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Home > Business > Special

How to make stars out of employees

Rituparna Chatterjee & Prasad Sangameshwaran in Mumbai | October 25, 2005

Poor performers turning into stars overnight is the stuff that comic strips are made of. However, the converse is true in corporate life.

Many times companies find their star performers tripping before the finish line, much like the favourite race horse that fails to complete the derby. In a competitive environment, out-of-form is a bad word in most companies.

So how do companies tackle declining performance or make stars out of employees who do not shine? The process in some companies such as petroleum major Bharat Petroleum surprisingly begins by looking at top performers. Says S Mohan, executive director, human resources development, BPCL, "We don't look at the process from the tail end."

In 2000, BPCL hired the international human resource consulting firm Hay Group to identify the qualities that differentiated its star performers from the rest. The study helped in understanding the underlying competencies of successful managers.

For instance, if customer focus helped one manager succeed, networking was the cutting edge for another. The company picked up these individual attributes and compiled a ready reckoner of 15 competencies to help all employees become stars. But this benchmarking was only possible if the company had many managers doing the same job -- for instance, territory managers.

But for senior executives like functional heads, internal benchmarking was not the right choice -- as there are no two captains in one ship. So, BPCL invited senior executives from other industries to create competency parameters at the top. As a result, functional heads from other industries would be invited to give their inputs in forming a competency chart for BPCL's top rung.

If employees did not match up to these documented parameters, they were not labelled as outcastes. Instead, they were sent to training and development centres. The training process included enacting, role plays on dealing with irate customers and so on.

In another exercise, employees had to solve business case studies. This helped the assessors in understanding the strong and soft spots in each employee. What followed was a dialogue with the poor performer, to let them know about where they stood and how they could go forward.

In some cases, employees were assigned a different function after assessment of their capabilities. But all these initiatives do not guarantee success.

As BPCL's Mohan puts it, "A large part of the success depends on the individual. Organisations can only create the right ambience and wherewithal for employees to discover themselves."

To help employees achieve their objectives, BPCL has been experimenting with the idea of one-one coaching for the past few months. Internationally, this concept (similar to a sports coach) is used by CEOs.

However, BPCL is using consultants from ISABS (Indian Society for Applied Behavioural Sciences) to coach 17 of its territory managers. The coach tries to understand and address individual issues of the managers and, at times, interacts even with the bosses of his ward.

If BPCL takes a top-down approach to performance issues, Tata Chemicals (TCL) tackles declining performers without actually calling a spade by its name.

In TCL, employees scoring low scores (a rating of one or two) in their appraisals are simply put into two-month-long projects in other teams, to give them another chance. Only the boss of the project team is not aware that his new team member is an underperformer.

This action helps in killing many birds-- the employee gets an assessment from a new boss (employees could have been in the bad books of their previous boss), if the employee in question is cut to perform better in another function, he can be transferred.

B Sudhakar, head corporate HR and administration, TCL, says that the important part of enhancing performance of underachievers is dialogue.

"Managers must communicate with their poor performers. That's an important and powerful process," he says. The problem is, few managers do that. "Everyone wants to be a nice guy," says Pradeep Mukerjee, Citigroup's vice president and director HR for India, Bangladesh and Sri Lanka.

If managers do not speak out, money talks. More and more companies are ensuring that the incentive divide between top performers and the bottom is ever increasing.

Earlier, the RPG group offered bonus and increment between 5 per cent to 35 per cent for its employees. Since April 2002, the range has increased from zero per cent to 70 per cent, depending on the performance. In TCL, the same is true. Top performers get a larger share of the variable pay component.

The results: 48 per cent of poor performers in TCL have improved in the past three years (drawing an average of three points), while the remaining have moved out of the organisation. TCS too has managed to turnaround 30 per cent of its poor performers.

"George Bernard Shaw's Pygmalion showed how even an ordinary flower girl, Eliza Dolittle can become a perfect high society 'lady'. We try to do the same to our employees," says Arvind Agrawal, management board member and president, corporate development and human resources, RPG Group.


Winning the war for talent involves investing in top performers, raising the game for mid-level performers and probably the toughest -- dealing decisively with underperformers.

Most companies struggle with even the fundamental task of assessing the relative performance of their people and are worst at taking appropriate actions based on such assessments. The process of challenging low performers is fraught with emotional, ideological and practical barriers.

First of all, it's essential to articulate specific actions that will be taken for the manager over a finite time period. The objective of this action would be to raise performance in the same job, move the manager to a job that's a better fit with his areas of competence or to terminate the employee's services. There are several actions available for unsatisfactory performance. Here are some possible areas that are often used and have proven successful.

1. Appraisal: Evaluating managers by comparing actual performance against preset goals is one of the most popular practices in performance management. The task of a manager is to set goals, find methods of their attainment and enlist support of people whom he is responsible towards making plans happen.

2. Counseling: Is constructive listening and calls for skill and self restraint on the part of the counselor. A counseling interview should have as one of its outcomes a list of things that the manager will try to do better. The counselee himself should be able to tell whether he is meeting the new targets. These could be short-term, objective, observable goals that can be utilised for the next session of counseling.

3. Training and development: To encourage and enhance performance, the training tool should be thought of in the context of " What do we want him to do differently and by when?" The concerned trainee manager should be spoken with to enlist acceptance of the need for training, so that it is not regarded as a punishment. Otherwise the motivation to learn may be lost.

4. Changing the job: A manager may be performing badly because a job is inappropriate for him. A possible course of action is to transfer the manager from one department to the other. In some cases, the job can be changed by job redesign wherein different responsibilities are given to the under performer.

5. Termination: When it finally comes down to firing someone for sub par performance, providing the individual with generous support lessens hardships, anger and legal risks. Severance pay, outplacement services and so on, go a long way. Companies must be very deliberate in ensuring that low performers, like all other employees are treated with dignity, respect and care.

Decisively dealing with under performers is not about a one-time house cleaning or being tough on people. It is about constantly holding the company's performance bar high, being relentlessly focussed on performance and aligning all employees including the low performers to the corporate goals and standards.

Purvi Sheth is VP, Shilputsi Consultants, an HR consulting firm

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