A STUDY OF PERFORMANCE

MANAGEMENT SYSTEM IN WIPRO

Abstract
The study aims to study and analyze Performance Management components and
their usage in Wipro. The study entailed detailed examination of the methods to
measure and enhance performance management system against its objectives.
Exploratory research followed by descriptive research has been used in the study.
Nonprobability convenience sampling has been used in the study. The sample size
is 40. Primary data has been collected using two structured questionnaires. Depth
interview method was used by which answers to the questionnaire were sought.
The performance management system is an integral part of an organization to
measure, motivate, and improve the performance of the entire organization. It
also helps to focus on the goals of the organization towards specific pre-
determined objectives for an organizational culture. The companies must identify
and develop unique retention strategies to retain the employees. An established
formal communication networking with an informal focus would give the
organizations an additional competitive advantage. Keywords: critical incidence,
paired comparison, retention, self-appraisal, succession planning. Introduction
Performance is what is expected to be delivered by an individual or a set of
individuals within a time frame. What is expected to be delivered could be stated
in terms of results or efforts, tasks and quality, with specification of conditions
under which it is to be delivered.
Concerns of performance management
The following are the main concerns of performance management:
 Concern with outputs, outcomes, process and input
 Concern with planning
 Concern with measurement and review
 Concern with continuous improvement
 Concern with continuous development
 Concern for better communication
 Concern for stakeholders
 Concern for fairness and transparency
The process of performance management
Performance management should be regarded as a flexible process, not as a
‘system’. The use of the term ‘system’ implies a rigid, standardized and
bureaucratic approach, which is inconsistent with the concept of performance
management as a flexible and evolutionary, albeit coherent, process that is
applied by managers working with their teams in accordance with the
circumstances in which they operate.
Performance management is a natural process of management. As defined by the
total quality expert William Deming; it consists of these basic activities: -
 Plan – decide what to do and how to do it.
 Act – carry out the work needed to implement the plan.
 Monitor – carry out continuous checks on what is being done and measure
outcomes in order to assess progress in implementing the plan.
 Review – consider what has been achieved and, in the light of this, establish
what more needs to be done and any corrective action required if performance is
not in line with the plan. Performance management in action Performance
management should not be treated as a mechanistic system based on periodical
formal appraisals and detailed documentation. These activities should be
coherent in the sense of contributing to an overall systematic approach in which
all aspects of the performance management process are aligned. Thus, there
needs to be a declaration of intent, which states why performance management
is important, how it works and how people will be affected by it. Examples of how
such an approach is made are given below. Organizational performance
measures: It is necessary to measure achievements and progress against
objectives, and organizations have therefore to decide what measures should be
used. A few key measures owned by more than one function are more effective
than a multiplicity of measures – this avoids the problem faced by many
organizations of ‘drowning in data’.
The key measures are likely to include those concerned with: -
 Financial performance – for example sales, profits, return on capital employed,
economic value added, earnings per share, price/earnings ratio.
 Operational performance – these measures will be related to the critical success
factors. For example, in a retail store these could include level of service to
customers and customer satisfaction, stock availability and stock wastage. A
manufacturing company might use measures of quality, throughput, inventory
control and delivery.
 People performance – for example profit, sales or added value per employee,
payroll costs as a percentage of sales, output per employee (productivity),
retention rates, employee satisfaction.
The balanced scorecard: -
The balanced scorecard as originally developed by Kaplan and Norton is
frequently used as the basis for measurement. Managers want a balanced
presentation of both financial and operational measures.’ Their original concept
of the scorecard required managers to answer four basic questions, which means
looking at the business from four related perspectives: -
 What must we excel at? (Internal perspective.)
 Can we continue to improve and create value? (Innovation and learning
perspective.)
 How do we look at shareholders? (Financial perspective.)

