TCS Performance Appraisal – motivating or demotivating?

Today, we received our performance appraisal. All TCS employees were divided into five bands from A to E – A being the top rated and E being the bottom. Top 10% associates get A, next 20% B, next 30% C, next 39% D and bottom 1% E. Band distribution motivates top 10% and at least half of next 20% (bottom half of 20% who knew they did not deserve A). Overall, 20% of work force is motivated and rest all are demotivated. You can notice the feeling when associates take longer tea break, hesitate to talk, do not return calls, and when SLAs breach or just escape breaching.

Why is performance appraisal demotivating for 80% of TCS work force?

Goals set and evaluated do not govern performance appraisal. Goals are set to evaluate performance and a number is given on fulfilment of each goal. All these numbers are rolled up to get a number from 1 to 5. However, this number is not used for performance appraisal band determination and a manual ranking of associates in each project determines performance band. Factors that govern ranking and, thus, performance band:

  1. Are you required in next 6 months? If so you will get good ranking. It does not matter whether you have contributed anything to revenue until the time of this ranking.
  2. If person is getting released from project then he will get D, if not E.
  3. Onsite associates gets lower ranking. Logic is to keep everyone happy – Onsite associate gets Onsite allowance (which is usually higher than Offshore salary) and Offshore associate gets higher band.
  4. Since consecutive E leads to service termination, another higher performer has to be sacrificed by giving him E. Following year, this higher performer needs to be saved and the cycle continues
  5. How close you are to decision makers?

Performance appraisal mars collaboration in project. Associates in a project compete to get A, B or C (tragically, even D to escape E). A Project Manager bleeds when he has to burn his best diamonds (team member) like a coal.

Should we not have performance appraisal?

We should have performance appraisal. However, performance appraisal needs major revamp:

  1. Only one person or one committee sets performance goals for all associates in a project. Number generated from goal attained should determine ranking of person in project.
  2. Many a times supervisor keeps goals in a goal-sheet vague (not specific or quantifiable) so that he can evaluate overall and give his opinion. Instead of that one of the goal measure can be supervisor opinion of appraisee performance. This goal should be subjective.
  3. Have two scales of performance appraisal – project performance and personal performance.
  4. Have 2-3 performance levels. A – top-performer, B – mediocre, C – non-performer. Employ level C for very small percentage like 1%. Applying level C should not be mandated on personal performance but mandated on project performance scale. Coach or terminate a person with both individual and project performance C.
  5. Disburse project team that obtains project band A and C.

How is suggested performance appraisal method better than TCS‘s method?

Suggested method

  1. Ensures that everyone is rated on the same scale. If goals are well-defined and appraisee appraised on goals then individual factors, onsite/offshore, requirement over the time etc. will disappear.
  2. Promotes collaboration rather than competition especially in team. Reduction in number of band values (D and E, even possibly C) will further reduce competition.
  3. Allows company to grow when performers in best projects are distributed in organization and bottom performers are coached or terminated.

Performance appraisal can never be perfect and suggested method may also suffer from some problems. One of the problem I envisage is that reduction in competition will not address lack of motivation (not demotivation) in 40% of least performers (in TCS‘s D and E scale). With 60% of work force motivated and rest 40% not demotivated, suggested performance appraisal method is far superior than TCS‘s current performance appraisal method.

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37 Responses to TCS Performance Appraisal – motivating or demotivating?

  1. Jazz says:

    Yes the present Performance appraisal are indeed de motivating to 80 % of employees. It seems they are pushed to the bands based on % defined, which really pulls them down even tough they have worked hard… and yes the higher bands are pre defined for senior employees….this process must change

  2. Passion says:

    I agree with Jazz,
    The appraisals in TCS is just a bubble. They talk about the Bell Curve for distributing bands. However, nothing is transparent. I’ve seen A bands taken by project leads or highr levels and a few % of B bands given one of the team members. Most of the team members receive a C Band and a few receive D band. The cream is retained by higher levels. The lame excuses are given to the team members during their appraisal discussions. But I don’t understand one thing, if they tell the team that it didn’t performed well as per the expectations, but in turn, this means that there were flaws in the leadership as well. Then how can they retain better bands than the team members. For C band also team members literally need to fight even after doing the hard work as if they are fighting for A band. They are convince by the leads that if they are getting a C band, that means they’ve performed 100%. I’ve never seen the leads performing more than 100%, then how can they get the bands better than the team members????

