Notwithstanding the worsening unemployment situation across the globe, many employees in India’s corporate sector are not averse to quitting their jobs for greener pastures. The root causes of the trendy job-hopping are not far to seek if one considers certain factors that are peculiar to India.
A survey of 11,000 employees drawn from eight countries (the US, Canada, the UK, France, Germany, Australia, Japan, and India) between October 6 and 30, 2023, conducted by the Boston Consulting Group, suggests that a significant portion of the global workforce, about 28 per cent, is contemplating a job change within the next year. This figure includes individuals actively searching for new opportunities as well as those who may not be actively looking but are open to the idea of switching employers, according to the report. Interestingly, most of the employees surveyed, in their responses, said they were focused on functional factors, with pay being the overwhelming top choice, followed by benefits and perks, work-life balance, work they enjoy and care about, and better career learning opportunities.
As per the report, 26 per cent of the surveyed Indian employees are considering leaving their current employers within the next year. This figure underscores the challenge faced by employers in India, similar to their global counterparts, in retaining talent and addressing factors that might prompt employees to seek new opportunities.
In this broad context, The Pioneer’s Tanisha Saxena takes a close at the peculiarities of appraisal culture within India’s corporate landscape. It appears that, by and large, performance evaluations are undermined by subjective appraisals, favoritism, and a shocking lack of transparency. Through insightful interactions with domain experts and data analyses, we unravel the complexities of what is loosely bandied about as ‘appraisals’ across most parts of India.In India’s corporate sector, ‘performance appraisal’ is mostly a ritual that unfolds annually as a mere formality, rather than as a studied evaluation of an employee’s contribution. This grim reality has birthed a culture where job-hopping seems to be the only viable path to career advancement and financial growth. Many inter-linked factors contribute to this aberration.
The illusion of appraisals
Appraisals, intended to be a cornerstone of employee advancement and reward, often fall short of their promise. In many organizations, they are plagued by subjectivity, favoritism, and a lack of transparency. Employees often find themselves disillusioned when meritocracy is subordinated to office politics, leaving hard work of employees who count most unrecognized and unrewarded.
“In the Indian corporate landscape, appraisal criteria encompass various facets aimed at evaluating an employee’s overall contribution. These include meeting performance targets aligned with their role, maintaining a high standard of work quality, and demonstrating leadership qualities by taking initiative and fostering collaboration within teams. Additionally, innovation and problem-solving skills are valued, along with a commitment to customer satisfaction and adherence to company values. Professional development, as evidenced by participation in training programs and acquiring new skills, is also considered. Furthermore, factors such as attendance, punctuality, and feedback from supervisors and peers play crucial roles in assessing an employee’s performance. These criteria collectively aim to foster a culture of recognition and reward based on merit and genuine contribution to organizational success,” explains Arhcana S. Verma, Director, Womeki Group.
Despite the clear intentions behind appraisals, reality often falls short of expectations. Favouritism often seeps into the process, with managers showing preferential treatment to certain individuals based on personal relationships rather than objective performance metrics. This creates an environment of resentment and frustration among employees who feel overlooked or undervalued. Furthermore, the lack of transparency in how appraisal decisions are made only exacerbates these feelings of disillusionment, leaving employees questioning the fairness of the entire process.
Ashutosh Shukla, a corporate sector employee in Secunderabad, says, “I poured my heart and soul into this job, going above and beyond to meet targets and deliver results. I spent countless hours perfecting my work, fostering collaboration within my team, and constantly seeking ways to innovate and improve processes. Yet, when it came to appraisal, it felt like none of that mattered. Instead of recognizing my hard work and dedication, it seemed like my manager played favorites, showering praise on those who were in their inner circle while ignoring my contributions. It was demoralizing, to say the least. I realized that no matter how much effort I put in, I would never be truly valued in this organization. So, I made the difficult decision to switch job, seeking a work environment where meritocracy reigns supreme and hard work is genuinely rewarded. It is a shame that it had to come to this, but I refuse to settle for anything less than what I deserve.”The temptation of job-switching
Faced with a stagnant career, instead of progression, and meager increments, employees are increasingly enticed by the prospect of greener pastures elsewhere. Job-switching offers the allure of higher salaries, better perks, and opportunities for advancement that seem elusive within their current organization. The promise of a fresh start becomes too tempting to resist, leading to a revolving door of talent in many industries.
As per the global consulting firm PwC, “Younger India employees value autonomy in their careers, in line with the ‘polywork’ trend. 53% of Millennials and Gen Z, as compared to 42% of Gen X and 21% of boomers, are highly likely to voluntarily move to a contingent workforce within the next year, indicating their eagerness to work on their own terms.”
“Today’s workforce seeks not just employment but empowerment. The shift towards autonomy and flexibility is reshaping the employment landscape, with younger generations leading the charge. As talent increasingly embraces the ‘polywork’ trend, organizations must adapt or risk losing their most promising contributors to the allure of self-directed careers,” shares career counsellor Jatin Kumar.
In the context of the Naukri Annual Appraisal Results for FY 2021–22 report, the concept of appraisals is highlighted as a critical mechanism for evaluating and rewarding employee performance within organizations. The recent report published as a follow-up sheds light on how appraisals were conducted across various dimensions, including work experience, current salary, metropolitan locations, and industries.
1. Work experience: The report indicates that employees with different levels of work experience received varying increments during the annual appraisal cycle. For instance, those with 1-2 years of experience saw a significant percentage receiving increments of over 30%, while the percentage decreased for employees with higher work experience.
2. Current salary: Appraisal outcomes were also influenced by employees’ current salaries. While many employees expected significant increments, the actual results varied, with percentages receiving different levels of increments depending on their salary ranges.
