Business Process InnovationIS 684 101

Employee Appraisal ProcessA 360 Degree Approach

Presentation By:Agarwal TejasKhator Garima

Lal Nirupma

Outline

Business Problem Definition

AS-IS Situation

Work System Snapshot

Problem Scoping Diagram

Gap Analysis

TO-BE Situation

Why 360

Applying Work System

Theory

Recommendations

Challenges

Cost Estimate

Business Problem DefinitionABC corp. is experiencing a high employee

turnover rate of almost 30% as compared to market average of 18%.

More experienced and higher skilled employees are leaving the company.

Employees disappointed with the performance appraisal system at ABC corp., which leads to demotivation.

Overall Productivity and Performance of the company is at an all time low.

We want to change the employee appraisal method to 360 degree evaluation to improve employee morale and reduce turnover.

Business Problem Definition

It will cost us $2.25 million to obtain the new IT tool.

Risks and mitigation strategies are outlined later.

We will save $15,275,000 over the next 5 years in tangible measures.

Therefore, the results of the change will deliver a significant ROI and the change is worth making.

AS-IS Situation

 

Line M

anager

Pro

ject

Man

ager

Em

plo

yee

AB

C C

orp

.

HR

Start

Set Goals for the appraisal cycle

6 months

+

Review progress against goal

Rate Performance

+

Conpare ratings with other employees

Compute final rating

+

Enforce policies and adjust compensation according to rating

End

Work System Snapshot of As Is ProcessCustomers Products & Services *Employee *Project Manager *Line Manager

 *Performance appraisal for each employee *Half yearly rating of each Employee *Final year rating of each Employee

Major Activities or Processes *Goal setting done by the combination of Employee and Project Manager at the beginning of the year

 *After 6 months Employee reviews his performance and rates himself *Project Manager reviews the performance of the Employee and gives his half yearly rating and stores it in the Reward System Database *At the end of the year Line Manager retrieves the Half yearly rating of employees belonging to the same designation across the project and compares it. *Line Manager compares the performance of all Employees and gives individual rating and stores that rating in the Reward System. *HR enforces policies to resolve any ambiguities, regulations regarding the Rating methodology and feeds it into the Reward System Database.

Participants Information Technologies*Employee *Project Manager *Line Manager *HR

*Half yearly rating of the Employee *Final year rating of the Employee *Policies that are provided by the HR to rate each Employee.

 *Computers and hardware. *Rewards Database System *Performance Appraisal System

Problem Scoping Diagram

Gap Analysis

To-be Situation

360 Degree Feedback 360 degree provides an overall assessment of

the employee. Involves feedbacks from a number of people around him, who actually deal with the employee each day.

Manager Customers

Peers Subordinates

Employee

Why 360 Degree???

For the Employees Accurate and Fair Performance Measurement Give broader and accurate perspective of employees

For the Team Foster healthy competition amongst team mates.

For the Organization Fair and Impartial evaluation process Increase in employee motivation and job satisfaction Improvement in skills and competencies of employees Overall increase in company’s productivity

Applying work system theory

Principle #1: Please the customers

Principle #5: Encourage appropriate use of judgments

Principle #7: Monitor quality of Inputs and Outputs

Principle #10: Serve the participants

Principle #11: Align participant incentives with system goals

Principle #15: Use appropriate technology

Principle #21: Control the system using goals, measurement, evaluation, and feedback

RecommendationC

lient

Proj

ect

Man

ager

Empl

oyee

AB

C C

orp.

HR

Set Goals for the appraisal cycle

6 months

Compute final rating

+

Enforce policies and adjust compensation according to rating

End

Peer Employee review involved in same project

Project Manager Rating

Client Review

+

Design review questions

Start appraisal process

Challenges involved in Implementation

Loss of power may lead to resistance by Project as well as Line Managers.

Resistance from employees to invest their time in filing up the feedback evaluation forms.

Lack of trust and communication may still lead to an impartial review.

Top Management role VERY IMPORTANT for 360 degree proper implementation.

Cost Estimate

Current cost of employee turnover in ABC Corp. = $13,950,000

Total cost of adopting and running 360 degree evaluation tool for 5 years = $12,625,500

New Cost of employee turnover in ABC Corp. = $8,370,000

Reduction in employee turnover cost per year = $5,580,000

Total Savings in employee turnover cost over 5 years = $15,275,000

Unmeasurable benefits: Priceless!

THANK YOU