Performance Management

and
Reward System
of
Cognizant Technology Solution

Submitted to:
Dr. Rachana Chattopadhyay
Associate Professor
International Management Institute Kolkata

Submitted by: Arpita Basu

Enrollment no. 17PGDM085

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Table of Contents
Executive Summary ..................................................................................................................................................... 1
Introduction ................................................................................................................................................................. 2
Objective……………………………………………………………………………………………………………………………………………………………….3

Performance Management………………………………………………………………………………………………………………………………..6-8

Reward Management System……………………………………………………………………………………………………………………………….9

Conclusion…………………………………………………………………………………………………………………………………………………………...10

References……………………………………………………………………………………………………………………………………………………………11

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EXECUTIVE SUMMARY
“Forward-thinking businesses can't just do digital. They
must be digital at their very core.”
— Francisco D’Souza, Chief Executive Officer

Cognizant is a multinational corporation from

America that provides IT services, including digital,
technology, consulting, and operations services. The
headquarter is in New Jersey, United States. It is
also a part of the Fortune 500 companies.
Cognizant is a leading professional services provider
companies, transforming clients' business, operating
and technology models for the digital era. It’s
unique industry-based, consultative approach helps
clients envision, build and run more innovative and
efficient businesses, the most admired companies in
the world.

The performance management and Reward system

(PMRS) at Cognizant links directly to rewards,
recognition, and career development of an
employee. The PMRS at Cognizant follows the basic steps of PMRS from planning to coaching and
feedback. Currently Quarterly bases performance evaluation has been going on, which has high
motivational level, and high quality. There should be a system of consultation between employees and
management about employees’ career path, it is easier for management to understand and analyze the
need of the employees and accordingly allocate them reward. Cognizant is well aware of fact that higher
management love to have non monitory rewards
i.e. Achievement Feelings of accomplishment, Informal/formal recognition, Personal growth, Status,
while lower management are more likely to have monitory rewards like incentives, bonuses. Maslow’s
motivation theory can be best define social, self esteem and self actualization stage employees have
inquisitiveness to take intrinsic rewards while other ones physiological, safety needs employees are
more attracted by cash rewards of any kind. The KRA, KPI should be set for managing performance to
ensure more transparency in the system.

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 Organization Structure- Cognizant
Technology Solution
INTRODUCTION
Chief Executive Officer
The company has more than 261,400 employees globally,
out of which 150,000 are in India across 10 strategic
locations with a plurality in Chennai. The other centers of EVP
the CTS are in Bangalore, Coimbatore, Gurgaon, Noida,
Hyderabad, Kochi, Kolkata, Mangalore, Mumbai, and Pune.
SVP
There are several verticals and horizontal units in
cognizant. The vertical units include Banking & Financial
Services, Insurance, Healthcare, Manufacturing and Retail, VP
while the horizontals focus on specific technologies or
process areas such as Analytics, mobile computing, BPO
and Testing. Both horizontal and vertical units is having AVP
business consultants, who together form the organization-
wide Cognizant Consulting team. Cognizant is one of the
largest recruiters of MBAs in the industry; they are involved Senior Director
in business development and business analysis for IT
services projects.
Director

Associate Director

Senior Manager

Manager

Senior Associate

Associate

Programmer Analyst

Programmer Trainee

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OBJECTIVES

Data related to performance assessment of employees are recorded, stored and used for the below
mentioned purposes.
1. to effect on competencies and performance for promotions and hikes
2. To confirm the services of at the end of probationary period of the employees
3. To assess the need of training and development
4. To decide upon a increment or hike
5. To let the employees know where they stand in terms of their performance is concerned and
6. to assist them with constructive criticism and guidance for the purpose of their personal and
professional development
7. Finally, performance appraisal can be used to determine whether HR programmes such a selection,
training and development, and transfers have been effective or not, also the ROI of training program

