Solution A
KALYAN CHAKRAVARTI
Executive Director, Cable Corporation

Umang would, in the long run, benefit from the introduction of the Assessment Centre technique. The company has formulated a growth plan that will double its production. As the demand for steel picks up, and the market becomes increasingly competitive, the executive team at Umang will have to take on new responsibilities. The Assessment Centre provides a scientific approach to recruitment--from both within and outside the company.

Shetty has chosen the right time to sell the Assessment Centre to the Executive Committee. In a fast-changing marketplace, Umang needs to hire the right people. His eagerness to market the idea is, thus, justified. Shetty has his job cut out for him in two areas. He should present a plan outlining the action elements, the time-frame, and the responsibilities. He should talk to his counterparts in companies that have already implemented the technique, scrutinise its successes as well as its failures, and place the findings before the Executive Committee. And Bakshi should examine the findings closely. That would help Umang draw its own roadmap for using the Assessment Centre.

However, one area of concern is the discontent that the Assessment Centre could generate among managers. Bakshi should conduct a survey to assess the insecurity at the managerial and supervisory levels. The findings of this survey will help design the pace, the content, and the methodology of the action plan. Once a decision is taken in favour of it, the issue of managerial insecurity should be tackled firmly, but gracefully.

The Assessment Centre is not a substitute for Umang's performance appraisal system; each has its role to play. The latter focuses on specific performance for a specified period of time against pre-determined, mutually-agreed, and measurable norms. It provides inputs for reward administration, development training, and, most important, dovetailing individual and collective performance to business targets. The Assessment Centre, on the other hand, can be used as a tool for measuring the potential of an individual to take on bigger responsibilities. They are, thus, two sides of the same coin, and must co-exist harmoniously for optimum effectiveness.

Too often, the results of a new technique assume the shape of an `efficiency bar' against future promotions. This happens not only with supervisors and managers, but also with hr professionals. It is a major pitfall. The scorecard of an individual who has undergone a programme at the Assessment Centre should only be one of the determinants of his, or her, progress. It cannot be the sole arbitor of an individual's career. At the same time, casting aside the scorecard altogether is a sure way of weakening confidence in the Assessment Centre. Bakshi must, through internal communication and appropriate action, reinforce the aim of the Assessment Centre across the organisation.

In a competitive environment, the quality of the managerial cadre is a critical determinant of any company's success. Regular improvements in turnover, margins, and competitiveness must necessarily be the cornerstone of Umang's strategy. That will be possible only with quality manpower. The Assessment Centre is an important step in the selection of suitable candidates for various positions, and in getting a grip on the training needs of the organisation. I believe that it could serve as a key input in the future success of Umang.

Solution B
Ratan Singh
Chairman, Alpha Assessment Centre

There are conceptual flaws in Umang's approach to the Assessment Centre technique. The members of its Executive Committee--Shetty, in particular--should get their basics right in four areas.

First, the main function of the Assessment Centre is to assess the potential of an individual. Its role in measuring performance--to which annual increments and promotions are, invariably, linked--is limited.

Second, potential appraisal is usually done at selection, or in the middle of one's career.

Third, while performance appraisal uses Key Result Areas (KRAs) as the yardstick for evaluating managerial performance, the Assessment Centre uses a basket of competencies. There is a difference. KRAs vary from job to job; there are 4 to 6 KRAs for each job. Competencies are standard; there are 20 basic competencies. What varies is the weightage of each competency in each job.

Finally, the Assessment Centre cannot be an integral part of a compensation plan. It is used to ascertain an individual's potential, selecting him, and identifying his training needs. So, it cannot be a component of 3p at Umang.

Most companies realise that selection of people through interviews leads to square pegs in round holes. It is important to get a fit between an individual and a job, and an individual and an organisational culture. The Assessment Centre can help Umang find the best fit. Determining the weightage of each competency in relation to the job should precede its creation. This should be done for all employee categories above the supervisory level. For instance, social skill is a standard competency. But the weightage it gets in customer-interface is higher than the weightage it gets in R&D.

