LTIMindtree, one of India’s leading IT services companies, has introduced a new appraisal system that ties the annual pay hikes of middle and senior-level managers to the successful completion of competency tests.
The decision has sparked discussions across the IT industry, with opinions divided on its implications for employee performance and morale.
LTIMindtree’s decision comes at a time when the company is sharpening its organizational strategy to secure large deals.
The company is also focusing on capitalizing on the generative AI wave.
With an annual revenue of $4.3 billion, the company recently appointed Venugopal Lambu as the CEO designate.
He has outlined a 90-day plan to deepen client relationships and transform the organization into an AI-first company.
LTIMindtree Competency Tests: A New Benchmark
The competency tests are designed to evaluate the technical skills and knowledge of managers, project leads, and lead architects.
These assessments focus on areas such as coding, mathematics, and other technical skills required for various projects.
The appraisal process now equally weighs project performance and the results of competency exams. Each component carries 50% weightage.
An LTIMindtree spokesperson explained, “Our performance management process integrates competency-linked goals alongside project-specific goals.”
They added,”We believe both are equally important in assessing the overall annual performance of our talent, and as a result, they carry equal weightage.”
The new appraisal system applies to employees in the P3, P4, and P5 bands.
These bands include managers, team leads, and lead architects with more than four years of experience at the company.
The competency tests are part of LTIMindtree’s “My Career My Growth” (MCMG) framework.
This framework serves as a comprehensive guide for employees to analyze and identify growth opportunities within the organization.
The framework sets clear milestones and offers diverse learning avenues, empowering employees to take ownership of their career progression.
Rationale Behind the Move
LTIMindtree’s decision to link pay hikes to competency tests aims to keep its workforce updated with the latest technologies.
It also focuses on maintaining high standards of performance.
The rapid advancements in AI and other emerging technologies require employees to continuously upskill.
This helps them meet client demands and remain competitive in the market.
“This initiative ensures that senior management continues to be abreast with the latest technologies given the pace of change in the AI landscape,” said an employee.
The tests are seen as a way to foster skill enhancement and objective evaluation, aligning employee capabilities with organizational goals.
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