Article: Best People Practices - Part 5: Fairness in Performance Management

Performance Management

Best People Practices - Part 5: Fairness in Performance Management

People Matters and Great Place To Work® Institute partner again for spreading lessons from the best people management practices at some of the best workplaces in India
Best People Practices - Part 5: Fairness in Performance Management

Most often, employees see the appraisal as a tick-in-the-box exercise, which is open to manipulation and unfairness


Performance appraisals have for the longest time been the main bone of contention between managers and employees. It was always deemed to be unfair. There is a well-validated relationship between fairness and individual commitment to the role and organization. Most often, employees see the appraisal as a tick-in-the-box exercise, which is open to manipulation and unfairness. In this category, the objectives of the study was to identify the barriers to effective performance, the fairness of PMS and measuring its effectiveness. The featured organizations in this category are: Radio City 91.1 FM, InterContinental Hotels Group, Godrej Agrovet Ltd and B. Braun Medical (India) Pvt. Ltd.


B. Braun follows a top-down approach for goal setting, which is done one-and-a-half months before the calendar year end. It is followed by the Business Unit (BU) meeting where the goals for each sub-department, zone, location, manager is set and then cascaded to the individual. Performance reviews take place in July and January and the goal sheet is communicated to the employee within a month of joining. The one good part about the review process is that there is a minimum tenure to be eligible for performance review and pay incentive.

Each Business Unit (BU) is evaluated based on their performance and BU wise different bell curve is made which will decide % of ‘A’, ‘B’ and so on in a department. The increment matrix is made level wise & rating wise which is uniformly applicable to all BUs. This removes reporting manager’s bias, prejudice, favouritism, rating bias, skewed score (as ranking principle is followed). This process is centrally executed by HR. At Godrej Agrovet, all businesses work out Annual Operating Plans (AOPs - for the next year) and Long Range Plans (LRP - for next 3 years) in December every year.

Then business unit along with HR work out which all functions are required to contribute to the listed initiatives and cascade it down to the respective teams. The goal setting process is first done with the HOD, who shares his goals and objectives given by the Board of Directors/Shareholders or stakeholders with the top management team who in turn percolate it down the line. With this, the employee starts his/her goal setting process considering the HOD’s goals and objectives. The employee is measured on a 5 point rating scale. In case the goals of the employee are modified, the supervisor takes the employee into confidence. Besides regular meetings and informal monthly meetings, Godrej Agrovet also puts importance on coaching and L&D for enabling performance. The goal setting for the new employee is done three months after he joins the company as it will give him enough time to settle down. The performance appraisal not only looks at what the employee has achieved, but also how they have achieved it.

At InterContinental Hotels, the individuals set it for themselves based on their job descriptions linking it with their manager’s goals and business priorities and it will detail the individual contribution to the company. Since it is set by the individu-als themselves, it is a fair goal setting to start with and also gives them a fair chance to decide their development plan. Then, it is sent to the manager for approval. Once approved, team members submit a personal development plan. Subsequently, during the mid-year and the annual review, performance is assessed. IHG has a Global Recognition Program called Bravo for all its employees to increase engagement and celebrate success.

At Radio City, the goal setting exercise is a participative process where the CEO and the Senior Leadership team involve the frontline, middle and senior management through a series of workshops. This process starts two months before the next financial year i.e. February so that the Strategy and Functional goals are set before the beginning of the year. All employees take part in drafting the strategy with the middle management and the senior leadership team. The CEO conducts a town hall and takes the entire organization through last year’s achievements and areas where they have not done well. The current financial year’s strategy is then shown, which is subsequently cascaded down to teams. In the case. of new joinees, KRAs are communicated within seven days of joining.  

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Topics: Performance Management, Strategic HR

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