Employee to be evaluated not just by superiors, but also by peers, subordinates

S. Muralidhar
ChennaiFeb. 4It would seem that there is no corporate human resources policy that has not had its
share of controversies for being biased. With an increasing number of qualitative factors that affect
employees at the workplace, democratising the performance appraisal process to make it as fair as
possible has been the dream of every HR manager.
And now qualitative factors are not just at play in the services sector, but also in manufacturing.
With cubicles giving way to open offices, the top-down approach to employee performance appraisal
is also on its way out.
One company that has set itself on course to further democratising and opening up its employee
evaluation process is car market leader Maruti Udyog.
The company has introduced a unique 360-degree feedback system, starting with its senior
leadership. The new system has been co-developed with Ernst & Young and has been put in place
recently.
Under the 360-degree feedback system, the employee is rated not just by his superiors, but also by
his peers and subordinates.
"We are starting the 360-degree feedback process with employees in the top management such as
chief general managers and general managers, whose performance will now be assessed based on
feedback from their peers and junior management employees within the same department. Till last
year, their performance was being appraised only by the Directors and the Managing Director," says
Maruti's Chief General Manager (HR), Mr S.Y. Siddiqui.
Ernst & Young, in consultation with Maruti, has listed a set of leadership competencies that are
expected in a general manager. Based on that, it has prepared a questionnaire to which peers and
subordinates can respond online.
Although acknowledged as an effective tool for leadership development in the West, Indian
companies have been shy of introducing such a feedback system for fear of disturbing traditional
hierarchical structures.
HR consultants feel that the critical issues in implementing such a system include assuring
respondents that their feedback will remain confidential and convincing the person receiving the
feedback that this is a development tool and not an appraisal tool. Maruti has handled this by getting
E&Y and other consultants to make detailed presentations to the senior management personnel
before the process got under way. The company has a committee of general managers, called Human
Resource Inter Divisional Committee (HRIDC), which is consulted on all major HR issues.The
initiative has been unveiled with an e-mail by Maruti's Managing Director, Mr Jagdish Khattar,
asking people to support the online questionnaire process. The 360-degree feedback system will also
include a self-appraisal by the general manager. At the end of the process, he can compare his selfappraisal with the assessment of his subordinates and peers.One of the benefits that Maruti is hoping
to get out of the 360-degree feedback process is the sense of empowerment and importance felt by
subordinates, when they are asked to offer their feedback about their superiors. Maruti currently has
over 4,000 employees on its rolls.

Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an automobile manufacturer in
India. It is a subsidiary of Japanese automobile and motorcycle manufacturer Suzuki Motor Corporation
(This article was published in the Business Line print edition dated February 5, 2007)

(The Hindu Business Line, 2007)

Business Times
High performance management: Aspiring to be Toyota or General Electric
By Harinda de Silva
In todays highly competitive business environment, every organization wants to be the next Apple or Toyota or General
Electric. What is so special about these global giants? Apart from being massive global brands, these three organizations are at
top of the game when it comes to running their individual businesses. These organizations are among the best high performance
organizations in the world today.
Today many organizations are trying to move in to high performance business models from the traditional models to be more
effective than their competitors in the market place. Although there is no definitive definition for a high performance
organization, such an organization is distinguished from a traditional organization by being an organization that keeps
continuously adjusting to the external conditions to maximize its performance.
This is achieved by todays high performance organizations such as Toyota and General Electric by managing and empowering
their people differently than in a traditional organization.
Toyota Motors
There is a common Japanese saying in Toyota which goes as mono zukuri wa hito zukuri which translates to English as
making things is about making people. This simple statement gives us a good indication regarding Toyotas philosophy on the
Human Resource (HR) Management and the importance it places on developing its people.
Toyota is world renowned for its famous Toyota Production System (TPS), which is the Toyotas version of a high performance
business model. Toyota is the benchmark for many high performance business processes such as Lean Manufacturing and
Continuous Improvement (Kaizen) Practices. All of these are components of the TPS.
However in the core of this successful model lies a strong culture of developing its people to their fullest potential and to make
them strong followers of the TPS. Hence they can be the drivers of TPS in the organization. Many elements of the TPS such as
Kaizen (a continuous improvement process) and 5S practices (a Japanese system of good housekeeping in the workplace)
cannot be imposed upon the employees by force. Even if an organization tries to make their employees follow these practices
only through rules and regulations, the final outcome will not be successful and such practices will not be sustainable in the long
term. Therefore the employees need to be developed to embrace these practices on their own.
Within its factories and offices across many countries, Toyota uses every available opportunity during its day-to-day operations
to develop its people towards this goal. Apart from the formal classroom type training given to the employees when they first
join a Toyota plant, everyday events such as issues in the shop floor and resulting PDCAs (Plan, Do, Check, Act A tool used in
problem solving in TPS) enables the employees to learn continuously.