Each competency will be measured at the Assessment Centre by experts using different techniques before arriving at a consensus. Once it is operational, it will make two components of 3p redundant: the Self-Review, and the 360-Degree Appraisal. The latter is driven largely by individual perception and, hence, is beginning to lose ground in companies that have used it. I believe that the findings of such the appraisal are indicative, not substantive, and have little bearing on a plan like 3p, where 90 per cent of the appraisal is linked to tangible results. When the Assessment Centre is used for selection, it delivers results by focusing on the best fit. As far as potential appraisal is concerned, there are areas which fall outside its purview. For example, the Assessment Centre does not measure the level of professional knowledge and neither does it give due recognition to the track-record. There are two other issues that the team could consider before taking a final decision:

Although it is necessary to recruit specialists, it would be underutilised in a company of Umang's size. It, therefore, makes sense for three or four firms in the steel sector to set up a common Assessment Centre, which will help reduce costs.

A better way would be to outsource this activity to an independent firm, where the tasks of selection and potential appraisal can be combined.

Of course, both approaches carry their own drawbacks with them.

Solution C
V.J. Rao
Vice-President (HRD), Godrej-GE Appliances

Umang has achieved consistent, and significant, growth over a period of time. It has recognised the need to proactively develop competent people to manage the needs of the business. It is evident that there are three issues facing Umang:

Building a competent team to meet its aggressive growth plans,

Driving it through effective performance management and reward differentiation,

And identifying employees with potential.

There are three basic issues in performance management and potential appraisal: the need for, and the role of, performance appraisal in relation to specific individual objectives, and its role in driving individual and company performance; evaluating individual employees in relation to organisational values; and identifying competencies of employees.

Umang seems to have an effective system of appraising individual performance against specific objectives. Its move from a traits-based to an objectives-based appraisal is definitely a positive step. 3p seems to have achieved the objective of differentiating and rewarding performance, and driving the achievement of its business goals. The issue of building cushions while setting targets is always a possibility. It can only be taken care of by constantly reviewing the goals set, both internally by superiors, and externally by benchmarking against the best-in-class in the sector.

360-Degree Appraisal may not, however, provide actual feedback on performance since individual objectives may not be known to the people involved in providing the feedback. It is, therefore, quite possible that there could be a dissonance between the 3p appraisal and 360-Degree Appraisal since they provide measures on two different sets of characteristics.

That is why the 360-Degree Appraisal system is used only for development purposes by most corporates. It is also possible that an employee may achieve all his objectives and yet, not reflect organisational values. It would, of course, be inappropriate to discount the 360-Degree feedback, as Bakshi suggests. Most companies using the technique have a matrix of performance and values, and use it to look at both sets of characteristics to arrive at the overall feedback.

The Assessment Centre is a different concept, and should not be confused with either the 3p appraisal or the 360-Degree technique. It is useful in assessing the extent to which employees exhibit the competencies required for optimum performance in a specific job. By its design, the Assessment Centre provides for a number of exercises, individual and group, and simulations that provide observable behaviour. The observers are also trained to ignore individual biases.

But the Assessment Centre technique needs a lot of administrative support. It is time-consuming and expensive. A lot of preparation--such as defining jobs, accountability, and competencies--is required before putting people through the process. Generally, frequent changes in the appraisal system tend to confuse employees, and lower the credibility of the system. I would, therefore, recommend that Umang refine both its performance appraisal and 360-Degree Appraisal techniques. It should not use the Assessment Centre as a regular technique, but employ it to select people from within and outside for specific roles.

The Assessment Centre could also be used by Umang for development purposes. Which would establish the credibility of its management in selecting suitable people for relevant positions. The results are not always 100 per cent accurate since a number of extraneous factors could influence the behaviour of an individual in the future. Shetty should, therefore, oversell the Assessment Centre technique as an answer to the issues of performance management and competency-creation at Umang.

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