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Deloitte PMS report

ContentsIntroduction to Deloitte...............................................................................................................................2

Deloitte’s Performance Management and its Vision, Mission, Strategy and Values...................................2

Performance Culture...............................................................................................................................2

Performance Outcome Components.......................................................................................................3

Design Thinking.......................................................................................................................................4

Performance Management System – Overview..........................................................................................5

Performance Management System – Then and Now..................................................................................5

Performance Evaluation System:.................................................................................................................7

....................................................................................................................................................................7

Performance Management Cycle................................................................................................................7

Planning:......................................................................................................................................................7

Types of Goals:............................................................................................................................................8

Competency Model at Deloitte:..................................................................................................................8

Career Plan Form as a part of PMS:.............................................................................................................8

Performance Appraisal Form:......................................................................................................................9

Performance Management System and Promotions:..................................................................................9

HR view of the old system.........................................................................................................................10

HR view of the new system.......................................................................................................................10

Employees’ view of the old system...........................................................................................................11

Employees’ view of the new system..........................................................................................................12

Critical Review...........................................................................................................................................13

References.................................................................................................................................................14

Online References.....................................................................................................................................14

Appendix: Survey Questionnaire...............................................................................................................14

Introduction to Deloitte

Deloitte is a network of professional services firms which employ more than 210,000 individuals across the world. The brand has a history of over 150 years and a presence in 730 offices in 150 countries. The network is made up of member firms of Deloitte Touche Tohmatsu Limited, a UK based firm. The associate firms provide audit, tax, consulting, legal and corporate finance services.

Deloitte’s Performance Management and its Vision, Mission, Strategy and Values

Deloitte recognizes that performance management and talent management needs to be agile in the times when mobile and global workforce are gaining strength and importance as a result of enabling functions such as technology which has transformed the way people work, communicate and engage with each other. Hence, Deloitte establishes that it needs to have less formal and frequent progress review points. This is in line with Deloitte’s Vision and strategy which focuses on people working together as one geographical and functional business.

The process of goal cascading in Deloitte is communication of strategic goals, development of targets for each service line within each functional area and setting of plans for each individual.

Now, we will study various components of Performance Management System and how they are related with the Vision, Mission, Strategy and Values of the organization. It discovers unearthing the underlying relationships between the two and how the performance management system is enabling the organization to achieve its vision and mission, along with laying importance on its strategy and values.

Performance Culture

Also, Deloitte aspires to be a standard of excellence and the first choice of the most sought after clients and talent. It aspires to deliver excellence in all of the services provided by the member firms. To achieve this Deloitte:-

Establishes Performance Culture which clearly articulates the expectations and consequences from one. It holds the people accountable for organizational results.

It differentiates performance and lays emphasis on providing quality feedback on individual performance.

Incorporate appropriate and suitable reward strategies It focuses on employee development and training.

This can also be reflected through the how Deloitte defines performance culture:-“For Deloitte, a performance culture is about delivering on our promises and striving for results to create business and individual success”.“Our employees make promises to the firm (“Your Promise”) and our leaders and the firm make promises (“Our Promises”) to enable our employees to excel and deliver on their promises.” To achieve this, a project team was established in 2007 to develop a framework for a sustained improvement in Deloitte’s performance culture.

Also, as Deloitte’s mission is to enable its employees to develop insight, expertise, problem-solving skills, and deep knowledge of globalized marketplace, it promotes a performance culture which signifies self-directed individuals and nurtures them through coaching. It fosters performance management based on Quantified outcomes – Competencies, Values and KPI’s. This is also achieved through its performance evaluation system which determines the gap between actual and expected performance and facilitates establishment of training needs, career and succession plans, improvement plans and performance based compensation structure adjustment.

Performance Outcome ComponentsDeloitte aims to strengthening their daily efforts which will come together exponentially to benefit a world that needs continuous infusions of integrity, business acumen, innovation, enthusiasm, thoughtfulness, and most of all, meaningful actions.

This is achieved through the division of Performance outcome into 3 parameters-

1) Business Objectives – These are tangible and measurable business outcomes that contribute to firm’s success. Hence business acumen and meaningful actions collaborate to deliver these business objectives.

2) Competencies – These are the skills and knowledge you require to deliver upon the business objectives. It enables its employees learning and growth opportunities which nurtures their skills and boosts innovation abilities.

