corporate and departmental goals were defined based on consultation with the Senior Management. Later, Employee goals were defined in line with corporate goals.
2. Process deployment to enable capturing Measurable Employee Key Performance Indicators (KPI) in Excel using Automation. Also, Employees were made aware about mutually agreed goal setting standards and system compliance as well as coached on Employee Scorecards. Any objections regarding the goal setting raised by the Employees were resolved after indulging in discussions with their departmental Heads.
3. The final step involved regular monitoring and generation of Employee Scorecards and Monthly Employee Performance Reports. Incentives were also linked to the achievement of target / goals.
Align Associate’s Quantitative based Performance Management System was adopted and implemented by the Client after realizing its numerous advantages. The client was able to closely monitor and review performance rating for employees on a monthly basis with precision.
Challenges Faced :
• Some of the departments had already existing KPI’s equivalent to 60 or more, which made it difficult for departmental managers to track Employee KPI’s. Team members at Align Associate understood the need to reduce the number of KPI’s for easy tracking and measurement. As a result, they faced a critical challenge of reducing the number of KPI’s from 60 to a meagre 5. Hence, only 5 key KPI’s were set across all departments for all employees.
• Data needed to be pulled out from sources for capturing results for measurable KPI’s which was a tedious task. In some cases, there was no source to pull the data and hence new data sources were created to capture the results.
• Goal and KPI setting for more than 600 employees was challenging as team members at Align Associate had to convince the employees and departmental heads for a mutual agreeable setting standards.
The client, after initial hesitation, realized the importance of quantitative based performance management system. Business derived significant benefits from implemented performance management system include :
• Auto Generation of Scorecards by implemented PMS software
• Unbiased Quantitative and Performance based Appraisal
• Mutually agreed goal setting concerning all parties – Employees, Departmental managers and
• Increase in Employee Productivity and employee morale boost
• Increase in Retention Rate among admirable Employees
Please contact Align Associate for exploring possibilities of providing your organization similar support.
Old No.9,New No.12,
18th Avenue, Ashok Nagar
Chennai – 600083, Tamil Nadu, India