Mr. Krishnamurthi, Group Head-Human Resources at Titan Company Ltd, gave a very informative guest lecture to TAPMI PGP-2 students on Friday, 11th July, 2014 on the Performance Management System at Titan. Mr. Krishnamurthi is a seasoned professional having served multiple organizations in multiple capacities. He has close to two decades of experience in handling the HR function in different industries such as Manufacturing, hospitality, telecom, pharmaceuticals and retail.
He started by giving a brief overview of Titan which has three businesses viz watches, Jewelry and eye-wear. With workforce of 4000, Titan is the world’s 5th largest watch manufacturer and works on precision engineering. It has currently 65% market share in organized watch market.
Explaining about performance management on employee communication perspective, he raised a pertinent question if, the performance management is a good thing or a bad thing. The appraisal system helps in evaluating a person and serves as an input to the succession planning. It identifies and classifies the employees into three categories viz, high performers, mediocre performers and low performers. He answered the same by emphasizing that the performance management tool used by Titan for its employees is more of a development tool than a classification tool as it aims to create less of comparison and more development. It identifies the aspects and helps the person to grow as there are enough and more opportunities for individuals. A mechanism of self-appraisal is also followed which requires detailed explanation in words by the individuals regarding achieving his KRA (key result areas) and CSFs(Critical success factors).
The performance plan at Titan follows a pyramid structure with organization objectives defined first, which are broken down into functional objectives, which are further broken down into individual objectives. These individual objectives are broken down into key result areas (KRA) which forms basis of Mid Term review and finally Final review.
He also talked about the Tata leadership practices which consist of three main clusters viz people, results and business. These practices have fourteen success factors, under each head. The success factors of people are focus on taking ownership, people development, interpersonal effectiveness, building effective teams and withstanding pressure. Those for results are drive for results, customer focus, timely decision making and innovation management. And for business the success factors are managing vision and purpose, strategic capability, dealing with ambiguity, business acumen and functional excellence.
The basis for measuring competency is the behavioral indicators. These indicators can be seen doing by a person and put on rating scale. The outcomes of performance management system are that it is used to differentiate the performances through performance linked pay and the major factor considered for salary increase. It is also the means of giving feedback and course correction and prominently used as a development tool. It serves as the entry gate for talent pool of the company and lays foundation for career progression discussion.
Giving insights on potential appraisal process at Titan, he explained that for measuring potential the most commonly used indicator is performance. This is backed with the research data from CLC or Corporate Leadership Council which rates Performance having the highest component rating among various factors like past experience, IQ, performance, KSA and capabilities and enthusiasm and initiations undertaken. The performance appraisal process has three main clusters i.e. aspiration, ability and engagement.
Despite several advantages of performance appraisal system and the use for best intentions, several gaps existed in the Performance appraisal system used. The employees often treated it as a mechanical job for form-filling and setting individual KRAs was not given due importance. Also less time was spent in preparation and during appraisals and usually performance differentiation between team members was not well received. More weightage was given to recent events which often creates a halo effect. And often the employees would end up overrating themselves and even filled certain unpleasant comments post the Performance appraisal session.
Bringing to view the practices followed in Titan, Mr. Krishnamurthi shared that in order to rectify these gaps, Titan came up with a very innovative idea of PMS Branding, Tune In- Match your wavelength, with an appealing name and logo to connote with. This promotes conversations in friendly atmosphere and the communication plan for Tune In is Tune In Chronicle. Catchy mailers on contemporary topics, conveying the importance of PMS are sent during the four month long Performance appraisal period, consisting of mid- term reviews and final reviews. This generates huge interest among employees and there has been visible and significant jump in the two years. Also to convey the importance of Tune-in and to push it to be taken seriously, entertaining, funny short videos with the important message emphasizing significance of PMS are shared among employees and elevator posters are put up. Some of the videos’ messages are: Tune in to your colleague’s feeling, What is recorded in Tune-in is recorded forever and Tune-in is about facing reality.
Also post-appraisal, Best Boss Contest is organized which evaluates managers with focus on reinforcement of role clarity, providing development inputs, and communications. These improved measures and engagement with employees has resulted in jump in scores on robustness of KRA settings. Mr. Krishnamurthi concluded the insightful guest lecture by taking a deluge of questions of students and clearing their doubts by giving numerous examples with each explanation.