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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Goldman Sachs had discontinued the annual performance reviews during the pandemic, but now it is resuming the same, considering the economic slowdown.

In June this year, the Bank had a 47,000-strong workforce, higher than the 41,000 it had last year. The financial institution has posted a 48 per cent reduction in quarterly profits.

Annually, the Bank is known to resort to strategic resource assessment or SRA, wherein about one to five per cent of the workforce is asked to leave based on their performance.

In July 2020, amidst the pandemic, the Bank had introduced a new grading system, which also required staff to undergo performance checks with their team leads and bosses at least thrice a year, with effect from 2021.

At the time, the Bank had expected one in every four employees to ‘exceed expectations’, and two in three to ‘fully meet expectations’. It had expected that only about 10 per cent of the low performers will fall under the ‘partially meets expectations’ category.

The Bank had, however, also maintained that this new system of performance management will only provide new opportunities for transparency in communication, feedback and coaching, and that it would not promote job cuts.

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The earlier process entailed a lot of work on the part of the employees as well as their managers, in terms of assessments, self-assessments and even a 360-degree feedback from co-workers.

Now, the onus will be on managers to review performance and give promotions rather than peers, although employees can seek promotions twice a year.

Simply put, while Googlers may receive feedback from their bosses or managers throughout the year and may even discuss how their careers will develop or progress, they will be rated on their performance only once a year.

The revamped promotion system will require completion of an assessment form by the employees’ managers/bosses stating whether the employees possess the skills required for them to be promoted.

Employees will no longer have to fill out lengthy forms containing reviews by managers and colleagues.

Googlers will be rated on a new scale containing five levels of ‘impact’ that the employees are creating — starting with ‘not enough impact’ and going on to ‘ moderate impact’, ‘significant impact’, ‘outstanding impact’ and ‘transformative impact’. Most Googlers will be part of the third or middle level, that is, ‘significant impact’.

The earlier performance review system was considered to be too time consuming by Googlers.

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