    The appraisal system in TCS is all fake. It deserves an E band for its performance review system.

    Passion

    • Dear Passion – Appraisal system can never be perfect. It will always have one flaw or the other. I agree that seniors may have an edge over other team members. Actually, goals do not comply to curve. If everyone will be fitted on a single curve then where does the concept of individual goals come into picture? Further, this process promotes competetition. One who gets C fights with B.

  3. Leela Mohan says:

    This is absolutely correct based on % bands are decided if good performer can miss A band with 1% also so that person will surely got affected in this system my suggestion this system is not proper it should be modify

  4. Frank says:

    There is no particular criteria to track the quality and amount of work done by an associate.For some assosiates its fixed whether they do work or not, and this is real shit.
    The person who shoes more gets more …….

  5. ashok says:

    This process surely needs to change..I dont know why a company like TCS following this predefined shit of allocating percentage fr performance bands..It should be simple if a person does well he shoud be given good band otherwise not..Its not like 40% should get C,20% should get D and shit..Many of the freshers are getting upset and willing to leave the company

    • I too believe on the same principle. May be bifurcation of performance is too much. We need to have just good, better and best as in many government organizations. Most of the poeple are good, only a few better and very few best. If most are in the same band then chances of such a fight will be low. However, we will go back to the system where we do not promote good work. Anyway, if good work cannot be measured then there is no point of rewarding or punishing on the basis of good work.

  6. TCS Mus Improve says:

    IT will never change because in TCS almost 40% of your pay is Variable Pay ( Performance Bonus). And by playing with Performance Band , TCs manages the increment with almost same amount. For example if one of the employee is given A band this year, he will not get the same band next year and it will be given to someone else. By rotating this Band so smartly that with same budget, performance Bonus amount is managed.

    With increasing number of fresher who do not know ABC of this game, this game will continue for long. Only the problem is that over all quality is getting down which will definitely impact brand value of TCS in long term.

    Though this is known fact but it is very easy to achieve cost optimisation targets and increase head count with minimal financial impact, Higher management will continue with this to make sure that their appraisal should not be impacted !!

    But in all these, competition have better system which is causing higher churn at middle level and higher level in TCS. Contribution of these two levels churn is almost 40% in over all churn at TCS.

  7. TCS Emp says:

    It is true fact that all Project leaders and above get A band, and they give junk reason to real hardworkers who are directly involved in deliveries that they should contribute beyond deliveries.
    They have lot of goals which are not related to delivery. Nowadays I see people (who are of course brilliant :( ) targetting more on these non delivery related goals and not doing anything for delivery. I really accept the fact that quality of TCS Deliveries will really go down if this sort of appraisal process continues.

    • I agree many of the goals are not directly related to deliveries and related to perceived value addition activities. However, what good will the value additions do if we are not good in deliveries. Management has to understand and I believe the new MD is slowly getting to that point.

  8. AK says:

    This is the worst company i have everseen or heard of, This year april12, they are saying they have managed to become 10 billion company.. The other side of this is that they have reduced salaries of many employees who fall in D band

    • Company works for shareholders and in some instances for the society. No company likes inefficient workers. Even at your home, you would prefer a worker, a laborer or a contractor to be efficient and you will not be willing to pay for laziness and inefficiency. If the people in D band are not good then they deserve to get less. Evaluation of associates in band D or E may be faulty but intentions are very clear and genuine. Don’t you agree?

      We all have problem with method of evaluation of associations and then assigning them bands.

