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This essay analyses how motivation could help companies to improve the performance of poor performers. One of the largest Indian software companies has rated 2200 of its employees as under performers, which is 2.2% of its staff base (Fe Bureau, 2009). This is the case with most software companies. Patni, sixth largest software exporter laid off 400 employees citing non-performance issues (Shivapriya & Thimmaya, 2008). This essay will analyze the need for motivation through one of the leading global providers of Information Technology (IT) services, Patni computer systems Ltd (Patni), criticizing their current policies adopted to motivate their employees particularly their appraisal system, comparing it with its peers and with the reputed theories. This essay starts with the effects of poor performance, critically analyses the appraisal scheme and provides suggestion to improve employee and corporate performance.
Effects of poor performers
Maier (1973) states that Performance is a multiplicative product of an individual's ability and his or her motivation. Company recruits an individual only when he or she meet their expectations, technically speaking if people are selected only after testing their ability through interviews, poor performance might be due to other facts. If the recruitment process is good enough and employees have the technical ability to work, company could seriously think of finding reasons behind non-performance issues. Poor performance of an individual will affect the company's performance. Companies are laying off the underperformers for compensating the losses. Company could think of revamping the existing policies and strategies to motivate its employees and effectively make use of their resources.
Once a company recruits a person, he or she will be given initial training before actual work. Once company decides to lay off an employee, amounts spend on training the person would go in vain. If company decides to recruit a new person for the same job, it has to again invest to bring up the new person. Instead it would be better to motivate existing staff and make them more profitable, company would have loyal employees too.
Appraisals have the power to motivate employees; when well designed it has a strong motivational impact (Lloyd, 2009). Patni's annual appraisals serve as a means to motivate employees but there are some setbacks in the appraisal process as mentioned below.
Appraisal scheme of Patni
Patni currently follows Individual development Plan (IDP) for its annual appraisals. First employee should fill the IDP form mentioned in Table 1.
Details to be filled in
Projects &Assignments handled during the year
Projects handled, responsibilities in the projects.
Projects &Assignments performed or not performed to your satisfaction and reasons for the same
Naming the projects which were performed or not performed to the satisfaction and the reasons for the same
Corporate Contributions/Additional Responsibilities
Details of corporate contributions like conducting training, interviews, knowledge management
IDP (Last year)
Last year's development plan and the extent to which the plan was met
Additional qualification / Certification acquired
Details of any additional qualification and certifications
Facilitating and Inhibiting factors that have helped / hindered performance
Details regarding any facilitating and inhibiting factors.
Support required from organization
Details of the support required
Table 1: IDP form
Every employee in the organization submits his IDP at the end of calendar year. Supervisor will then review the plan and provide his feedback in the format mentioned in Table 2.
Feedback for X employee
Technically sound, fast learner, dedicated, flexible.
Identified Improvement Areas
Short term development plan
Communication skills through training
Long term development plan
IDP overall feedback
Do you agree with IDP
Table 2: Feedback
In the annual appraisal cycle of Patni, employee gets limited chance to express his views as shown in Table 1. First, an employee could not set any personal goals and prove the level of achievement either to the management or to himself. Locke and Latham (1990) states in the goal setting theory that if the goal is specific and difficult, it will lead to higher level of performance than vague goals. But in Patni the development plans are vague. As mentioned in Table 1, employee could just mention that he would require additional training or guidance from the seniors and organization. Even when employee wants to improve his/her verbal communication skills and put forth them as a support required, it may not be approved as a goal if it is not inline with corporate performance expectations. This might result in vague goal setting, which hurts employee morale and affects his/her performance.
Second, employee doesn't get feedback specifically for every development plan that was suggested last year, he just gets overall or generalized feedback as shown in Table 2. Employee would just be in a position to agree/disagree with supervisor's feedback. If the feedback remains vague, individual would be likely to maintain his/her existing performance level (Locke and Latham, 1990). For example as shown in Table 2, where an employee gets a generalized feedback to improvise on communication skills, he/she doesn't get a clear picture on whether he/she has to improve his written, oral communication or presentation skills. The employee's progress on achieving the goals is not timely monitored through a scale, so employee couldn't get any timely feedback. Employee should know whether he/she is progressing on right direction. There is no benchmark here, managers just want the employee to work harder and evaluation would happen on annual basis as shown in Table 2. Locke and Latham (2002) states that urging people to do their best will not lead to higher performance.