Broadly, performance appraisal serves four objectives-

(i) Developmental
a. Identify individual needs
b. Performance assessment feedback
c. Determining transfers and job assignments of the employees
(ii) Administrative /decisions,
a. Salary
b. Promotion
c. Retention or termination of the employee
d. Recognition of employee performance
e. Lay-offs/ Termination
(iii) Organizational Strategy/objectives, and
a. HR planning
b. Determining organization training needs based on the organizational goals
c. Evaluation of organizational goal achievement in relation to the performance standards
d. Evaluation of effective HR systems
(iv) Documentation
a. Criteria for validation research
b. Documentation for HR decisions
c. Helping to meet legal requirements

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PERFORMANCE MANAGEMENT
Mission of the Company

Organizational Goals

Key Result Areas/ Key

Performance Indicators

Performance Objectives
According to my practical analysis, I came to know that Cognizant Technology Solution is using better
linkage of mission and vision to its organizations functions as well. As above diagram clearly explain how
CTS managed to get best appropriate results. As they have developed a system to involve employees of
CTS in decision making just to make them loyal and responsible to the company. First goals are
developed at higher level by the top management, then head of departments make their goals, and at
the end employees also formulate their individual goals. Supervisor, manager or respective authority
review the individual goals and make changes if required.

Some examples of KRAs for Manager in Cognizant:

 Project Delivery and budget forecasting:
• Define project goals and deliverables that support business goals in collaboration with top
management and stakeholders
• Develop comprehensive project plans that cover all project related areas such as scope, time,
risk, and quality management
• Develop and manage a project budget that is approved by the top management key
stakeholders and the clients
 Manage and control the budget of the project
 Communication and reporting:
 Provide project progress and forecast reports and communicate with the subordinates
 Effective and efficient resource allocation
 Estimate the resources and allocate properly, participants needed to achieve project goals

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 Lead and manage a high performance team
 Coach, mentor, counsel, motivate and supervise project team members and influence them
to take positive action and accountability for their assigned work
 Conduct regular team meetings to discuss issues, share knowledge, share achievements,
provide training and direction
 Identifies training and development needs of team members and provides the resources
needed to develop team members
Performance Management and Reward System in Cognizant is divided into two parts.
First part is Performance Evaluation that runs From January 1st till 31st December.
Performance Evaluation:
 If an employee is part appraisal cycle in the current year, which if that employee has joined on or
before 31st December. There used to be documents called YEA (Year End Appraisal) Document and
Goal Setting Document in past, now cognizant having a portal named “Go perform”.
 Cognizant do the performance evaluation quarterly
 MBO technique is being used because the supervisor and subordinates of a project jointly define
their common goals of the project and define each individual major area of responsibilities or
individual’s major areas of responsibilities or individual goals in terms of cost, quality, time,
productivity, and delivery.
 Departmental goals is developed by the Senior Manager and Director of the project, then that is
communicated with the employees and ask them to develop their individual goals and accordingly
short term performance targets or standards through which organizational goals can be achieved
and update the goals in the “Go Perform” portal, after that managers will login to the portal and will
review the targets and will make changes if required.
 At the end of each quarter employees will update their deliverables in the portal, also managers or
reporting authority will check, and validate the information provided by the employees through the
mails from the client i.e. appreciation mails from the client after a successful delivery.
 The employee’s goals and achievements will be evaluated quarterly. This helps the employees to
make sure that they are in the right track.
 First, employee will evaluate themselves on the basis of goals set and achieve by them quarterly.
Then document will be submitted for Supervisor evaluation quarterly.
 Supervisor will evaluate and put his comments and ratings quarterly, will give no. between 1-5 to
each deliverables and final grades will be based on average of the quarters. But this step is not this
simple.
 This evaluation includes factors like available buckets of rating, Managers consent, and Bell curve
 The managers, supervisors or the reporting authority will provide feedback to each employee based
on their final rating scores, and the process will not be over until the entire conversation between
the rater and ratee is over
 Rating Normalization
 In End of Nov or early Dec, final evaluation will take place which is nothing but the average
quarterly evaluation.

