The need for change:

What triggered IBM to change its appraisal system and move to a new one?

IBM has been transitioning towards new areas like cognitive, cloud computing and big data. When business transforms, HR policies and people strategy has to be aligned to support the transition. The transition required that we have a performance system that is agile, mobile and helps people develop short-term goals and facilitates regular feedback. This helps managers and employees change goals dynamically in accordance with the evolving business needs and offers an opportunity for people to seek feedback for personal development and managers to give feedback in a structured and easy way. The earlier system of once a year review which also included a “stack ranking" element in which employees were compared to each other, not just to how well they did on their own goals was redundant.

We understand that the approach taken was bottom up and feedback of employees was taken before executing this. What were the findings and how did you assert that Checkpoint is the right process for IBM?

The HR department didn’t just pick a new system and implement it; it turned to its 380,000 employees in 170 countries to crowd source the process. When IBM decided to revamp its employee review process, it asked employees what they wanted to see. The HR department asked for feedback on IBM's internal employee social media site, Connections. It can be said that it were the employees at IBM who created Checkpoint. HR also conducted online mini-polls where employees could vote on topics like work priorities. 

Employees asked to ditch the stack ranking process. They also wanted feedback more often, and the ability to change their goals as the year went on. The five criteria that have been included as part of the evaluation process, stemmed from feedback analysis. These five criteria which IBM now uses to evaluate employees are – ‘business results’, ‘impact on client success’, ‘innovation’, ‘personal responsibility to others’ and ‘skills’. Managers assess whether employees have exceeded or achieved expectations for their role in each of those five dimensions or if there’s a need for improvement.

What are the features that differentiate the Checkpoint system from your earlier system of Personal Business Commitments?

Our traditional approach involved setting goals in the beginning of the year and evaluating the employees based on these goals. Employees would then have a mid-year check-in with managers. They would then receive a final assessment and a single performance score in December.

Checkpoint involves continuous feedback throughout the year. It shifts goals from an administrative process to become a living thing driving our alignment and defining milestones on the way to achieving the big things we set out to do. Checkpoint leverages the five dimensions as the basis for feedback throughout the year and for the final rating assessment of the employee. 

Functionality:

Under the new system, do the employees work on separate goals every quarter or the yearly goals are divided into four parts?

This depends on the type of work they are doing – some IBMers work on projects and their goals are aligned to those projects. Their goals are broken down by the annual objectives into the milestones to achieve the yearly objectives. Checkpoint gives the employees the opportunity to shift their goals throughout the year and includes more frequent feedback.

At the end of the year, employees will be judged across five criteria. How do you assess and measure these? 

The first criterion, ‘business results’ is associated with achieving the goals that have been set throughout the year. The next three (‘impact on client success’, ‘innovation’, ‘personal responsibility to others’) are tightly linked to IBM's values. The last criterion relates to skills development and how this is measured also depends on the skills being developed and the type of role.

Change management:

How are the employees reacting to the new appraisal system? How do you make sure that transition from the old system is smooth?

We have received positive reactions to the new appraisal system. The transition happened in the beginning of the year across all locations. Education sessions were conducted for managers and employees to help the smooth transition. The most important part of the change happens when people own it. This was a system for the people and by the people so it was very welcome.  Employees are engaged continuously through our intranet platform, connections to review the system. HR subject matter experts take on questions raised by employees.

How would you measure the ROI and success of the new appraisal system? Is there a measurement system in place? What are the leading success indicators that you have identified?

Checkpoint is more than a new program for managing our performance. It's an important step in IBM's transformation as a company. Checkpoint will help us to create a culture of feedback and open communication that empowers IBMers to find better ways of working. Mini surveys are conducted every now and then to understand adoption and feedback from employees is continuously reviewed and incorporated.