3) Signals – These are the behaviours you display during the course of achieving your business objectives and developing competence. These are clearly defined in the shared values which distinguish Deloitte’s culture:-

Integrity Outstanding value to markets & clients Commitment to each other Strength from cultural diversity

Design ThinkingAs Deloitte acknowledges its critical role in helping both the capital markets and its member firm clients operate more effectively, Design thinking can be termed as one the firm wide approach undertaken by Deloitte to achieve the said objective. It is a creative, iterative process relying on a ‘human centered’ discovery process, followed by iterative cycles of prototyping, testing and refinement. Its characteristics are:-

Ability to combine empathy, Creativity, Rationality to meet users’ needs and drive business success

As one of Deloitte’s values is providing outstanding value to the customers, Design thinking helps in it as it is a people-centric approach. It looks at the people needs and generates alternatives to satisfy its customers.

The four elements of Design thinking come together to accomplish this:-

1. Insight – recognizing what is important, reframe and seeing the world with fresh eyes (heart of innovation)

2. Iterate – cycle through a robust process (to transpire solutions and strategies)3. Empathy – understanding people deeply (to lay a strong foundation)4. Diverge/Converge – a mode of creative ideation used throughout (building creativity by

loading and unloading)

Performance Management System – Overview

In 2007, the entire performance appraisal system was moved from paper to an online portal. The goal setting and self-appraisal need to be uploaded by the individual. The reporting manager’s (referred to as Counselor in Deloitte) review and overall rating can be viewed her too.

Three main performance outcomes are measure – business objectives, competencies and values (behavioral signals).

Some of the metrics used to measure business objectives are gross service revenue, utilization rate (amount of time spent as chargeable to clients), number of training hours and revenue per client.

There are three groups of goals set at the start of the year - developmental goals, performance goals and career goals. Developmental goals refer to working on certain competencies as suggested by the reviewer and performance goals mostly refer to utilization rates. Career goals focus on attaining appropriate professional certifications like CPA, ACCA, and CFA etc.

Performance Management System – Then and Now

Before 2015, Deloitte’s performance management system consisted of an interim and a year-end review with 360 degree tools. Individuals would be given goals at the beginning of the year and evaluated on whether the met the goals for every project they worked on. The year-end rating would be decided

through ‘consensus meetings’ where groups of counselors would discuss their reportees. Overall rating would be given on 5-point scale.

The performance management system is undergoing major changes as of early 2015. It was calculated that a total of 2 million hours a year were being spent by all the employees collectively in filling forms, having consensus meetings and giving ratings. It was also found that once a year feedback is less valuable than feedback about actual live performance.

Thus, a new radical system is being introduced. The process will consist of only immediate supervisor feedback. After every project completion, an individual will be evaluated by his/her supervisor on 4 key statements. These 4 parameters as disclosed by Deloitte in the Harvard Business Review article of March, 2015 are:

1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus [measures overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree”].

2. Given what I know of this person’s performance, I would always want him or her on my team [measures ability to work well with others on the same five-point scale].

3. This person is at risk for low performance [identifies problems that might harm the customer or the team on a yes-or-no basis].

4. This person is ready for promotion today [measures potential on a yes-or-no basis].

Administrative decisions such as compensation and promotion will be taken by groups of leaders taking into account the data from the supervisor’s feedback as well as factors such as project difficulty and other contributions to the organization.

It is hard to say if these changes have been influenced by the new leadership of Deloitte. Punit Rejen, Chairman of Deloitte US firm, was elected and appointed as Deloitte Global CEO in Feb, 2015.

A snapshot of changesPre-2015 Post-2015

Year-end rating on a 5-point scale No ratings. Only feedback.Frequency: annual with an interim review Frequency: After each project completionMultiraters including managers, peers and subordinates

Only immediate supervisor

Performance Evaluation System:Performance evaluation system at Deloitte is more focused on developing the competencies of its employees than focusing just on promotions. Therefore, by replacing annual performance appraisal processes that revolved around competitive forced ranking with new system of regular feedback and continuous coaching and development ensures fully fledged development of its employees. The rationale behind feedback and development approach is to reward high performers accordingly while encouraging the large swathe of average employees to improve. Provision of resources like feedback, training, and on-the-job will aid the average employees to increase their level of achievement. Counseling at Deloitte is a communication that focuses on understanding the employees and working out plans for their growth and development.

Performance Management

Cycle

Planning:The counselor uses the information drawn out from the employee as a basis for setting relevant goals pertaining to employee’s job targets as well as career development.

Types of Goals:1. Competency Development Goals: Acquiring the required skills and competencies2. Performance Goals: Emphasize on results that one needs to achieve. Focus on contribution.3. Career Goals: Reflect the employees’ professional ambition and personal interests.4. Project Goals: Ensuring the conformity of agreed upon goals with the goals of an ongoing

project.

Competency Model at Deloitte:1. Manages Quality and Risk2. Focuses on Client3. Knows the Business and the Industry4. Solves Problems5. Develops Others6. Develops Self7. Builds Relationships8. Communicates Clearly and Effectively9. Manages Change10. Develops Business11. Manages and Executes projects12. Manages to Results

There are three proficiency levels:

Foundation Level: Professionals are expected to demonstrate the above behaviors. Advanced Level: Professionals are expected to demonstrate the behaviors at a higher skill level

due to increased experience. Mastery Level: Professionals are expected to demonstrate the behaviors at the role model or

subject matter expert level.

