Performance appraisals for the IT team: Tiding through choppy waters

Will lack of projects and lesser IT budgets adversely affect IT team appraisals in FY 2009-10? How will Indian CIOs approach performance appraisals this year?

IT projects are often rightly compared with trees that benefit from a trim — especially in recessionary periods that necessitate cuts in IT project budgets and IT staff numbers. Such times typically call for a relook of the new IT initiatives, with a renewed focus on value for the business.

Most IT teams are yet to get over the blues of last year's appraisals which were majorly hit by recession — lack of new projects add to this misery. In a choppy situation, organizations have a re-look at new IT initiatives and work towards finding business value to existing infrastructure. In such a scenario, the CIO's job gets tough. Hence the challenge is to boost employees' motivation with minimal resources and initiatives.

So how is project management crucial for periodic employee reviews? It is one of the critical factors under consideration during performance appraisals. E Balaji, the chief executive officer of Ma Foi, an international human resources service provider, explains the general soft and hard performance appraisal metrics being measured by IT enterprises at present. "Hard metrics include number of billable hours, customer feedback score, domain knowledge, project management, projects completed on time, timely project delivery, resource optimization and error rates. Soft metrics are attention to detail, customer focus, problem solving capabilities, timely escalation, conflict management, commitment, ownership, innovation, attitude, and communication skills. Soft metrics are typically aligned with an organization's values."

Project management is critical for employee performance evaluation, as it directly impacts employee productivity — especially during economic slowdown. "The evaluation parameters remain similar even during tough times. It largely focuses on quality and project turnaround times with higher priority to customer satisfaction," adds Balaji.

Most CIOs feel that the evaluation process has not been significantly impacted due to the lack of projects. However, there is a challenge of engaging employees in different activities. "Nothing has really undergone a change on the performance evaluation front. While the work quantum has not gone down, there has been a decrease in the configuration of work. The good part is that more activities are now getting aligned to the business. People are not ready to spend on IT just for its sake. From that angle, key result areas (KRA) have become business-focused, which is helping us," says Satish Pendse, the CIO of Hindustan Construction Company.

"Our process remains the same, but now we look at one more factor — the employee's ingenuity in trying times. Is he a laidback person who waits for instructions or assignments? Does he look for internal opportunities to improve processes, streamline systems, and innovate with new solutions? Can he achieve the same results in a better, more efficient and cost effective manner?" says Ajay Kumar Dhir, the group CIO of JSL Ltd.

It is not always possible (or practical) to have enough projects in hand to satisfy an employee's aspirations to master new skills. Many CIOs are now taking innovative measures to keep their employees engaged in new activities — these typically involve a relook at leveraging the existing IT setup. "An employee's motivation is partly based on his own self motivation, as well as the drive to contribute and excel. This is a very important factor for my consideration parameters," says Dhir.

Dhir points out that the IT team can still undertake projects which do not involve capital expenditure (these can be highly leveraged projects which give quantifiable business and operational benefits). Since these projects provide sufficient visibility, it keeps employee morale high.

Many companies reduce salaries, employee counts, and stop perks during tough economic conditions. Avoiding such practices is the first psychological advantage which a CIO can provide to his team.

Best practices for employee motivation

Keeping up motivational levels is the most critical factor when it comes to IT team performance appraisals. The IT function's value should be determined depending on how effectively an employee contributes to larger business goals. These goals may be met through new initiatives, existing initiatives or innovative leveraging of IT. The general perspective is that performance can be evaluated from employees who contribute towards better leveraging IT initiatives as well — not just new initiatives.

"During slowdown, it's essential to ensure transparent communication, leadership involvement and invest in workforce development to maintain employee motivation. A lot of innovation and sharing of best practices happens during this period. Employee wellbeing is also a large focus area, with initiative like counseling, yoga and family activities. These efforts ensure an agile, competent, up-to-date and motivated workforce once the economy picks up," says Balaji. Hence many IT teams practice process improvement studies which are not possible during peak work periods. These studies may also include quality intensive projects such as studies on software development lifecycles.

"Absence of new projects do impact IT teams, but the effect is on team mindsets. For an IT person, the general definition of "good work" involves just new projects. So we need to change the way we think as part of the IT department. During recessionary times, the value of IT actually goes up. So an employee needs to be ensured that his role is mapped in more ways than just through new IT projects. It is more about how IT delivers business. So our challenge is to evolve our people's mindsets — from just the projects angle to delivered value," suggests Pendse.

According to Pendse, many companies reduce salaries, employee counts, and stop perks during tough economic conditions. Avoiding such practices is the first psychological advantage which a CIO can provide to his team. CIOs should communicate to his team members that evaluations have no detrimental effects for employees who provide major value to the business.

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