HRM case study

1. 1. Amit Prakash Singh (CGT21002)
2. Dipanjan Sengupta (CGT21005)
3. Indranil Ghosh (CGT21006)
4. Mohd Zinhar Uddin (CGT21010)
5. Bhargav Sri Dhavala (CGT21027)

2. 2
AGENDA
Issues in Existing Performance Evaluation Process
Curious Case of Mr. Varun Mathur
New PMS features
Existing PMS system
Recommendations
IDFC
PMS
01
05
04
03
02

3. 3
 A uniform PMS creates inappropriate incentives ( inequity ) across IDFC’s businesses,
especially in case of project finance owing to long tail risk and retail operations owing to
their inherent repetitiveness.
 Inadequate incentives for non-revenue earners (Shared Services) critical to the business
 Decreased incentives in case of some segments
 Cross selling tricky to execute given the need to bring in additional product knowledge and
manage clients across businesses
Issues in Existing Performance Evaluation Process

4. Personal interest
dominate over
organization’s
objective
Comparison of output
and input ratio of
fellow colleagues
SELF-
INTEREST
EQUITY
ISSUE
SOCIAL
EXCHANGE
THEORY
Employees and their supervisors and organizations
build social exchange relationships
AGENCY THEORY- All managers
are agents and must act on
behalf of organisation

5. 5
As the case mentions, the Project Finance group faces significant long-tail risk due to a long
gestation period and uncertainty of external factors
It would be difficult to capture the quality and quantity of output within an annual appraisal
cycle
Also, it is the core business for the company, and it is highly important that the senior level
employees, especially high performers, get what they deserve. This proportionate reward is not
only in terms of compensation but also recognition and an influential and powerful position
Hence, notwithstanding the metrics and analytical framework given in the case, it seems prima
facie that Varun Mathur deserves to be a part of the leadership track
Considering the above facts, the optimal solution would be to gauge Mathur keeping in mind
external factors and giving them enough weight so as to make sure that he is able to make
partner
Existing PMS

6. NEW PMS FEATURES
BALANCE
SCORE
CARD
DISTRIBUTION
CURVE
MULTIPLE
METRICS
WITH BSC
FIXED AND
VARIABLE
PAY
.
Middle management & above : Multiple
metrics with BSC (45-70%) as just one
component , Leadership (10-15%) , Cross-
selling (0-20%) , Cultural alignment (0-10%) ,
Business group performance (15%) , 270
degree feedback (10%)
Ratings were given to the company,
groups as well as individuals through
distribution curves
Fixed pay was benchmarked to the market
median. Variable pay was in line with the
market median pay, business unit
performance, contribution to overall IDFC
performance as well as individual employee
performance.
Individual performance below the level of
middle management : Balanced Score Card
(BSC) – Financial performance, customer
engagement, internal & external standards ,
employee engagement

7. 7
THE CURIOUS CASE OF MR. VARUN
MATHUR
Name- Varun Mathur
Position- Senior director and Head of
the Energy vertical
Reporting Manager-
Vinayak Mavinkurve
Business Group- Project Finance

8. 8
•Recent policy changes such as land acquisition and
environmental regulations have impacted IDFC’s
infrastructure business. Domestic fuel shortages and rising
coal prices have led to poor financial health of existing
power companies and postponement of new power projects
External Factors
affecting
performance:
•It is evident from the manager’s remarks that Varun didn’t
put considerable efforts in area like cross-selling, leveraging
client relationships etc. He also scored only a 3 rating in
cultural alignment
Individual
Factors affecting
performance:
Performance Factor

9. Candidates
Business
Group
Rating (10-
11)
Rating (11-12)
Rating (12-
13)
3-year
performance
rating
Leadership
(50%)
Culture
Score
(15%)
270-degree
feedback
(10%)
Partnership
Score
Varun Mathur Project Finance 4 4 3 36 40 33.5 37.5 37.1
Prashant Kant IDFC MF 4 4 5 43 10 22.5 25 29.8
Ashok Kapoor IDFC Alt. 3 4 4 36 40 22.5 50 36.4
Pravin Singh
Shared
Services
3 4 3 33 30 40 25 32.5
Business Group
Performance
Individual Balanced Scorecard Cross Selling Leadership
Cultural
Allignment
Overall
Gross
Disbursement
Net
Disbursement
Spread
Reset
Spread
Fees
Incremental
GNPA
Overall
Fees
Confr
&
Road
Shows
Client
Relations
Team
Work
Overall
Overall
Overall
Weightage 15% 15% 30% 15% 10% 20% 10% 45% 65% 10% 15% 10% 20% 10% 10%
Score 3 3 2 3 2 3 4 2.7 2 4 3 4 2.6 4 3
Overall Rating 2.88
• Rating: Based on the subjectivity of manager’s comments in appraisal report and respective
weightages, we have decided to rate Mr. Varun to 3
• Mr. Mathur has scored higher in partnership score and hence , he will be able to still become
a partner and there would not be a scenario where Mr. Mathur become disengaged.

10. 10
 Weightage of cross-selling can be reduced or it should only be linked to
incentives and not be considered for career progression evaluation
 Revenue & Non-Revenue segments can be evaluated on different
metrics; even if the metrics are same, weightages can be different
 External factors – overall market condition , sector condition ,etc. also
to be given weightage ( You cannot pass on the blame on individuals
when the sector health itself isn’t great !)
Our Recommendations

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