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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