Career Plan Form as a part of PMS:The Career Plan form at Deloitte comprises of 5 sections:

The Administrative Data Performance Improvement Goals: The development needs pertaining to the competencies

required for a given level. Career Development Goals: Ensures work related goals are complimentary to personal goals. Performance Results Plan: Developed by the counselor after the career planning meeting with

counselee. Approval and Update

Performance Appraisal Form:It is based on six evaluations areas:

Professional Skills Problem solving Proactive Behavior Communication Skills Teamwork and People Development Meeting Deadlines

Performance Management System and Promotions:Promotions through the various levels is based on performance which is a combination of demonstrating proficient technical skills, consisted behavior, achieving the target goals , completing the learning cycles and contributing to organizational growth and profitability.

HR view of the old system

The HR is of the opinion that the current performance management system, which involves evaluation of the work of the employees followed by training, promotion and compensation adjustments, doesn’t fulfil the intended objectives of the system since it focusses on past performance rather than fuelling future performance. Though the process is fair, it is not the best design for Deloitte’s emerging needs. Also, a huge amount of time is being invested in the course of the process.

In the current system in which a person’s skills are assessed, there is a lot of scope for ratings to be influenced by raters’ individual perceptions. Additionally, rating a person in terms of just a single number seems very narrow and one-dimensional.

HR view of the new system

The new system is very simple and different in its design. Its hallmarks are speed, agility, one-size-fits-one, and constant learning. It is mainly based on 3 objectives - to recognize performance, see performance, and fuel performance.

Recognition of performance is mainly done through variable compensation, which is already present in the current system.

Performance assessment in the new system is done by way of four key statements to be responded to by a supervisor. The statements are an assessment of the supervisor’s own future actions with respect to the subordinate rather than an assessment of the subordinate’s skills. This reduces the effect of the raters’ individual perception to a great extent and therefore helps to see performance in a reliable manner. When this data is aggregated over a year, weighting each according to the duration of a given project, it produces a rich stream of information for leaders’ discussions on succession planning, development paths, or performance-pattern analysis. Hence the focus is more on responding to facts rather than ascertaining them. Also, this process would be done at the end of every project, so it allows to quickly capture performance at a single moment in time.

The new system calls for regular (at least once a week) check-ins by team leaders with each team member about near-term work. This is ensured by the team member. This serves the purpose of fuelling performance. In these conversations, individual members would understand and explore their strengths using a self-assessment tool and present those strengths to their teammates, their team leader, and the rest of the organization. Hence people’s strengths are given importance in the new system.

Employees’ view of the old systemShreya Adya (Analyst, Deloitte Consulting US India Pvt. Ltd)

At Deloitte performance are rated on a scale of 1-5, 1 being the highest. Parameters taken into consideration are project performances, off-project performances after a minimum number of training hours are put in. The system is totally transparent and employees are given reasons for the rating given to them. The ratings are usually not a shock and employees have an idea beforehand about the rating they will be getting. A review meeting with manager’s manager is also conducted to remove biases and ensuring a broader picture is considered while rating performance. People tend to overwork just before appraisal to impress managers and get higher ratings i.e. Recency error does occur at Deloitte. Strict Non-Disclosure policies and employees are instructed not to disclose rating and share feedback with peers.

Harleen Kaur (Business Analyst, Deloitte Consulting US India Pvt. Ltd.)

Harleen Kaur had almost the same points as Shreya. Other than those she added that Deloitte followed a Time sheet compliance where a record is maintained for recording and tracking the amount of an employee's time spent working. No advantage is given to senior employees as performance is the most important rating parameter and there is no parameter for experience. She also added that there is no customization according to role and the same format is followed across the board. Managers include inputs from global stakeholders before deciding on the performance appraisal. There is mixed reaction to this and many people feel it is necessary for the managers to use their own judgement and see to the extent of which the inputs from the stakeholders are valid.

Isha Bodh (Consultant, Deloitte Consulting US India Pvt. Ltd.)

According to Isha, Deloitte follows a performance culture. Her performance is usually recognized and her manager seeks her opinion before coming to any conclusions. A review meeting with her manager’s head is conducted before finalizing her rating to avoid biases if any. Guidelines are there to keep the ratings confidential. Being a performance driven company, seniors do not have an advantage when it comes to rating. It is done twice a year and is used for compensation and training purposes. She is not sure about how effective it is.

Vineet Jain (Systems Analyst, Deloitte Consulting US India Pvt. Ltd.)