The balanced scorecard approach ‘puts strategy and vision, not control at the
center’. It defines goals, it assumes that people will adopt whatever behaviors’
and take whatever actions are required to achieve those goals: ‘Senior managers
may know what the end result should be, but they cannot tell employees exactly
how to achieve that result, if only because the conditions in which employees
operate are constantly changing.’ Kaplan and Norton suggest that building a
scorecard enables a company to link its financial budgets with its strategic goals.
The balanced scorecard can help to align employees’ individual performance with
the overall strategy: ‘Scorecard users generally engage in three activities:
communicating and educating, setting goals and linking rewards to performance
measures.’
Scope of the Study
The performance of the employees is being analyzed which can indirectly
influence the satisfaction of the employee and directly motivates them to work
for the organizational development. The study helps to analyze the trends in
performance management system in Wipro industry and give appropriate
suggestions to improvise the practices taken by it.
Literature review
Forslund (2007) a state‐of‐the‐art description of the activities in logistics
performance management is provided, addressing the following questions in
dyadic relationships: how often are expectations updated? Who is the customer's
contact person? What is the contract situation? Which actor (customer or
supplier) formulates performance targets, and who measures logistics
performance? Some of these issues' relationships to customers' expected logistics
performance were verified.
Lo & Chin (2009) The seven user‐satisfaction‐based core values, eight critical
success factors and five‐phase knowledge management process are identified as
the basis of the assessment criteria. These assessment criteria provide academics
and practitioners with a new insight into the research landscape for knowledge
management performance measurement.
Adobor (2004) focuses on management processes in shared‐managed joint
ventures. It suggests that the evolution and effectiveness of the management
team in joint ventures may be facilitated by certain key contextual and individual
level factors. Looking at venture management as an inter‐organizational group of
people composed of members representing parent organizations whose behavior
is regulated by a common set of expectations can give clues to the special nature
of joint venture management tasks. The individuals nominated to the team as
well as some key performance‐facilitating contextual factors may affect team
effectiveness.
Gomes & Yasin (2011) the advocated approach integrates several frameworks in
an effort to address practical concerns related to performance measurement,
management, and improvement. Boland & Fowler (2000) the potential role of
influence diagrams and dynamic simulation models is thereby introduced as a
potential means of unraveling the complex behavior which can often arise in the
presence of such interactive cause‐effect loops. A number of typical examples,
drawn from within the public sector, are invoked to illustrate the discussion.
Busi & Bititci (2006) there is a lack of understanding of what collaboration means
and what it implies on the development of appropriate performance
measurement systems. Future research should study the nature of collaboration
and the characteristics of performance indicators to support it.
Agyemang & Ryan (2013) examines organizational change processes that occur
when accountability demands from powerful external stakeholder’s change. It
investigates, firstly, whether these external accountability demands impact on the
performance management systems of two different types of organizations.
Secondly, it considers whether the goals for improved performance contained
within the external accountability demands are realized. In the public sector case
study, the organizations tended to reorient their performance management
systems towards the external accountability demands; whilst in the private sector
organization, pressures from falling share prices forced managers to focus their
decision making on the preferred performance measures contained in
shareholders’ accountability demands.
Bourne et al (2003) there is a growing trend towards managing performance
improvement through focusing on the underlying drivers of performance,
whether improvements in the processes or the underlying resources that give
these processes capability. The past obsession with pure financial performance is
decreasing and there may be recognition that there is a tradeoff between hitting
today’s financial results and sustaining the capabilities and competences that
allow companies to compete effectively in the future.
Willis & Willis (1996) Engineering consulting firms involved in the design and
construction of large‐scale industrial plants attempt to find flaws as early as
possible in the design process to avoid more costly deviation corrections later on,
particularly during and after construction. Deviation corrections can be reduced
by pursuing more diligent quality prevention and appraisal efforts. Quality
performance management system (QPMS) is a cost evaluation programme
designed to measure the prevention and appraisal effort and its impact on
deviation corrections.