      • Amit says:

        How can u compulsory say that at any point of time 30% of ur work force will work below expectation i.e. D category. What if all people in a team are giving 100%??? even in that case some one will get D i.e. totally wrong…Some one need to be victimized compulsory without any reason

      • Giridhar says:

        Why was the Evaluation of associate faulty? Why there are cases where a person truly working and improving in his carrier will be discouraged like anything giving him/her by a D band? Usually there’s no use even such issues were escalated to HR.. There are even cases where a person will not be judged but blindly given a D band saying he/she is new to project compared to other team members although they know that they have dependency on the person in future.

        In fact this is not only about Bands, there are even several unfortunate things in TCS which we face through my experience. Let me quote one example

        A person started his carrier in a project in TCS, Worked for the entire year like anything, coming in weekends, giving on-call support and coming back to office whenever there was some criticality(He was not even paid for all these things) And Finally he was given C band and obviously after doing a lot for the project, he was not satisfied, As its the first project for him, raised his concern to his management but didn’t get any proper response, Tried meeting his manager once, twice, thrice still no use. Got to know from his seniors that as a fresher its common to get a C band,
        Ok started giving another try for the complete next year, worked like anything, nodded for everything whatever management says, weekend support, 24*7 on-call support, stretching late nights, coming office to early hours, Learning two-three applications, doing the task of 2-3 people and all, Again he got the same C band. He was frustrated, what is the use of all the work he did? questioned himself while the good bands were already taken by management and others who run politics. Came to a conclusion that there is no recognition for him in the project, Asked release in the project just to get a bright carrier ahead hoping to go somewhere at least where people give recognition to his hard work and get some good band for next year.
        But things were even worse than what he thought, After doing lot of work in his first project, he got a lot of dependency, and management didn’t leave him, He was released after 5 months of financial year completed. He went to RMG, But no one suggested him any project, still roamed around them for 1 month, Realized things wont work like this, started going himself to projects where he got to know that there might be requirement based on his skill set. But nothing worked, RMG didn’t even care whether he reports to them daily or not In fact he himself got to know after sometime when he noticed in Ultimatix that RMG got changed but the one whom he reports don’t even care or mind but simply used to say “No requirement for your skill set” Of course the new RMG also doesn’t mind if he reports to him or not, Days passed by, the associate is willing to join in a project but not getting anything matching his requirement, However he tried his best that he met around 10 different project people to inquire if there is a requirement, out of which some of them were even worse that they used to let him roam around themselves and finally say we need even more experienced guys. By some means after 3 months he was released from old project, he got into a project with his contacts by changing his skill set adjusting himself and agreeing to work in different shifts, A big compromise, Just not to leave TCS. Started working like earlier, grasped everything fast as he just had 4 months of time to prove himself, And it didn’t take much time for him to get a big shock that he was awarded D band,

        Now Tell me MR. Project Manager, Who’s fault is here? Who’s mistake is this? Is it because of old project people who didn’t release the associate due to his dependency? Is it because of RMG who didn’t show him any project? Is it because of the new project people who haven’t seen his performance at all and blindly given him D just because he was new to project? Or should the associate blame himself for getting released from the old project just to have a bright future ahead?
        In fact you don’t have to answer because whatever you may say its ultimately the associate who is bearing the consequences here and such people never would like to stay in TCS after having this much of bitter experience.

    • Gajju says:

      same case wid me …..
      NO DA and other increments like Govt….

    • m d says:

      I agree. They are not playing a fair game here. How can a company reduce someone’s salary I fail to understand. If someone gets a b previous year and then gets a d for leaving the project(nothing to do with the performance! !) Then a huge margin of salary gets cut…how ridiculous!

  9. Goapl says:

    Appraisal ne kiya Sapane ko choor-choor (TCS ne Bajaya Band)

    Most of the companies are in the process of completing appraisal process for their employees. One of the companies is Tata Consultancy Services (TCS) through appraisal process employees get hike for the next financial year. Employees has thought of his future planning for the current year in terms of many things such as “Jeevan Yapan ke liye Daal aur Roti”, buying a new Flat, Car, TV, washing machine, Refrigerator, Microwave Oven and some investment for future use.

