Sterlite’s solution was a bold three-pronged attack, shattering the mould of traditional appraisals. Transparency, fairness, and individual growth became the cornerstones of their new system. One of the first things to go was the dreaded bell curve. No more categorising employees against each other in a fight for limited rewards. Instead, Sterlite focused on rewarding absolute performance. “Someone exceeding their goals by 115 per cent gets acknowledged for that achievement, not compared to someone else,” explained Pande. This eliminated the time-consuming debates about rankings and ensured everyone who met or exceeded expectations got rewarded.

But fairness wasn’t just about the present. Sterlite understood the importance of investing in the future. Their ‘Job Worth Model’ meticulously evaluated the market value of each role, ensuring salaries reflected not just current worth but also anticipated future demands. This helped mitigate the risk of losing talent to competitors offering better compensation. It was a future-proof strategy that recognised that a satisfied and valued workforce was the backbone of any successful organisation.

“The potential for higher increments based on increased proficiency fuelled a growth mindset within the organisation. Employees were no longer cogs in a machine; they were valued partners whose development was seen as an investment in the company’s future.”

Ruhie Pande,  group CHRO, Sterlite Power

Next came the expertise factor. Sterlite recognised that continuous learning and development were crucial not only for individual growth but also for the company’s continued innovation. Employees were assessed based on their current skill level, from beginner to expert. This not only recognised their contributions but also incentivised them to keep learning. The potential for higher increments based on increased proficiency fuelled a growth mindset within the organisation. Employees were no longer cogs in a machine; they were valued partners whose development was seen as an investment in the company’s future.

But potential wasn’t ignored either. Sterlite used a robust ‘talent-assessment process’ to evaluate an employee’s potential, ability, and overall fit. This multi-layered approach ensured consistency and fairness in assessing potential across the organisation. Variable pay, with the possibility of earning up to 150 per cent, was directly tied to this assessment. Here, Sterlite was acknowledging that some individuals possessed the drive and talent to excel beyond their current roles. By identifying these high potentials and rewarding their potential, Sterlite was investing in future leaders who would drive the company forward.

The linchpin of this system was the OKR (objectives and key results ) methodology. OKR ensured everyone, from top to bottom, understood how their individual goals contributed to the company’s overall objectives. There was no cap on variable pay, further motivating employees to strive for excellence. Production goals cascaded down from top-level profitability objectives, ensuring everyone was aligned towards a common purpose. Imagine a well-oiled machine where every part functioned seamlessly to achieve a greater goal. That’s what Sterlite was striving for – a company where individual ambition and purpose were harnessed to drive organisational success.

This new system wasn’t without its challenges. Rewarding potential was a leap of faith, and ensuring accurate talent assessment was crucial. Budgeting also required adjustments, as there was no longer a system of ranking and elimination. Open communication with employees was paramount to ensure a smooth transition. However, Sterlite successfully navigated these hurdles, and the feedback from employees was overwhelmingly positive. They felt valued, heard, and invested in, a stark contrast to the often-negative sentiment associated with traditional performance reviews.

The company’s commitment to continuous improvement didn’t stop there. Regular benchmarking ensured they stayed ahead of market trends in compensation and performance management practices. Variable pay was awarded twice a year to reflect market fluctuations, keeping employees engaged and focused on delivering results throughout the year. Looking ahead, Sterlite planned to digitise the entire appraisal process, catering to the mobile-first preferences of the younger generation. The goal? To streamline discussions and focus on providing valuable developmental feedback, not just debating performance metrics. Performance reviews, once a dreaded formality, were being transformed into meaningful conversations about growth and development.

Sterlite Power’s innovative approach to appraisals proved that performance reviews could be a tool for growth, not just a box-ticking exercise. By focusing on transparency, fairness, and individual development, they created a system that benefited both the company and its employees, ensuring they remained a leader in the ever-evolving energy sector. In a world where the only constant is change, Sterlite had embraced a performance management system that was flexible, adaptable, and future-oriented, positioning them for success in the years to come.

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New technologies, new generations and newer ways of working are redefining the modern workplace. These are times when everyone expects to work in an environment that’s open, flexible and enabling. Although the world of work is rapidly moving towards automation and technology-enabled modern ways of operating, there are certain practices that are still holding back organisations in various ways and may not necessarily be required now.

Such age-old, worn-out practices at the workplace may consciously or subconsciously be impacting the workforce in unforeseen negative ways, demoralising employees, thereby hampering optimum performance. The challenge, however, is that in most cases, despite the realisation, organisations or HR hang onto these practices —simply because they have been doing it that way forever. However, there certainly are things that need to change if organisations are to survive the test of time. For the wellbeing of organisations and workforces, the things that HR really needs to get rid of are:

1) Annual performance reviews or rankings: In times of instant or real-time feedback, be it on social media with the instant likes or dislikes or shares across large networks, annual reviews at the workplace make no sense. What exactly is the point in discussing something a year later? Discuss and act ‘now’ when there is still time to improve upon and enhance outcomes. In addition, treat your employees as responsible adults and not school kids, who would require annual testing for promotion to the next grade. Annual performance reviews are pointless, insulting and culture-killing programmes that almost all smart companies are ditching now while switching to real-time feedbacks and discussions on performance.

2) Attendance record-keeping: While employees work from anywhere anytime, the concept of attendance also needs to change. In blurring boundaries between the usual work-hours and non-work-hours, it is foolish of organisations or HR to keep tracking attendance in the conventional ways. The benchmarks could now be about task completion or KRA achievements in a stipulated timeline.

3) Monitoring work hours: HR cannot afford to keep a close watch on employees, monitoring their hours spent working as work and life now blend together for most people. Although there are technologies and tools to keep track of employee work hours and productive time spent working, it is a turn-off for most people if HR consciously keeps track of when employees arrive and depart from work, but ignore the hours they spend working overtime or taking work home.

4) Enquiring about past salary: One’s past salary is private and confidential information and HR has no right to know the same or judge a person’s capabilities based on the same. In fact, it shows an HR manager’s inability to judge candidates based their talent. Pay for what people are worth and not what their past salaries are worth. Moreover, do you tell job applicants how much you make, or how much the manager that wants to hire them makes, or how much the last person in the job was paid? If an HR professional needs to know what another employer paid someone in order to judge what their company should pay them, then they’re worthless in the hiring process, as HR is all about judging the value of workers.

5) Treating human resources as human capital: Employees or human resources are an organisation’s asset, the foundation that makes the organisation stand strong and emerge successful. However, HR need not treat people like they’re numbers in a Power Point presentation or ‘human capital’ that can be sold off like a stock that’s in free fall. They’re humans after all, with emotions, families, fears and aspirations for the future. They need to be respected for their contribution to the workplace. For people who choose to invest their time and energy in the organisation, HR needs to understand and agree that the organisation’s success is all about people.

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