Another core element in the Toyota culture is that it expects all its managers to be teachers.
The long term commitment Toyota has made to develop its human talent is evident from the first principle of the 14 guiding
principles defined in the Toyota Way. The Toyota Way is considered as the authoritative guide to TPS to all outsiders of Toyota.
Their employees learn and develop the skills required to practice various elements of the TPS. They are the ultimate drivers of
the TPS and the teachers to the next generation of employees.
General Electric
Similar to Toyota, General Electric too makes a strong emphasis on the importance of having a high performance workforce to
drive GEs high performance business model. As Jack Welch, the legendary former Chairman and CEO of GE said in his first
address to the Wall Street analysts in 1981, he wanted GE to become the most competitive enterprise on earth, where people
dare to try new things, where people feel assured in knowing that only the limits of their creativity and drive, their own
standards of personal excellence, will be the ceiling on how far and how fast they move.
How GE harnesses its human resources to be one of the most competitive enterprises on Earth can be broadly divided into two
areas. First of these areas is the Training and development of GEs talent. Generally GE attracts the brightest of talent for their
entry levels rolls. However GE has rarely hired from outside for their top or senior level positions. Therefore GE has a very
good system in place for training, developing and grooming their people to grow with the organization. These employees will
eventually fill the senior ranks of GE and they will ensure the sustainability of GE as a high performance organization.
The second area in GEs process of harnessing its HR is the stringent performance management system.
The performance management process at GE consists of a forced ranking system of its employees to groupings of 20:70:10.
These groups are categorized as the Top 20, Vital 70 and the Bottom 10.
In this Vitality Curve as it was called by Jack Welch, the top 20 are the top performing employees of the organization and they
are generally earmarked for further development and to rise up the leadership ladder. Vital 70 are the competent performers who
continue to perform at the required level. The bottom 10 consists of the poor performers of the group and generally they were
shown the door.
Comparison of Toyota and GE HR processes
We can see a number of similarities as well as contrasts between Toyotas and GEs processes of managing their human
resources to drive each organizations high performance business models
In Toyotas approach to harnessing their HR, the following main characteristics can be seen.
1. Toyota is focused on relentlessly developing the individual talent to meet the organizational needs. This is a continuous
process and in our view this is in line with Kaizens other concepts in the Toyota Production System. This is a vital element in
the organizational culture of Toyota.
2. Focus on collaborative work rather than individual glory. The managers and the peers are part of the organization-wide
teaching and learning culture. Therefore there is no room for individual performance requirements to clash with team
performance requirements. This helps to foster team work among the employees. We believe this characteristic of Toyotas
process stems from the Asian cultural roots of Toyota.
3. There is no categorizing and branding of non performers. Toyotas culture drives all employees to learn, develop and perform.
Perpetual non performers who fail to uplift their performance levels even after training and development opportunities will
eventually leave the organization.
In GEs approach to harnessing their HR, the following key elements can be identified.
1. GE places great importance on hiring, training and development in order to ensure that their employees are the best
performing lot in the market. GE views high performance of employees as a vital element that gives GE a competitive
advantage in the market.
2. GE has a stringent policy of weeding out non performers. However in our opinion this policy has its own pros and cons.
The pros would be: (A) Faster route to creating high performance teams by removing the weak links rather than spending time
and resources on developing these week links to be better performers, (B) Pressure created by this process on employees, forces