    But this year appraisal process in TCS has change the faces of the employee to depression, obesity and in tension because if the employee got the ‘D’ Band which is mandatory in TCS even if you don’t deserve for ‘D’ band. If you got the ’D’ Band your variable component will be reduce which is approximately 40% of the salary. And there will not be any increment for the entire year, and even your promotion will be on hold you will not get promoted in that year

    Even if your performance is good and your supervisor is happy with your work he is bound to give you ‘D’ band or lower due to the current company policy.

    Here question is if employee performance is lower comparatively to other associates then company may not give salary increment to the employee that is OK and somewhat acceptable but reducing the salary is injustice to the employee.

    What happen if you don’t get hike in this case probably you will feel little bit uncomfortable, cut your budget for things without which you can live. Here you will be doing some adjustment and compromise to live life. Consider another Scenario in which case your salary got reduced due to appraisal process. What happened to you if your salary get cut by say for example 40% probably you will be in depression, obesity, anger and all these things create many problems to employee to survive his family?. I have never seen before any other company except Tata Consultancy Services (TCS) cutting down salary of his employee due to poor corporate policy. Things are changing but policies are not.

    Let’s talk about the current policy:
    (a) 10-15% associates will be in ‘A’ band which is outstanding (employee performance is high).
    (b) 15-20% associates will be in ‘B’ band which is above average (employee performance is very good).
    (c) 40-45 % associates will be in ‘C’ band which is average (employee performance is average).
    (d) 15-20% associates will be in ‘D’ band which is below average (employee performance is not upto expectation).
    (e) 5-10% associates will be in ‘E’ band which is poor (employee performance is poor).

    With this above criteria and policy even if you have performed well you can go in the lower band when it is compared. This policy forcefully put the associate in D or E band even if they deserve C or B.
    This is flaw in the system and it has to be changed because it is related to employees if an employee of organization is not happy then how they will perform their duty fullest this will unnecessarily increase the tension, depression, obesity and many more health issue and people if in depression can do anything we have seen several example in past.

  10. reddy says:

    Appraisal process in TCS sucks. I think no other company has such a bad appraisal system.

  11. Ana Hazare says:

    TCS want there employee to be demotivated and leave the company.. because they have lot of fresher in very low salary to work..

  12. Sandy says:

    One Bad thing which is not highlighted in article is that the VA is completely dependent on the Performance Band. The appraisal discussion in is for the rating. But the payscale is based on Performance Band which is not transparent to the Employees. It’s been observed that the person having goood rating is placed in lower band if he/she not required in the project. Ideally Rating should sorted to decide the performance band but it is not happening practically. In a team of 100 associates there would be 20% managers and leads getting Band A or B. Goals are always places far away from your responsibilities so that there would be ease in Appraisal discussion with employee. Also target definition for goals are wierd. 1-90%, 2-100%, 3-110%, 4-125%, 5-more than 125%. Moreover managers distributes there work (eg. Billling activity) in the associates working under then. Isn’t it mean that Managers are doing their work to 100% and they should be rate less than 2.
    It might possible but in such case also upper level will reserve higher band for them. I also heard that managers give instruct lead to rate associates under them in 1-4. Why? For whome the rating between 4-5 is reserved. This appraisal system also degrades the salary at end of the year which is ridiculous. TCS is loosing associates because of this.

  13. Bond says:

    Mr ProjectManagerSoftware: Just for your consideration:
    1) Should not bell curve be maintained at each designation? (FYI: In tcs bell curve is maintained at project level and not designation) ie bell curve among peers. Seniors (PMs) are good in work (as well as politics) so they get higher ratings. If tcs maintains bell curve at designation level, every year it will remove non performing managers too.
    2) Indian Armed Forces (most competitive ) have appraisal review process. In appraisal review process, if a good performer drops next year and come back to higher performance level in next to next year (ex lets say a B rater is given C and next year he climbs to B again); appraiser and reviewer who rated him low are held responsible to it and punished (because the were not working in the spirit of organisation). His worst rating (C band) is reversed to his average (B band). Shall not a review process be there in tcs too. ohhh… now please do not tell me tcs has a review process…

  14. raju says:

    hey…..I want release from a project at any cost is there any possibility….!!! I am not worried about band….plz help me…how should i approach HR….