Vineet said most employees join as college graduates and they are usually given a rating of 3 which means there is central tendency error and forced distribution is not followed at Deloitte according to Vineet. According to him people don't usually report about any discrepancies or issues they have with the rating given to them. They feel it is useless and no action will be taken. The pay packages are decided in the month of January and hence employees are forced to believe PMS at Deloitte is of no worth.Shatabdee Tripathy (Business Analyst, Deloitte Consulting US India Pvt. Ltd.)

Shatabdee Tripathy found PMS at Deloitte extremely objective. It is more of a performance review than a judgement tool. She said it was very helpful and followed a constructive feedback mechanism to record past achievements, strengths, areas of weaknesses and outline her goals. Two types of ratings were used, one in which she rated herself on a scale of 1 to 5 (1- highest, 5-lowest) and the second in

which her supervisor rated her in a similar scale. Only after the rating he gave her was accepted by her, it was registered. The rating was used as one of the factors to determine her increment or variable pay component. It was a satisfactory PMS at Deloitte as per Shatabdee. It was done twice a year, mid-year review (august) and year-end review (March). Ratings were given only after interaction with supervisor. Overall she was happy with the PMS at Deloitte.

Surveys

We asked certain questions to employees of Deloitte through a questionnaire. We did not ask about their identities to ensure honest feedback from them. From the replies we got we found that

1. All felt that their appraisals were unbiased.2. All feel that performance management system helps them improve their performance.3. Most of them feel free to express their views to their supervisor.4. Some agree to the fact that relationship with superiors is a determinant of the rating one gets

while others disagree.5. The answer to the instrument used question gave 3 answers, bell curve, 360 degree feedback

and 180 degree feedback.6. Most of the employees could relate their performance to the VMO of the organization.7. PMS is used for promotion, training and compensation.8. Most of them say goals and objectives are set after discussion.

Employees’ view of the new system

So far the new system has been piloted among only about 10% of the global staff. Thus, the employees’ view of the new system will need to be evaluated after one performance review cycle post network wide rolling out of the system.

Critical Review

On the basis of the survey conducted and employee interviews, we are of the opinion that the new PMS system adopted by Deloitte has been moderately successful in overcoming some of the earlier drawbacks. The new system has helped in reducing lot of time in processing of the appraisal forms due

to decrease in number of supervisors, also its biannual nature is aligned with the objective of the company that is in developing individuals. The new PMS is aimed at solving hurdles with regards to the process and making it more meaningful to employee’s instead of a becoming a mere salary appraisal tool. Another facet of improvement is in terms of regular monitoring achieved by feedback sessions after every project which was lacking in the earlier system. New system is free from biases like recency and not very skewed like the earlier system. In our opinion the new PMS system still suffers from certain drawbacks or constraints which may pose hindrance towards achieving 100% employee acceptance of the process and 100% intended job accomplishment. The main flaw as observed by us is the subjectivity that is introduced in the system by including only feedback as judging parameter. Feedback should be considered with another way of measuring performance. Feedback helps in working towards improvement in future whereas the other parameter can help with measuring performance so far. The system is completely futuristic and negligibly past oriented.

The new system has been very recently introduced and hence employee opinion and HR opinion regarding the new process will be positively biased. The exact opinion will be reflected after maybe 2-3 cycles and after exposing the new system to the entire employee base. We have based our opinion on the basis of the existing reviews and hence there may be variations in our recommendations with change in the reviews.

References

1. Success Connect 2012 PERFORMANCE MANAGEMENT GOING AGILE Nicolle Strauss Director, People Services, Deloitte, 5/30/2012

2. Performance Evaluation in Deloitte, Doing things the right way, Marina Tulskaya, Deloitte

Online References

1. http://www.washingtonpost.com/blogs/on-leadership/wp/2015/03/17/ deloitte -ditches-performance- rankings-and-instead-will-ask-four-simple-questions/

2. http://www.hrmagazine.co.uk/hr/features/1148344/annual-appraisals-losing-impact

3. http:// deloitte .wsj.com/cio/2014/06/10/its-official-forced-ranking-is-dead/

Appendix: Survey Questionnaire1. Since how many years have you been working with this organization?2. Do you feel your Performance reviews are biased?3. Do you feel performance management system helps you on an individual level in improving your

performance?4. Do you feel free to express to your appraiser any disagreements regarding the appraisal

decisions?5. Do you feel your relationship with your seniors affect the rating you get during Performance

Review?6. Which performance management tool does your organization use?7. Are you able to relate your performance to the vision, mission and objectives of the company?8. What is PMS used for?9. Are your goals/objectives/targets set post discussion with your manager?10. Does the performance review system followed in your organization is structured as such which

provides senior members leverage over the juniors? If yes, kindly provide a justification for it.