Schiuma (2012) Knowledge represents one of the fundamental constituent parts
of any organization and it can be incorporated into people's abilities or ingrained
into structural and technological capital. Thus, management of knowledge is at
the core of organization's business growth. In the light of this reflection this
special issue pays attention to two main perspectives. First, recognizing that
knowledge, likewise any other organization's resource, needs management
means to support its allocation and development, the frameworks and tools
aiming to identify, manage and assess the critical knowledge resources for growth
are focused on. Second, acknowledging that the translation of knowledge into
business outcomes requires management mechanisms, and then considering the
knowledge processes grounding the improvement of performance.
Research methodology

Objectives:
 To study the existing system prevailing with regard to performance
management system in Wipro.
 To focus on the challenges prevailing in the retention of such highly skilled
effective employees.
 To provide some meaningful suggestions to the organizations as well as the
industry to improve, modify and change the existing systems of performance
management.
Research design: Exploratory research followed by descriptive research has been
used in the study. Descriptive studies are undertaken in many circumstances.
When the researcher is interested in knowing the characteristics of certain groups
such as age, sex, educational level, occupation or income, a descriptive study is
necessary. Descriptive studies are well-structured. It tends to be signed and its
approach cannot be changed every now and then. It is, therefore necessary that
the research give sufficient thought to framing research questions and deciding
the types of data to be collected for their purpose.
Sampling Technique: Non-probability convenience sampling has been used in the
study. Convenience sampling refers to the collection of information from
members of the population who are conveniently available to provide it. It is most
often used during the exploratory phase and is perhaps the best way of getting
some basic information quickly and efficiently.
Sample size: The study has been carried out by collecting information from Wipro
by using simple random sampling. The sample size is 40.
Data collection tools: In the study data has been collected using primary and
secondary methods of data collection. Primary data has been collected using two
structured questionnaires. Depth interview method has been used. Secondary
data has been collected from journals, articles; research magazines and working
papers available in the organization and from Internet.
Data analysis
The components of performance management system in Wipro are as follows:
 When and how are the Key Result Areas (KRAs) for an employee identified? How
are the changes in KRAs handled if the business requirements change?
Wipro follows top down approach. The organizational goals are cascaded down
the line i.e. through organizational goals, KRAs of top management is set then
from those KRAs, KRAs of others managers at various levels are set. Various heads
further set KRAs of team leaders through team meetings. If management comes
to know that there are people with below average performance, they provide
them with performance improvement training. It is an online process in Wipro.
 What are the components / phases of performance management system?
In Wipro G & O i.e. Goals and Objective setting is the first step of Performance
Management System. Appraisal is done annually starting from April to March. The
appraisal period in Wipro changes from year to year. There is a reward system
which is generally in monetary form. After doing Wipro leadership survey in the
company, which is done annually in the company and at high band level, star
performers are recognized and groomed. Performance appraisal which is an
important part of performance management system in Wipro requires self-
appraisal of employees on both lower and higher level of hierarchy. 360-degree
feedback is only done at middle and higher level. There is a face to face meeting
with the employee after self appraisal. After this the whole process rating is
provided to the employee i.e. GP rating, then according to the rating, rewards in
form of monetary hikes are provided to employees. Various development and
improvement programs are conducted for the employees on the basis of the need
after the appraisal has been taken place.
 How many meetings are scheduled in a year to discuss employee performance?
Minimum one meeting is preferable in a year to discuss the employee
performance in Wipro.
 Which technique is adopted for carrying out performance appraisal? Is it
different for senior level managers?
In Wipro performance appraisal is done through face to face interviews, which is
done after self appraisal. One on one interview appraisal method is chosen by
Wipro because it helps in clarity of results given and communicated by supervisor.
Communication between employee and manager is better. Wipro also has 360
degree feedback mechanism which includes feedback from peers, clients,
subordinates and immediate boss. In Wipro appraisal is an online process.
