Article: Is Razorpay onto something big? Unpacking their new performance management system

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Is Razorpay onto something big? Unpacking their new performance management system

Razorpay's progressive approach to performance management puts employees first, setting a new industry benchmark.
Is Razorpay onto something big? Unpacking their new performance management system

In today's dynamic workplace, the employee experience stands as the cornerstone of forward-thinking, talent-centric organisations. In a world where agility is paramount and top talent seeks alignment with organisational values, prioritising employee welfare is not just a choice—it's a strategic imperative. 

Performance reviews are one central aspect of this. They are no longer solely tools for assessment, but a crucial reflection of an organisation's commitment to employee growth and success.

Traditionally, performance reviews were often seen as a one-way street, a top-down evaluation with little emphasis on development. This outdated approach often falls flat with today's workforce, who seek more engagement and personal development. By prioritising employee experience and welfare, companies demonstrate a genuine interest in their people's well-being and professional growth. A well-designed performance management system, built around continuous feedback and development opportunities, fosters a sense of ownership and empowers employees to thrive. This yields multiple dividends across productivity, retention, and building a stronger bottom line. 

The shift to an employee-centric performance management system

This dedication to fostering employee growth, well-being, and overall development is at the heart of Razorpay’s recent performance management transformation. Recognising the need for a system that better served these goals, the company embarked on a journey to redefine the performance review process.

An internal survey revealed that the existing process, while well-intentioned, was hampered by excessive paperwork and a lack of meaningful feedback. Over 5000 hours were lost annually to calibrations, underscoring the need for a more progressive and development-focused approach.

Armed with these insights, Razorpay’s leadership began a comprehensive overhaul of the current performance management framework, shifting the focus from ratings and numbers to fostering rich, two-way feedback conversations that empowered employee growth and development. This approach perfectly aligned with Razorpay's commitment to nurturing its workforce.

The transformation extended beyond existing employees to encompass all the acquired entities of Razorpay. Streamlining the process across these diverse entities was crucial. Each with their unique cultures, values, and performance practices, had to be integrated into one unified system. It was a herculean task that underscored Razorpay's commitment to not only its existing employees but also to its new team members. This strategic move reflected the company's core values and its desire to cultivate a unified culture across the entire organisation. Through extensive consultations with the leadership of the acquired entities, Razorpay ensured the new performance management guidelines were tailored to meet the needs of all stakeholders. This collaborative approach fostered a sense of inclusion and ensured a smooth integration process which was critical to the success of this new journey.

Driving employee development: A holistic approach

Launched in September 2023, the new performance management system departed from the traditional, once-a-year, paperwork-intensive approach, pivoting toward a framework that encourages continuous growth. While annual reviews are still conducted in March for comprehensive assessments, the focus has fundamentally shifted to ongoing feedback and development. Regular mid-year check-ins act as crucial touchpoints for Razors and their managers. These conversations focus on career aspirations, goal setting, and progress updates, fostering a sense of ownership for development.

Razorpay's commitment to a holistic approach extends to a comprehensive 360-degree feedback system. This system incorporates self-assessment, peer feedback, and input from stakeholders and direct reports, all evaluated against the company's six core values. By separating performance discussions from compensation decisions, Razorpay ensures feedback remains development-oriented, fostering a culture of open communication and mutual learning.

At Razorpay, we prioritize our employees above all else, striving to cultivate an environment where they feel valued, respected, and supported. This commitment is fundamental to our vision and mission. Our recent transformation of the performance management system embodies this dedication. This shift goes beyond mere procedural change; it involves embracing change as a propeller for innovation and excellence. By shifting from traditional, twice-a-year reviews to ongoing feedback and development, we empower our teams to thrive. Our holistic approach fosters a culture of open communication, mutual learning, and continuous growth, driving excellence across the organisation,” said Chitbhanu Nagri, Senior VP, People Ops, Razorpay.

Levelling the playing field: Objective evaluations and growth opportunities

As part of the revamped performance management process, a new objective rating scale was also introduced by the company to offer employees clearer insights into their performance. Replacing the outdated rating scale, the new rating system makes it easier and more efficient for managers to evaluate and reward performance with greater accuracy and transparency.

The results are evident. Calibration, which used to consume a substantial 40% of the process, has been cut down to a streamlined 16-18%. This not only frees up valuable time for managers but also ensures more objective evaluations.

Furthermore, peer feedback, once confined to annual reviews, has become a continuous process. This shift allows for real-time insights and fosters a culture of ongoing learning. By incorporating feedback from colleagues alongside manager evaluations, Razorpay creates a more holistic picture of employee performance and opens doors for targeted growth opportunities.

Conclusion: Setting a new standard

Razorpay's journey towards redefining performance management is a testament to its commitment to employee welfare and development. By embracing a more agile and employee-centric approach, Razorpay is not only setting a new standard for performance management but also redefining the future of work in the industry. As the organisation continues to evolve and grow, its focus on employee welfare and development will remain unwavering, driving sustainable growth and success in the years to come.

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Topics: Performance Management

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