Operational Effectiveness > Developing An Appraisal Matrix For An Organization With 240 Employees

Client functions in the service industry and employs over 240 personnel in two operating units. One unit was one year old while the other unit is in operation for 14 years. Client wanted to create a transparent and accountable appraisal mechanism so as to reward high performances and motivate low performances.

The client had been offering the same industry level increments to all personnel, which resulted in the following

• There was no way to identify performers against non-performers.
• There was no mechanism through which performers could be motivated.
• This resulted in a low overall productivity and low motivation, as they saw high efforts being translated into same increments every year irrespective of their performance.

The project was run over ten days. Key metrics to appraise an employee were identified as Tenure and Performance. A 3 x 3 appraisal matrix was developed that factored both metrics. Each employee was classified in one of the nine appraisal cells and incentive percentages were allocated for five bands.

• Employee salary, appraisal and tenure
• Industry benchmark for increments

Client implemented appraisal matrix that incentivized performance and tenure. The overall cost to the company remained the same as incentives were reallocated towards performers who now got higher increments.