Snapdeal goes for new appraisal system

Snapdeal is replacing annual employee appraisals with trimester reviews, as one year becomes too long a period to evaluate staff performance in an industry which is on a fast growth path with quickly changing priorities and challenges. The new system means the 5,000-odd employees at the Delhi-based e-commerce company will go through performance appraisals and goal-setting every four months, in line with Snapdeal's own way of fixing its business targets.

"We follow a trimester-based approach to business planning and it is almost imperative for us to align our people to that," said Saurabh Nigam, vice president, human resources. The performance assessment for the first trimester, that is April-July, will be carried out by mid-August. The new system is based also on employee feedback. It is aimed at frequent engagement with staff and retention of high-potential employees in a market where managing expectation of a young staff is key to keep attrition under check.

At Snapdeal, the average age of employees is 26. "The pace at which the e-commerce industry is growing, a year is too long a time-frame to review performance and set goals," said D Rajiv Krishnan, partner, advisory services and leader, people and organization, at consultancy firm EY. "They have to do it rapidly, accurately and frequently." Founders Kunal Bahl and Rohit Bansal, along with the top management team at Snapdeal, have been the architects and sponsors of the new more fluid and frequent performance mapping and rating.

At the end of every trimester, there will be monetary and non-monetary rewards for employees based on the assessment, while the main salary hikes will continue to be at the end of the fiscal year. Snapdeal follows an April-March financial year. Global major Amazon follows an annual appraisal system, while local rivals Flipkart and Jabong have a bi-annual format.

Under the new system, Snapdeal will set organizational goals at the beginning of the trimester. Every functional head will have to determine his or her targets and link them to the organizational goals.

A similar method will then be used to cascade the functional goals to team functions and performance to bring business goals in sync with individual goals. An employee can have a maximum of five goals. Snapdeal has also articulated new performance metrics. These include innovation, being transparent, agility, regular review and feedback, and employee development and upskilling. The over-arching aim is to drive meritocracy, said Nigam. "If you do well, monetary and non-monetary rewards follow every trimester."

The employee survey by Great Places To Work showed the need to come up with a more robust and engaging assessment system. The company also looked at the best practices across the globe and incorporated them into the revised system. "The ecommerce industry has a very dynamic environment ... they have hired a lot of people from different industries with high salary package," said EY's Krishnan. "The stakes for success there is also very high. As a result if they have to succeed, they have to do things quickly and dramatically."

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