Article: How IL&FS is aligning its Strategy and Performance Management System

Performance Management

How IL&FS is aligning its Strategy and Performance Management System

Here's the story of a company that is making the transition to measure performance to realize business strategies
How IL&FS is aligning its Strategy and Performance Management System

Five years ago, the HR Team at IL&FS embarked on a journey of assessing Performance Management System (PMS) as an enabler of the business. This involved a re-look at the way the current system was being implemented and making tweaks that would enable the process to be more proactive than reactive. The idea was to get all stakeholders on board and align them to the concept by making an earnest pitch to them on intended benefits. The use of technology was called upon to ensure that we could reach out optimally with least possible lag time. This article will briefly outline the steps undertaken to transform performance management in light of the increasing impact of PMS on the future direction of business. 

Alignment with the business

In order to ensure that the HR function is aligned to the business strategy, the CHRO or the head of the HR function is a part of the business strategy discussions. It is during these discussions that the business goals are outlined, not just for the year but for the upcoming two to three years. The focus from a talent standpoint is to identify what the CEO or the head of the business is going to work on. These goals are then cascaded down to the organization. 

“We see Performance Management System as a key contributor to organization success”

The second activity – that of cascading goals is a structured process that often involves day-long live sessions. This ensures that the numbers from the organizational goals appear on individual KRAs and does not just remain a plan. The businesses have a very detailed review mechanism in place and the PMS system is only leveraging that. If there are any events that are likely to affect business operations, such as the recent demonetization, we make it a point to reassess the goals in light of such events. We focused our energies on managers and developing them to provide a more wholesome experience of performance feedback that developmental in its tenor. Managers are urged to and enabled to take a coaching approach in the reviews. All manager are oriented towards this approach by way of classroom sessions and live feedback system.

Measuring performance and enabling transition

The biggest enabler to undertake any transformation effort has been the culture of the organization. And the senior management have been the torch bearers of this culture. In the end, it is the behaviors that are critical to us. Winning behaviors include:

1)    Innovation

2)    Business or commercial acumen 

3)    Collaboration

4)   Decision Making

There are two elements which are crucial to keep in mind while measuring the behavior traits: 1) is the behavior of the individual in line with what we have defined? And 2) has the person delivered in terms of performance? We are very clear that if a group of people have demonstrated the behavior, then performance should not be a point of concern unless there is a drastic shift in the marketplace. 

The two –pronged approach to measurement also enables managers to make observations and give regular feedback. We have created a mechanism to increasingly reduce the subjective element of behavior-based feedback through continuous orientation. 

The future of performance measurement

We are encouraging managers to build a coaching relationship with their team and be responsible for their careers. The managers have to assess the relevance of KRAs to the business reality and make amends, they are empowered to change the KRAs midway. If they see any instance that draws the attention, managers are encouraged to give live feedback. Such an approach is crucial to a business context where the skills and roles of individual employees are changing on a regular basis. 

Since the organization is a large project organization and operates through many group companies, designed templates are shared throughout the organization. Consequently, the size of the organization also poses a challenge and so our objective over the next year or so is to let the system settle and the processes mature before we embark on our next initiative. 


As told to J Jerry Moses

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Topics: Performance Management, Talent Management

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