For foreign companies, human resources in India is often difficult. How do you build a transparent company structure? Especially such in which employees dare to be open, but can also be held accountable for the results achieved? Below we provide insight into employee performance management in India.

India employee performance management review

On average, twice a year in the Netherlands we have an official meeting with our manager. It focuses on our performance, in an assessment interview and a performance review. However, in most Indian companies this only happens once a year. The Indian Annual Performance Appraisal is best compared to what we call the appraisal interview. The employee’s performance is tested against the set and achieved business goals. If the assessment is positive, it can be rewarded with a salary increase. But, there is more than just a salary increase.


With good employee performance management, the organizational goals are clearly shared with the employees. In fact, everyone can define personal goals that contribute to the end result of the organization. This creates a sense of commitment to the company. Besides, the expectations for the employee are clear and there is plenty of room for personal development. Since the employees decide for themselves how they want to achieve the goals, it creates trust in the knowledge and skills of the employee and boosts motivation.

Working in the Indian culture

But, before you apply the above to your company in India, it is important to understand the Indian office culture. As our blog on understanding Indian business etiquette explained earlier, there are some differences with our western way of doing things. In India, for example, hierarchy is very important in the workplace. The hierarchy determines who makes important decisions and which tasks can and cannot be performed in certain positions. Therefore, Indian employees are accustomed to carrying out instructions from the boss and not making their own input or criticisms.

Additionally, maintaining good relationships with business contacts and employees is essential in India. Despite the hierarchy, this can also be seen on the shop floor. There is more room for conversations about private life. Moreover, it is not uncommon for the whole office to be invited to a birthday or wedding party. The interweaving of work and private life is also visible in the long hours that Indians are willing to make. It is not uncommon to sit in the office late into the night to meet a deadline. In fact, this has partly also to do with time management. Being in the office on time in the morning is almost impossible with the traffic in the big cities. However, that is compensated without mugs with extra hours in the evening.

Employee performance management in India

When thinking of employee performance management as an international company in India, it is important to take these cultural differences into account. Because of the hierarchical system, many Indians have fixed expectations. For example, expectations in a managerial position, in terms of salary, responsibilities and especially about what can be delegated. It is therefore very important that the company’s tasks and expectations are defined and presented as clearly as possible. In addition, it is smart to conduct a performance review more often than once or twice a year. For example, opt for a long conversation and three shorter evaluation moments. This way you can check more often whether the way of working you are aiming for is being taken up.


And if you want to express criticism during the performance review, then think carefully about how you bring this about. Always ensure that the conversation is conducted in privacy, so the employee can’t feel embarrassed in front of others. Talk about lighter, personal things before you start the performance review. For example, ask about the employee’s family. Pay close attention to your own body language during the conversation. Besides, avoid closed positions such as arms over each other or hands in the side. Moreover, share your criticism in a constructive way.

Again, it is important that criticism is explained as clearly as possible. This is critical because the employee should not see this as a personal attack. Instead, he immediately knows how he or she can approach this differently in the future. Finally, where possible, be lenient with arriving late and exceeding deadlines. As KPN manager Jasper Fortuyn said to our partner organisation in an earlier article, “This is one of the aspects of Indian culture that you have to embrace because there is simply nothing you can do about it.”