Just rewards

The company has a performance appraisal system that actually seems to work

More than two decades back, Oxford zoologist Richard Dawkins extended Darwinian evolution to culture. He proposed that culture is transmitted by imitation and 'memes' are the units that allow it to be passed on. If Dawkins is right, then the Tata Memes must be particularly dominant. They have carried the Tata values to scores of organisations - old economy and new. The youthful Tata Teleservices, which launched its basic services in March 1999, is one of the lucky recepients of the Tata memes - and the values that they encode.

It is mostly the sheer pride of being a part of the 120-year-old Tata legacy that attracts and holds people back in the Andhra Pradesh circle. Even though the firm is not the best paymaster in the business, it has a mere 4% attrition rate (industry average: 17%). Subodh Kumar, senior manager (network performance), who has been at the firm for five years, feels the respect the Tata name gets cannot be matched by rivals trying to poach talent. "Initially when we came in, because you had to go through the DoT, they were expecting bribes from Tata Teleservices. Not giving in to those demands has given us a huge reputation."

But Tata Teleservices is not just a clone of the Tata organisations before it. One of the evolutionary advantages it has acquired is a performance management system that actually has employee respect. According to a third-party research report, on fairness, the employee scores were 80% in 2001 and 90% in 2003; while on linkages between appraisals and rewards, they were 81% and 84%, respectively.

"In this organisation, you carry work load but not the pressure that the job could be under threat. That's because you know clearly how the performance has been," says A.V.S. Prasad, assistant manager (finance). That's partly because an employee is first evaluated within the function by everybody at the next level and then by the next level of other functions. The scores are plotted on a normal distribution (a relative rating is given) at the employee's level, across different functions, the circle, and, finally, the company. An appeals process keeps everybody honest.

The performance management system is the key impulse for some of the most significant people-related initiatives in the AP circle. Like other group companies Tata Teleservices wants to become a world class act by following the Tata Business Excellence Model (TBEM), which is based on the Malcolm Baldrige Award. Implementing TBEM is a component of the performance appraisal of functional heads.

The man who introduced the performance management system at Tata Teleservices, S. Varadarajan, is now with another company on our list: WiproSpectramind. But his former lieutenant and current AP circle HR head, Vipul Singh, is still refining the system alongwith COO Sandeep Mathur and other senior guys.

Mathur knows that the system can help him hold on to people with CDMA and other scarce skills. "People will help us meet our key challenge of acquiring and retaining customers as well as growing revenues. We now have to improve our recognition practices and give employees key skills that are in short supply in this business," Mathur says. By now, that's probably part of his appraisal.