3. Metropolitan locations: The report provides insights into how employees in metropolitan cities fared in terms of appraisal outcomes. Expectations regarding increments varied, with actual results showing differences in the percentage of employees receiving increments of over 30% across different cities.
4. Industries: The appraisal results varied across industries, with the IT services and consulting industry witnessing higher increments, compared to industries like banking, financial services, and the internet sector.
Overall, the report underscores the importance of appraisals in recognizing and rewarding employee contributions, while also highlighting the complexities involved in determining increment percentages. It emphasizes the role of appraisals in aligning employee expectations with organizational realities and addressing the evolving needs of employees within different contexts such as experience level, salary range, location, and industry sector.
Employer apathy and attrition
The consequences of this trend are not confined to employees who are dissatisfied. Employers bear the brunt of high attrition rates, resulting in disruptions to workflow, loss of institutional knowledge, and increased recruitment costs. Yet, many organizations seem resigned to this reality, failing to address the underlying issues that drive their best talent away.
The prevalence of job-hopping also fosters a culture of transience rather than commitment. Loyalty to the organization takes a backseat to personal gain, eroding trust and camaraderie among colleagues. This lack of stability can hinder collaboration and innovation, ultimately impacting the company’s bottom line.
“Appraisal is a relative culture. There seem to be lots of external factors that influence the appraisal an employee gets from any company. Politics at the workplace, favoritism, non- uniform work distribution, and workplace stress are a few to name. With the attrition in corporate companies across the world, you observe that every employee across the world is still looking for opportunity. Looking beyond the employees, the employers, managers, and HRs are all result-oriented and have set up key indicators for performance analysis of the manpower,” says Krishna Prasad Chagnati, a career counselor from Hyderabad.
A call for change
To break free from this vicious cycle, both employers and employees must take proactive steps towards meaningful change. Organizations must strive for greater transparency and objectivity in their appraisal processes, ensuring that merit is duly recognized and rewarded. Investing in employee development programs and career pathways can also foster a sense of loyalty and long-term commitment.
The report by PwC states, “Before recalibrating the workforce to make it future-ready, business leaders need to have a clear understanding of the expectations and requests of employees. Maintaining employee aspirations as a focal point will be the key to driving any transformational agenda. The findings underline that there is a greater likelihood of Indian employees asking for a raise or promotion, compared to the global average in the next 12 months. Further, 70% of India participants, as against 35% of their global counterparts, are willing to ask for a promotion. Last year, 59% of respondents said that they were likely to seek a promotion, and this was in the midst of the Great resignation.”
According to counsellor Krishna, “Talent needs a nourishing environment for high performance. Ensuring a happy environment in workplaces is not easy. It is a focused environment at the workplace; relaxation is not obvious. Talent acquisition is easier through various activities like walk-in interviews, referrals, campus placements, etc.; whereas talent utilisation and retention are the actual litmus test of talent management. Attrition can be controlled by proper HR policies, a detailed job description, sticking to the employee’s strengths initially, and training the employee to get better at their weaknesses.”
He elaborates, “Retaining talent is ultimately more cost-effective than constantly acquiring new talent. By treating the team as professionals, assigning tasks aligned with their strengths 80% of the time, and challenging their skills with new tasks for the remaining 20%, we can foster motivation and higher performance. Unfortunately, many companies do the opposite, de-motivating their teams and ultimately hindering productivity and appraisal outcomes.”
Improving employee satisfaction with
the appraisal process
“By integrating empathy into the appraisal process, organizations can create a more compassionate and supportive workplace culture where employees feel valued, respected, and motivated to succeed. Recognizing that employees may feel anxious or nervous in the appraisal process can help managers approach discussions with empathy. Managers should strive to create a safe and supportive environment where employees feel comfortable expressing themselves,” opines, Upasana Raina, Director, HR & Marcom, at GI Group Holding India.
Organizations can enhance employee satisfaction through transparent communication, fair and consistent evaluations, and opportunities for feedback and improvement. Organizations should ensure open communication between managers and employees throughout the appraisal cycle. Transparency in the appraisal process can be ensured by clearly outlining criteria, goals, and expectations for performance evaluation and by communicating how decisions are made and how performance is assessed to promote fairness and trust. Supporting the managers through training and coaching can help improve the overall effectiveness and fairness of the process and bridge communication gaps.
On resources or support that HR can typically provide to managers and employees for facilitating constructive performance discussions during the appraisal process, Upasana says: “HR plays a crucial role in providing resources and tools to facilitate constructive performance discussions. Helping employees understand that the appraisal process is not solely about increments or promotions but also recognizing their contributions, providing feedback for growth, and aligning individual goals with organizational objectives can shift their perspective and foster a sense of purpose. Providing support and resources for employees to improve their performance, develop new skills, or overcome challenges demonstrates a genuine commitment to their growth and development, reinforcing the idea that the appraisal process is an opportunity for improvement rather than mere evaluation. Providing access to automated performance management tools can enhance the fairness and effectiveness of evaluations and feedback by providing standardized criteria, data-driven insights, and comprehensive feedback, thus promoting a culture of continuous improvement. Considering managers play a very crucial role in the entire process, HR should offer coaching and support to managers to help them navigate difficult performance discussions and communicate with respect and empathy.”
In sum, in the labyrinth of India’s corporate world, the allure of job-switching often overshadows the potential for growth and fulfillment within one’s current role. However, by addressing the root causes of this phenomenon and fostering a culture of recognition and empowerment, both employers and employees can pave the way for a more sustainable and fulfilling career journey. It is time to redefine the narrative and reclaim the value of appraisals in shaping the future of work in India.
