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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We live in an age where life is on a treadmill. We have to keep running to maintain our position, else risk falling. Work hours have become longer than ever, and decisions at work are made real quick! Hence, we are expected to act swiftly on each and every task that lands on our desk, on each thought that crosses the mind. Simply put, one has to stay alert always.

In this action-filled highway, many of us lack the time and space to pursue our areas of interest beyond work. At times, we need some space to recharge and return to running the marathon again, with renewed vigour. The sabbatical has become the innovation of the decade in HR circuits to help keep this action-filled highway free of accidents.

Organisations allow their employees take a break from work to pursue whatever they feel strongly about. It could be volunteering, entrepreneurship, writing a book, making a film, higher studies or just tuning into a pastime that could enrich life at work. This policy has proved to be a great tool for HR managers and line managers to retain and engage their high performers. Some organisations offer this as a paid sabbatical to their high potentials and strengthen their employer brand. The central idea is to communicate how much they value their key talent.

At SAP Labs, over 90 per cent of the employees who have availed the facility claim to be better motivated. Hence, they are more likely to spread a positive word of mouth. Further, these employees delivered higher levels of customer satisfaction. The employees who performed jobs of their interest while on sabbatical, exhibited better leadership skills, team spirit, problem-solving abilities, cultural awareness and other soft skills.

Raghuram Rajan is one of the most recent examples. He was the Professor of Finance at the University of Chicago for nearly seven years and has been on a sabbatical to be the Governor of RBI for three years!

Several other organisations around the world have adopted such an employee-focussed approach.

Industry sectors, such as services, education, healthcare, research, government and social work have used the sabbatical as an effective motivational method for long. Raghuram Rajan is one of the most recent examples. He was the Professor of Finance at the University of Chicago for nearly seven years and has been on a sabbatical to be the Governor of RBI for three years!

Social sabbatical refers to indulging in social work while staying away from the regular schedule at work, doing something valuable for the society—working with the challenges of the underdeveloped world, preserving the natural resources under threat or trying to work with groups to combat a social evil. Whatever the activity or situation may be, people get a chance to learn several life skills first-hand and also significantly broaden their horizons. In roles involving creativity, leadership, innovation, cross-cultural working and social sensitivity, a person is required to possess a wide perspective of the diversity existing in the world. Skills and abilities, such as listening intently to different stakeholders and appreciating their points of view; courageously accepting one’s limitations and using one’s strengths efficiently, are truly advantageous. HR folks in organisations need to create opportunities for their high-potentials in such a way that they are aware of their strengths and limitations, confident of their abilities, sensitive while dealing with their stakeholders, and spirited enough to ride the waves that confront them.

In an environment away from work and colleagues, a person drops all inhibitions and is not afraid to take risks or fail. The stakes are high but the enormity of the situation does not unsettle the person. While the learning is definitely fast, it is also deeply ingrained in the learner’s character.

A social sabbatical allows the person to be exposed to all of these challenges and learn with humility. In an environment away from work and colleagues, a person drops all inhibitions and is not afraid to take risks or fail. The stakes are high but the enormity of the situation does not unsettle the person. While the learning is definitely fast, it is also deeply ingrained in the learner’s character. The impact is visible at work rather quickly. Not only do the individuals experience a sense of achievement but also build a deeper connect with the community they live in along with a long-term orientation in their mind.

In today’s world, not only has the average tenure of a CEO declined but even the stock markets have been increasingly punishing of a CEO in case of a blip in performance. While it is clear in this context, that long-term orientation is not the second nature of any CEO, for the sake of the organisation’s sustainability and purpose, it is critical for the leader to thinks of the longer term. This is yet another reason why the social sabbatical is a great idea!

No wonder many progressive companies have embraced this tool to retain, develop and engage their key talent. Although it demands tremendous commitment from the Board, to make such a huge investment in the company, those doing it help their organisations leap from ‘good’ to ‘great’!

(The author is a senior HR professional.)

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