Monday, February 05, 2007
Maruti adopts `360 degree' appraisal system
Business Line - 4th Feb 2007
It 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 self-appraisal 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.
It 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 self-appraisal 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.
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360 degree feedback is the supply feedback to employees in both increased frequency and improved quality, 360 degree feedback system.
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