BUILDING A

HIGH
PERFORMANC
E CULTURE AT
1.
2.
IDFC
Amit Prakash Singh (CGT21002)
Dipanjan Sengupta (CGT21005)
3. Indranil Ghosh (CGT21006)
4. Mohd Zinhar Uddin (CGT21010)
5. Bhargav Sri Dhavala (CGT21027)
AGENDA
Issues in Existing Performance Evaluation
01 Process

02 Existing PMS system

IDFC
PMS
03 New PMS features

04 Curious Case of Mr. Varun Mathur

05 Recommendations

2
Issues in Existing Performance Evaluation Process

 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

3
Employees and their supervisors and organizations build social
exchange relationships

Comparison of output and SOCIAL

input ratio of fellow EXCHANGE
colleagues THEORY

EQUITY
Personal interest dominate ISSUE
over organization’s
objective AGENCY THEORY- All managers
are agents and must act on behalf
of organisation

SELF-
INTEREST
Existing PMS

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

5
NEW PMS FEATURES

Ratings were given to the company, Individual performance below the level of
groups as well as individuals through middle management : Balanced Score Card
distribution curves (BSC)
. – Financial performance, customer
engagement, internal & external standards ,
BALANCE employee engagement
SCORE
CARD

DISTRIBUTION MULTIPLE
CURVE METRICS
WITH BSC

Fixed pay was benchmarked to the market Middle management & above : Multiple
median. Variable pay was in line with the FIXED AND metrics with BSC (45-70%) as just one
market median pay, business unit performance, VARIABLE component , Leadership (10-15%) , Cross-
contribution to overall IDFC performance as PAY selling (0-20%) , Cultural alignment (0-
well as individual employee performance.
10%) , Business group performance
(15%) , 270 degree feedback (10%)
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

7
Performance Factor

External Factors • Recent policy changes such as land acquisition and environmental
regulations have impacted IDFC’s infrastructure business. Domestic
affecting fuel shortages and rising coal prices have led to poor financial health
of existing power companies and postponement of new power
performance: projects

Individual • It is evident from the manager’s remarks that Varun didn’t put
Factors affecting considerable efforts in area like cross-selling, leveraging client
relationships etc. He also scored only a 3 rating in cultural alignment
performance:

8
Business Group Individual Balanced Scorecard Cross Selling Leadership Cultural
Performance Allignment

Confr & Road Shows

Gross Disbursement

Incremental GNPA
Net Disbursement

Client Relations
Reset Spread

Team Work
Overall
Overall

Overall

Overall

Overall
Spread

Fees

Fees
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 (12- 3-year Culture 270-degree
Candidates Business Rating (10- Rating (11-12) 13) performance Leadership Score feedback Partnership
Group 11) rating (50%) (15%) (10%) 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 3 4 3 33 30 40 25 32.5

Services

• 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.
Our Recommendations

 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 !)

10
THANK
YOU!!
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