There are some demerits of goal setting theory too, when goals set are unfair or unreachable, it would cause problems rather than solving poor performance (Vroom and Deci, 1992). Though there are some demerits, goal setting theory has proven successful. Locke and Latham (2002) specifies that with goal setting theory, specific difficult goals have been shown to increase performance on over 100 different tasks involving more than 40,000 participants in 8 countries.
Suggestions to improve corporate and employee performance
Wipro Technologies, started almost around same year (1980) when Patni was started, follows Goal oriented approach for its appraisal mechanism (Vijayakumar, 2009). Wipro has a massive staff base of 95000 employees (Wipro, 2009) and stands as No.2 among software companies in India (Rediff, 2008), which adds credit to goal setting theory. Patni could improvise on the appraisal format to overcome the limitations like giving specific feedback, setting up specific and difficult goals as mentioned above and follow effective goal setting theory which was successful in Wipro. Wipro technologies rewards its employees on the spot with an award called "feather on my cap" when they achieve some remarkable tasks (Vijayakumar, 2009) that serve as an excellent motivating factor.
HCL, started in 1976, stands second in the list of preferred employer as reported by Dataquest survey (Kekre, 2009). It stands first in Best Employers in India Survey (Hewitt 2009). HCL has a new philosophy called "Employee First, Customer Second", it was termed as "The most modern management idea" by Fortune (HCL, 2009). It runs a comprehensive career-planning program where each employee is empowered to plan desired career path (HCL, 2009). It opens a 360-degree feedback mechanism where employee rates managers and the results are highly transparent (HCL, 2009). Many such policies keep HCL at a higher position. Therefore Patni could even follow 360-degree feedback mechanism that is successfully followed in HCL or can even tailor the policies as per the company needs.
Referring to the above figure 1 as reported by Dataquest survey (Kekre, 2009), Patni has scored attrition rate of 65.2 percentage in relative to the top company's (Hexaware Technologies) attrition rate. Infosys, founded in 1981 was included in India's top 50 best companies to work for - 2009 (Great Place To Work, 2009), whereas Patni started in 1978 couldn't get a place in the list. Infosys was able to increase its staff base from 7 employees in 1981 to 105453 employees in 2009 (Infosys, 2009), whereas Patni just reached around 14500 employees in 2009 (Patni, 2009). Infosys is an open and transparent environment where employees can reach the top management and the top leaders frequently interacts with the employees at all levels which gives employees a sense of satisfaction that their good work would be noticed (Baruah, 2009). Infosys staff growth validates the importance of motivation.
Patni remains competitive
Though there are such gaps between the employees and employer, Patni still holds a place in top 10 IT companies in India (Rediff, 2008) and able to maintain its employee strength over the years. Patni has good schemes like rewarding its employees quarterly with variety of awards like valuable contributor awards, excellent performer awards (Kandasamy, 2009). Patni facilitates its outstanding employees during annual event. People are taken out for a dinner party/outing after successful project completion. Patni conducts fun filled events during festive seasons. Such activities really motivate their employees. Long term and short term development plans identified by the supervisor during appraisal cycle have a specific time frame, which would urge its employee to plan and execute the plan within a boundary.
Patni is still competitive with its peers who have started their ventures around same period as Patni. Patni facilitates its outstanding employees, conducts various fun filled events to motivate its employees. It could follow 360-degree feedback mechanism that was proven to be successful in HCL. Patni could give provisions for setting specific, difficult goals and specific feedbacks in appraisal process that are proved to be successful as mentioned by Locke and Latham (2002). It could think of revamping some of its existing strategies and make it more productive enough as mentioned so that it could serve as a big motivating factor for its employees. Motivation would not only help under performers to perform better but also maximizes the productivity of existing good performers. Patni with good staff base, good long standing reputation could definitely be market leaders in near future if it could revamp its policies.
There are some good ideas here and the beginning of a potentially very good assignment - but its overcomplicated. You need to much more clearly and directly state the specifics and details of the motivation issue a Patni (all the discussion of performance issues largely seem to detract from this) and in doing so I think it is a good idea to focus on the application of the appraisal system - but you must explain what the issues are anmd them discussion, commentary and imporvemenst drawn from literature can be brought to bear on these - again as specifically as possible. The level of detail lacking makes your conclusion rather difficult to validate.
You also need to think about the voracity of sources used and are they appropriate to support the conlusions you make of them - especially some of your web sources.
References: NO numbering - make sure these follow Hravard conventions
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Â By Kenneth Lloyd
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