  15. Pratik says:

    I am proud to be a TCSer.and this year i have got band like others.but i am not satisfied with it.what should i do? and can i get any change in it?? how?? Management did their job because they are helpless.they need to give some % for “B” band,some % for “C” band. but they should have sympathy for some associate who works on weekends also & works for more than 10 hours. i have got “D” band.but i deserve “B” or “C”. Please help me what do now??? I have only two days to agree or disagree the given Band.

  16. brahma behera says:

    Really tcs apprisal system is very bad.Here the senior people are all about.Here there is no value for freshers.Freshers means you have to get D band.It does not effect what you have done.

  17. Pingback: IT, ITES Stressed – From Horse’s Mouth » FinHow

  18. Raju says:

    All “D” and “E” banders who think their band assessments were biased and subjective. They had become irrelevant to their current projects, therefore they were given these low salary-reducing bands may contact me at involvement@rediffmail.com only if you are willing to do something about it.

    May God bless you with mental peace to deal with the stress and courage to handle the insult to you ability, hard work, and future career prospects. May you also find a way to deal with the financial loss.

    Moderator, please allow this message. We need to tackle this issue in the IT/ITES industry, which is stressing IT workers, not necessarily because of their bad performance but due to the poor company policy. How can a company keep progressing when its 15-20% employees do not perform year on year basis?

  19. Deep says:

    Hello. I am Level 3 Windows Server engineer and getting a pay package of 11 lacs P.A. I have an experience of 6.5 years in I.T and I am a B-COM and not an engineer. I am thinking to joining TCS, but I have heard that for a non Engineer or Computer graduate TCS deducts 6 months of experience from total work-ex. Is that true? What is the experience they need for an Associate consultant? What is the top grade for ITA in TCS and what would be the package they would offer me. Any replies would be appreciated.

  20. TruthWillPrevail says:

    TCS appraisal cycle is really outdated and demotivating. It is based on the fact that they want an employee to leave after 3-4 years so that they dont challenge policies of seniors. Once an employee has handful experience, he demands his share and TCS doesnot want it employees to do that. Tata group companies boost about ethics but TCS appraisal cycle is in itself unethical. TCS label its emplyee underperformer without giving any reason, the only motive is to cut cost. I know a case where an associate went to ethical comittee to chalange his appraisal. They took his case initially but rejected it after 3 months of probe. The reason they gave that appraisal doesnot come under their preview. Then why ethics comittee took his case at first. After careful analysis it came out that there was pressure from HR dept to close the case. This is about TCS appraisal.

  21. konda says:

    konda
    TCS Appraisal Process is a game played by managers to safeguard their positions and give good ratings to the person they like, it is not based on the work an individual does.
    If an employee works 10 hours per day and during appraisal period if he works 6 hours in one single day ,they can prove that whole year he is working for only 6 hours.
    Ratings and Band sharing are very tricky games,usually if a person gets 3 rating he should be eligible for C band ,but its not the case they will say because of curve fitting he will deserve D band.An employee working who use to work very hard will be suddenly demotivated in ths type of case .To survive in TCS we should know how to manage ,but not required how to work.People who just manage and show case their work 20 to 80 % are successful,but people who really works 80 % will be awarded worst Band (D) .This system should change.Rating should be completely depend on Work the Associate does,but not what he showcase.

  22. Hi All,

    I joined TCS in Dec2009. I completed my 4th year on 29dec2013.But I had got D band in March 2013,C in March 2012 and C in 2011.Promotion was initiated in current project during 4th year completion on dec29 2013,but corporate HR put that on hold.

    Having said above,my manager,reviewer approved for ITA promotion and local HR also approved for promotion when I was completing 4 years of service on dec2013.But it remained pending at corporate HR. I followed up with current project manager and he advised that it may got delayed by one quarter and would be getting one TCS Quarterly result date on next quarter,means April17 2014.

