Clients to decide salary hikes at Cognizant, Wipro

For roughly 30,000 client-facing executives at India's No.3 software services exporter Wipro, this year's performance appraisal will be different.

The Bangalore-based company, whose customers include Citigroup and Cisco Systems, has embarked on a new experiment, in which its sales executives are ranked and graded based on customer feedback, with 70% of the performance rating coming from them. "If your customer says this guy is lousy and your boss says terrific, it's not going to matter. Customer feedback is going to be a priority," said TK Kurien, chief executive of Wipro told ET in an interview last month.

"That cultural change is what we are going through. And my sense is that when it finishes we will be in a far better position." Kurien, who has been beefing up Wipro's sales team, said the initiative is part of a '360-degree survey' where everyone, including project managers, will be covered. Wipro is not the only one adopting this.

Cognizant, Mindtree rely on feedback

The need to better evaluate sales staff and improve their relationship with top customers is forcing other big players in the Indian technology services industry to place greater emphasis on client feedback while assessing staff performance.

Senior IT industry executives say linking customer feedback with key result areas drives positive behaviour among executives to ensure enhanced customer satisfaction. "If an executive falls short of meeting or exceeding desired client satisfaction levels, it has a directly proportional impact on the annualised variable payout of the individual," said Prithvi Shergill, chief HR officer at Noida-based HCL Technologies.

At New Jersey-based Cognizant Technology Solutions, which has most of its employees based in Chennai, quantitative and qualitative feedback from clients are part of each leader's individual bonus plan.

The company organised a planning session for its clients and board of directors, where the board had a chance to hear feedback from customers, said James Lennox, its HR head. Vidya Santhanam, director, people function, at midsized firm Mindtree, said in future the company's delivery platform will "enable clients to directly give feedback to each project member".

Employees appraised using customer feedback are almost always sales and other client-facing executives who are responsible for raising client satisfaction levels. Since most of their interaction is with clients, companies say it is only fair if these executives are appraised by clients.

Besides evaluating employees better, it also helps companies do away with the ageold annual performance appraisal process, where managers and their subordinates discuss goals and performance. But not everyone is excited.

Some industry experts say placing a higher weightage on customer feedback may fail to motivate employees. "The practice of using client feedback to appraise employees isn't accurate because of the nature of products and services being delivered to these clients by IT companies," said Ajit Isaac, MD and CEO at Ikya Human Capital Solutions.

"Essentially, services rendered by IT firms are an aggregation of firms, and no one employee, or group of employees can be appraised based merely on feedback."

Elango R, HR head at Mphasis said the company has been using consumer feedback to appraise employees for the past couple of years, but it faced problems as "over-enthusiastic customers gave really extreme feedback". "Relying entirely on this method gave a very one dimensional view of the employee. In cases of extreme feedback, we would now discuss it with the customer and employee individually to figure out why," he said.