Case
Teaching Notes
Supplementary Resources
Abstract
Mr. Jeevan Mehta, the Regional Head – HR, was rather unsure about the decision he had made. While Mr. Mehta thought he had worked out the best possible solution to Mr. Rajesh Kumar’s dilemma, he was not certain if it would pan out the way he expected it to. But then, the nature of the problem was also queer: the kind he had never had to deal with before. Mr. Mehta’s decision had the backing of not just Mr. Yogesh Desai, Rajesh’s reporting manager and performance appraiser, but also his department head. Yet, there seemed to be an air of doubt about the whole issue.
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2025 Sage Publications, Inc. All Rights Reserved
Resources
Annexure 1: IT Services Sector in India: An Overview
In the last two and a half decades, India has emerged as a major exporter of software services. The Indian software services industry has grown from USD 4 billion in revenues in 1998 to USD 108 billion in 2013, employing over 10 million people, with about 76% of it being for foreign markets. The IT sector’s contribution to India’s GDP and growth has been enormous. It has gone up approximately five times from 1% to 5%, in the last decade (Nasscom, 2008).
The industry has been able to enhance its service offerings to the clients by focussing on specialized verticals as well as by moving up the value chain from being an ‘outsourcing destination’ to providing end-to-end customized solutions for the clients. The industry has diversified its geographical presence by acquiring several firms and opening offices across the globe. There has also been a significant increase in captive offshore development centres set up by multinational companies in India. In addition, India continues to be a leading destination for offshore outsourcing of software and IT-enabled services (ITES). Growing digitization, wage arbitrage, and growing pool of English speaking engineers have been of paramount influence in determining the growth of Indian IT sector (Ethiraj et al., 2005)
Arora et al. (2001) in their study on the Indian software industry posited that the Indian IT industry is characterized by services rather than being product-oriented. It is predominantly focussed on exports and is largely managed by professionals and entrepreneurial managements. The industry is highly labor-intensive with labor costs at about 60%. Labor is characterized by knowledge workers who are professionals. Large and medium-sized IT firms recruit a substantial number of graduating students from engineering colleges across the country. The organizations train the young graduates in software development, in their extensive in-house training facilities. One of the key success factors of the Indian IT firms has been the ability to transform the raw skills of the labour force into firm-specific capabilities including programming skills. These aspects enable Indian IT organizations to deliver high quality technical services to a customer anywhere in the world (Athreye, 2005).
Annexure 2: Performance Appraisal Process in UTVC and AXZ
2a. Performance Appraisal Process at UTVC
UTVC had an annual performance appraisal system. The employee and the supervisor had a dialogue in the beginning of the financial year where the two mutually agreed on certain predetermined annual goals. The supervisor was supposed to have a one-to-one meeting with the subordinate every quarter to monitor the progress of employee towards the mutually agreed upon goals and to offer any support or help as needed.
At the end of the year, the employee’s performance was rated on a 10-point scale on various dimensions set at the beginning of the year. The supervisor could allocate marks up to two decimal points on each dimension and the average was then determined. The performance bands were then decided as follows:
Band | Range of marks |
A | 8.5 to 10 |
B | 7.5 to 8.49 |
C | 6.0 to 7.49 |
D | 5.0 to 5.99 |
E | Less than 5 |
The performance appraisal rating was then used for increment and promotion decisions. Notably, an employee who secured two consecutive ‘A’ ratings was put on fast-track promotion.
2b. Performance Appraisal Process at AXZ
AXZ had a bi-annual performance appraisal system. As in UTVC, the process started at the beginning of the financial year where the employee and the supervisor engaged in a goal-setting exercise for H1 (first half of the financial year). The two were supposed to meet again for a mid-year PA where the supervisor rated the employee on a 5-point scale. Further, the two could discuss revisions of targets for H2, if required. However, it was a common practice in the mid-year performance appraisal to continue with the pre-decided goals. At the end of the year, the supervisor again rated the employee on a 5-point scale. The total marks of the employee were then calculated on a weighted-average basis with H1 and H2 having the weights of 40% and 60%, respectively.
The composite scores were then ranked on a Bell curve at a ‘unit’ level. There were a fixed percentage of employees to be fitted on to the Bell curve as follows:
Percentage of employees | Band |
Top 10% | A |
15% | B |
60% | C |
10% | D |
Last 5% | E |
The performance appraisal rating was used for increment and promotion decisions. An employee who secured two consecutive ‘A’ ratings was considered for fast-track promotion. However, AXZ was conservative in awarding such fast-track promotions.
Annexure 3: Rajesh’s e-mail to Mr. Mehta with Performance Records
Dear Mr. Mehta,
I highly appreciate my composite score of 4.43. However, in my opinion, the performance band had not been fairly assessed: in spite of having achieved my goals, I have been placed in band B. I would like to present a snapshot of the activities/assignments carried out in FY 2013-14, both in the capacity as Team Lead and as an individual contributor.
I would appreciate meeting you, at your convenience, to clarify my stand.
Introduction to Project KPO
- Despite the small size of the team, our work is distinctive in the industry.
- Our team was formed in November/December 2010 with the objective of understanding the data structure. There were merely 2-3 basic MIS reports to start with. I joined the team in the first week of February 2011.
Contributions as Team Lead
- Our team created over 20 process notes which are being used by our clients as a benchmark throughout the project KPO.
- Although the assignments/projects had doubled, our team still delivered as per expectation. This was achieved despite the team size remaining the same (Five members since 2011).
In FY 2013-14, the presentation at the Annual Client Reviews Meet featured at least five out of 20 slides about Project KPO and the team’s contributions in it.
Individual Contribution
Savings for the Client and Appreciations Received
- Project KPO saved the client an average of USD 3.5 to 4 million per year.
- Mr. Davidson, client representation and Director at KPO, expressed his gratitude during various interactions and was very impressed with the professionalism shown.
- Mr. Davison has set an important target of automating all reports (over 20) in 2014. In the last 3-4 months, over 70% of the task has been completed and he is extremely delighted with the progress.
- On core Indian holidays, it was ensured that either I, or one of my fellow team mates, was at work in office, thereby ensuring zero interruptions in delivery. The professionalism thus exhibited had been highly appreciated by the client.
Learning and Development
- Organized several knowledge sharing events, which were highly informative to all team members on the floor.
- Conducted sessions on Knowledge Management for the previous three new recruit’s induction training.
- Was included as one of the core trainers for the up-coming induction training for new recruits for KPO.
- Out of over 50 applicants nationwide, I had been shortlisted for an external PhD programme in Management (Market Research and Analytics) at one of the reputed management institutes in India.
Showcasing our Company to the Outside World
- Authored an industry paper which was presented at an international conference on marketing.
- Co-authored a paper which has been accepted for publication in the next edition of the reputed International Journal of Business, UK.
Miscellaneous
- Organized several fun events at work for the floor, which were highly appreciated.
- A core volunteer at the CSR initiative initiated by our company. Awarded a service excellence certificate in FY 2014 for the activity.
- Received two out of twelve ‘Project of the Month’ awards in FY 2013-14.
- Won a silver medal in the Business Analysis Olympiad 2014.
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2025 Sage Publications, Inc. All Rights Reserved