    Considering above grievance,
    1)do you feel that I will get promotion on Date April 17 2014.
    2)My new band in March2014 will be C band as expected,so please tell me whether Promotion will come first or Annual Hike will come first.
    3)My current CTC is Rs4.25Lakh pa, so upon new C band, I AM expecting hike since my last year band was D.sO HOW MUCH HIKE it can be?people advised that Rs50-60k pa for getting D to C band.Is it correct.
    4)What is the normal pay scale for ITA for my case.As you can see that current ctc is Rs4.25lakh, new hike is expected.Then ITA hike is how much.
    5)If ITA PROmotion is rejected for D in March 2013 then when can I get ITA promotion letter.Do I need to initiate again when I will complete my 5th year on dec2014
    6)Considering that lots of decisioning is pending,please advise whatever you have experienced. Much thanks in advance

  23. Sameer says:

    Today TCS released its 2014 bands. Strategically, the bands are released on Friday after office hours and the one’s who pull the string are generally off on the subsequent monday.
    The story is not so exciting for me, as I am used to it in my last 7 years. I got ‘C’ in all the seven years for the following reasons in chronology – You are a trainee and not a value addition yet(1st year), Got released from project(2nd year), Visa in Progress(3rd year – note: visa never happened), Took transfer(4th year), New to the project – we don’t know what you did in last project and visa in progress (5th year – 4 months in new project) , you are at onshore (6th year), you just returned from onshore(7th year).
    All these years I stayed in TCS for my personal issues. I have set up my mind to quit this year, as this company is not adding value in my life.
    The top management is good in terms of business leadership, but they hardly look within. TCS middle and lower level managers are worst. Most of them are from x,y,z college with no real capability and have reached to their position just by luck.

    That was me – State University gold medalist.

  24. TCSer says:

    TCS appraisal cycle is only for name sake. It does not rate the person based on the performance. Performance based rating comes into picture only when the project is in need of those persons and if the Manager is a perfect person. Rest of the cases it is all a personal one. If you are aligned to the manager then you are very safe and need not worry of your performance and the work you do. But if a person is talented and do not care for the rating then he is fixed a C or a B. The people who work will be at a lower band and the persons who works for their managers and do what ever they say without saying a NO then they need not worry and think of their band. If a band is rejected by any one then there will be bare minimal attention to that neither by the appraiser nor the HR. If taken care also the HR and appraiser would just listen to the appraise and just leave it and say that we have done a lot but the higher management is very reluctant to change your band and I promise that we will give you in the next year. There is one more major dissatisfaction that if you get a lower band compared to the previous year than you salary also gets reduced accordingly to your designation. Over all the satisfaction levels for major of the associates are in a very demotivating mood…..

  25. ksh says:

    i got 4 rating in my final anniversary(august 2013) and in h2 i got a D band(april 2014)…my present package is 3.8..will my salary reduce?? if i get a D band again will I get terminated?? please reply as I am in deep tensed situation

  26. In the discussion that have ensued, the points raised by everyone are
    1. Associates get lower rating than expected. This is especially the case with junior associates/trainees.
    2. Rating/band is justified by their supervisors without the associates accepting that justification. Many a times, management layer gets the higher brands leaving little for others.
    3. Salary gets reduced
    4. Sometimes, associates do not get a chance to work sufficiently because of unavailability of work of their skill set.

    My suggested solution:
    1. I have big doubts on appraisal especially band structure on motivation of employees. However, this is what it is until some of those are in this list get to that level that they can make a change.
    2. I gave one solution for appraisal process improvement in my article, give yours to encourage higher performance of all associates.
    3. As Sridhar pointed out, he adjusted his skill set so he can get a new project, it can be a way for others. In fact, TCS would prefer that way. TCS has great training programs. One can learn a lot in the area one wants to learn at TCS expense.
    4. Talk to influential people and let people know you. There are multiple forums such as knome, participation in conferences, write white paper in knowmax and other HR events
    5. Persevere – it won’t give immediate results but it will give results eventually.
    6. Give your solution for improvement

    Let’s make this forum a solution finder for our good.

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