 Does the company use tools to reduce biasness in the PMS?
In Wipro, the appraisal system is total online and they use normalization method
to reduce biasness in the system.
 What all processes are part of your PMS?
In Wipro importance on career management is relatively more since it is
considered light path for employees. Career management and development plan
of employees helps them to grow as a person and develop their hidden potential
which in turn helps the company to have more talent pool in the company which
would be definitely a positive for the growth of the company.
 How are the Training and Development (T&D) needs captured through the
process of performance appraisal?
Wipro assess training and development needs, if it has been suggested by the
boss or during the self appraisal period appraisee feels that there is a need for
training and development in certain areas. There is also a strategic leadership
development team for training and development position. There is also PCCP
department for assessing training and development needs.
 How succession planning is done in your organization?
In Wipro, succession planning is done through the suggestion of managers.
Managers suggest some names and nominees are chosen from them by top
management. Top management conducts interview with nominees and make
their decisions accordingly.
 What is the most important aspect of PMS?
Wipro like HCL also gives high weight age to retention of employees and makes it
a huge part of their performance management system. Identification of training
and development needs of employees and motivating the employees are also a
part of performance management system.

 Which rating scale is used by the company? Is there any standard approach for
rating the employee?
Wipro uses GP rating ‘G’ stands for process/ performance of an employee over a
period of time and ‘P’ stands for personal effectiveness. Wipro follows a 5 level
grid. Every employee is rated on this grid. Rating is from G1P1 to G5p5. G1P1 is
the lowest rating which an employee can get and G5P5 is the highest rating.
According to the rating, employees are distributed on bell curve. The percentage
of bell curve differs from year to year.
 Is promotion part of the PMS? How are incentives and promotions linked to the
PMS outcome? What are the criteria for promotion? What percentage (%) of the
eligible population is allowed for promotions every year?
Wipro provides internal promotions twice a year to its employees. Promotion of
employees is finalized with the help of their appraisal. Anyone can be a part of
promotion exercise who joins between 1st Jan to 31st march. Usually employees
with grading of G3P3 and above are eligible for promotions as the 5 level grids are
followed by Wipro. These rating helps when there are some GAPs in organization
and it is required to be filled. Wipro has slide system for it in which internal
promotions are done through nomination which helps in filling the gap. It is done
twice a year. Another method of promotion which is followed by Wipro is through
IJPC i.e. internal job posting. It is done every quarterly i.e. in every 4 months and
completed in 45 days before quarterly results are out. In this method first
aptitude tests are taken followed by group discussion and panel interviews. When
an employee passes all the stages, the promotion is granted to him.
Findings
Following are the findings of the study:
 For reducing the biasness in PMS normalization is used mostly.
 Training of the employees is an important part of PMS.
 Retention of the employees is of utmost importance while making policies
regarding PMS in the company.
 If poor performance of an employee is identified, there is a trend of providing
improvement coaching. Recommendations Following are the recommendations
for improving the overall PMS in the company studied:
 Biannual performance review should be started with the next review period.
 As it is inferred that PMS system is important for any organization, the
organizations must invest in specific technology-oriented products and services,
software and hardware to improve the performance.
 Self-appraisal is the most effective tool for PMS system, so the management
must effectively develop training and development tools to make the employees
sensitive towards the organizational environment and culture.
 Training and development, career development and succession planning
become the core essential functions of a PMS. The organizations must
concentrate on these areas to effectively appraise and improve the performance
of employees in the organizations.
 Retention and innovation strategies are used to improve the performance of
employees, so the focus must be directed towards improving the PMS.
Conclusions
The performance management system is an integral part of an organization to
measure, motivate, and improve the performance of the entire organization. It
also helps to focus on the goals of the organization towards specific
predetermined objectives for an organizational culture. The companies must
identify and develop unique retention strategies to retain the employees. An
established formal communication networking with an informal focus would give
the organizations an additional competitive advantage.