Infosys Too Revamps Employee Appraisal System

by CXOtoday News Desk    Feb 08, 2016

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To give a boost to CEO Vishal Sikka’s ‘new and renew’ strategy that leverages ”design thinking” Infosys is doing away with bell curve appraisal system and is bringing a new incentive structure called iCount as part of its performance appraisal system. Under iCount, employees will be rewarded on specific short term targets and will be given feedbacks throughout the year.

Under the new system, employees will be offered feedback and subjected to reviews throughout the year rather than just an annual appraisal. “Infosys has changed the way performance management is done, with higher focus on individual performance rather than relative performance. We have moved away from forced ranking curve and given our managers more flexibility and empowerment, while still retaining focus on maintaining a high performance culture,” a senior spokesperson told ET.

In September 2015 the company said it will discard the bell curve method that fits categories of performers into a certain bracket depending on whether they have met their targets.

According to experts, the new system at Infosys is somewhat similar to Checkpoint, the appraisal system put in place by global tech giant IBM, which does away with annual appraisals and focuses on targets throughout the year. Accenture, too, gave up the bell curve system last year. Other tech companies such as Google, Microsoft, Adobe, KPMG and Accenture which have discarded the bell-curve or similar mechanisms for conducting annual performance appraisals of their employees.

Typically, the bell-curve mechanism segregates all employees into distinct baskets-top, average and bottom performers - with the vast majority being treated as average performers. With the changing business and HR models in today’s digital era, the bell-curve rating mechanism is no longer an effective method, simple because today goals are no longer pushed from the top level to the bottom, but emerge through collaboration and are the result of a dynamic interplay between levels and various parts of the organization.

“Enterprises must focus on enabling people—consumers, workers and ecosystem partners—to accomplish more with technology. They will have to create a new corporate culture that looks at technology as the way to enable people to constantly adapt and learn, continually create new solutions, drive relentless change, and disrupt the status quo,” said a recent Accenture report. In an age where the focus is locked on technology, the true leaders will, in fact, place people first, it said.

To follow the typical bell-curve, often good performers were labelled as average to fit the curve,” explains M P Sriram, partner at Aventus Partners, a HR consultancy and talent acquisition firm in an interview with ET. The system was increasingly getting replaced by other innovative practices. For example, KPMG in India discarded the bell-curve and introduced a real-time feedback approach, offering employees an instant feedback. Experts believe that application of the bell-curve doesn’t suit a knowledge-driven workforce.

Other Indian outsourcing firms are also starting to take a fresh look at their employee appraisal systems. “Today, the entire appraisal process is making a shift towards how we develop people, rather than say what you have not done,” Saurabh Govil, chief human resources officer at Wipro said in a post-earnings interview in January.

On view of that it was essential for an IT major like Infosys to renew its appraisal system to remain competitive.