Our client is a specialized engineering company actively engaged in engineering, procurement, construction and commissioning projects. Catering to the global markets of oil and gas exploration, production, pipelines, terminals and refining, they are headquartered in Abu Dhabi with presence in Dubai, Singapore and Ghana.
The company experienced sudden exponential growth over a period of 6 to 8 months leading to active scaleup to support the new business growth. With the inflow of new people, the workforce strength at the end of 2019 was 4X times greater than the strength at the beginning of the year. The major concerns that the company faced was on two fronts, first the need to change the existing informal mechanism of rewarding people arbitrarily and second retain key business-critical talents. Based on the context our focus was to bring in a robust performance management system and sharper target parameters that is fair, transparent and rewards meritorious performance based on business results, individual achievement parameters and value-based behaviour criteria’s.
The scope of the project was deployed in 2 phases-
- Phase I – Facilitate the Performance Appraisal Process (Grading / Rating Employee Performance)
- Phase II - Goal Setting & Performance Management Process 2020 (Developing Employee Performance)
Considering the criticality of the project, it was essential that the entire exercise be positioned and communicated sensitively to garner employee understanding. Catalysis suggested that the company communicate officially the intentions behind the project, its purpose and the expected outcome. A consistent narrative capturing the project vision, prepared by Catalysis was released and shared by the company with all employees at different junctures of the project. It was also suggested that the Catalysis team meet the senior management and functional heads one on one to understand their expectations, needs from the project. This was done to avoid miscommunication, false assumptions and gather buy-in from key officials of the organization.
Phase I – Performance Appraisal Process
We reviewed the existing mechanisms of assessing performance, the way of work on the ‘as-is’ basis. All functions were covered; Engineering, Projects, Construction, Finance, HR, IT etc. The review was additionally supplemented with current organization chart, manpower numbers and cost.
Communication sessions were conducted for both office and site staffs to bring in understanding and awareness of the new process, templates and tools and address anxieties. Manager Workshops conducted to help understand their roles & responsibilities along with tools to manage the process.
Also worked with HR team to administer the process templates we created to calculate performance pay-outs in a structured, transparent manner. Communication docket for key stakeholders and employees detailing the process, pay-out scale and calculations were made and shared.
Phase II – Goal Setting and Performance Management Process
Organization-wide goal setting process was announced with release of the company financial and strategic goals created by Catalysis basis the company’s vision, objectives & priorities in consultation with the top leadership team. Using the objective-key-result (OKR) methodology goal cascading process was implemented down the line with redefined measurable key results. With the support functions, service level agreements (SLA’s) were defined and finalised bringing in functional alignment in the area of expectation and delivery metrics.
Based on our market experience, industry knowledge and benchmarks, a detailed analysis of company’s department-wise budget was done. Basis this study, Catalysis defined the qualifiers for Variable Pay Plan (VPP) linked to achievement of individual performance goals and business results. Performance parameters linked to VPP pay-out was designed as per the role criteria of individual contributor, people manager and senior management team. Diverse schemes were defined for project and non-project teams.
Process flow for a mid-term review along with workshops on feedback and evaluation of value-based behaviour were shared with key stakeholders to manage performance during the year.
With the new performance management system and the variable pay plan, the company received humungous positive feedback from its employees that had embraced the practice of transparent goals and clear performance parameters. The process helped put in the first steps towards institutionalizing a positive performance culture.