them to improve their performances to match the GE requirements without any managerial involvement, (C) Creating
opportunity for new blood to come into the teams through the openings created.
The negatives are: (A) Unhealthy competition would be created among the team members due to the requirement to maintain a
good ranking for their individual performances. This can lead to a situation where individual goals can undermine the overall
team and organizational requirements, (B) Distrust can be created among the employees regarding how the individual rankings
were determined, thus exposing the organization to legal issues and litigations.
Develop your own high performance workforce
As we saw in Toyotas and GEs models, one of the main drivers of a high performance business model is the people of the
organization. Therefore one of the main requirements is to have effective HR management policies and processes to harness the
best out of the HR an organization has.
Although there are many differences among the HR strategies of todays global high performance organizations, there are key
elements or best practice that any aspiring high performance organization can adapt as their own,
Therefore a few key elements in this area would be:
1. Having a strong learning culture in the organization, where all ranks of employees teach and learn using all available
opportunities. These opportunities could vary from formal class room type training programmes to learning from events in the
shop floor.
2. Stringent performance measurement and review processes linked to ranking employees according to their performances.
However unlike in the GE processes, all employees should be given a fair opportunity to improve their performances. Only the
repeated poor performers will be asked to leave the organization.
3. Rewards and growth opportunities for the top performers that will stimulate the need to learn and perform among the
employees.
Using the above, organizations can tailor-made HR management strategies to harness HR to drive their own organizations
towards high performance business models. So who wants to be the next Toyota or GE?

(Silva, 1996)

How does Apple conduct its employees' performance

appraisals?
Apple divides employee performance into three categories: teamwork, innovation and
results. There are three categories of performance: needs improvement, met expectations,
and exceeded expectations. Everything revolves around that. Annual raises are between 08%

What does Facebook's performance review process look like?

Molly Graham, Helped build Facebook HR and Facebook Home.

Written Oct 5, 2013 Upvoted by Neel Hajare, Facebook Intern '11 and Alex Wu, worked at Facebook for
>4 yrs

Facebook has a performance management review every six months (starting in January and
July). They call it the Performance Summary Cycle. There is a two week period where
employees solicit peer feedback (usually 3-5 peer reviews), write a self assessment, and
write a manager assessment. Managers then read all the peer feedback and the self
assessment and determine a "Performance Assessment" or rating of the employee's
performance over the last six months as well as whether or not it is the right time to
promote the employee.
Then there is a (roughly) two week period of calibration where managers meet to look at the
assessments of everyone on their team and ensure that people are rated correctly relative to
their peers. Facebook has seven performance assessments as well as a guideline for what %
of employees should be at each level, however it is explicitly not a forced curve, particularly
for small teams. The curve exists to ensure that extraordinary performance is rewarded (I
believe the distribution is such that only 2% or less of employees are given the highest rating
every cycle) and that if hard conversations need to happen, they happen.
Calibration happens at the team level and at the senior management level (Mark, Sheryl,
and all of their direct reports look at the numbers for the whole company, lists of the highest
performers, lists of the lowest performers, etc). Performance Assessments are final and they
are used to determine compensation like raises, bonuses, and additional equity grants.
Facebook gives out raises and additional equity once a year but they do promotions and
bonuses twice a year. Compensation at Facebook is almost entirely formulaic with
multipliers (based on the Performance Assessment) for bonuses, raises, and additional
equity grants.
At the end of the cycle, managers have performance conversations with employees where
they summarize the feedback (in person and in writing) and give them a compensation
letter that includes their rating, bonus, and any additional information. In recent years, the
whole cycle has taken about six weeks, which is pretty impressive for a company of ~5,000