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 All this takes around month and half, and ratings would be announced by mid of Feb of the next
year.
All the employees are rated on below 4 scales,
Exceeds All (EA) - top rating. This is the top rating which can be given around 5-10 % employees.
Exceeds Most (EM) - Second Top (average rating, this is what most people get). This is second best
rating which gave to around 40-50 % employees.
Meets All (MA) - This is called “third rating”, I put this in quotes because it makes you like a third world
human being. This is third rating which gave to around 30-40 %employees.
Meets Some (MS) - This is a rare rating, and could be leading you to termination. This is the worst rating
which gave to 5-10 % employees. Number of EA and MS must be same for any project. In case of MS,
Cognizant can issue pink slip for employee.

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REWARD MANAGEMENT SYSTEM
Reward management is formulation and implementation of strategic goals and policies.
The reward management should be done fairly, equitably and consistently in accordance with the
employee value to the organization and to help the organizations to achieve their strategic goals. It
is aim to meet the needs of the organization as well as its stakeholders. Reward is nothing but all forms
of monitory and tangible services and benefits which employees receive as a return of their
employment. Cognizant’s rewarding system to employee is excellent as they are caring with excellent
rewarding parameters just to retain, motivate and influence employees towards organizational
goals. CTS are rewarding relating with employees performance in a way to increase productivity of the
company and effectiveness, also take holistic view of all the elements to reward
and recognize employees’ perfomance to ensure a complete, comprehensive package of pay, benefits
and learning and development programs. CTS is using different aspects of Maslow’s hierarchy of needs,
and two factor theory of HerzBerg, but more importantly they are not using all or one of them; they just
relating their main concepts of the therories with their reward system to define it properly.
Second part is Salary revision or Promotions or both. This happens in June-July, but effective from 1st
July in general.
On the basis of ratings, hikes and promotions are announced in the month of July. Both your yearly
increment and bonus will depend on the rating and every year the management decides how much
bonus to pay to each category based on the profit and revenues of the organization.
These rules are no mandate, but the below mentioned patterns has been seen-
An amount will be deducted from the CTC at the beginning of the year as variable pay, i.e. in case of the
designation Programmer Analyst Trainee Rs. 10000 will be deducted, Programmer Analyst it is Rs.
20000, for Associate designation it is Rs. 45000 and for the Senior Associate designation the amount is
Rs. 70000
• Those who are getting EA rating will get 130-140% of bonus ( 130%/140% of the above mentioned
variable Pay) and a salary increment of 8-10% on the fixed pay
• Those who are getting EM rating will get 110-120% of bonus and a salary hike of 6-8%
• Those who are getting MA rating will get 80-100% of bonus and a salary hike of 4-6%
• And MS rating holders will either get 50% of bonus or none and a salary hike of approx. 2%
• Promotions/Salary Hikes are generally effective from July for up to managers however in case of
Senior Manager to SVP designation it will be effective from October
• Suppose an employee is getting one EA and one EM, then almost it is sure that employee will get a
promotion in the second year.
• Both EAs will surely have higher chances, but again it has been seen people not getting promoted
with this ratings also.
• MA or MS will surely not make you eligible for promotion

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CONCLUSION AND RECOMMANDATION:

• Previously in YEA process, there was no such defined timeline and HR department had to send n
number of follow up email to Employees and Managers for completing the rating process but with
this quarterly check in concept timelines are now days strict and HR department ensures the rating
publish on time
• With this GoPerform platform everything is traceable and measurable in terms of deliverables. So
employee does not have to look back their sent emails in order to proof during their evaluation
period because Manager verifies the details and ensure data correctness
• Current system is intelligent enough to calculate their performance and suggest a recommended
rating for an employee. This helps management to take decision
• Current process ensures Manager and Employees are both agreed on this given Rating. Without it
rating process cannot be closed and employee can escalate to HR department for rating justification.
There are scenarios HR validates all the deliverables and data points. Hence final rating of employee
got changed as well
• With this process, Cognizant ensures employees are getting their rating based on the performance.
And any violation to this policy will be considered as disciplinary actions
• 360 degree feedback cannot be implemented here since it is a big organization and that will create
more difficulty and some of the employee will be reluctant to provide feedback to some other
employee from a different project
• Evaluation of team performance should be standardized

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REFERENCES:

• Company: Cognizant Technology Solutions

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