If there is ONE talk-show that is very scary and beat the shit out of everyone, right from the CEO of an organization to fresh-graduate Trainee is – Performance Management Talks. Why people are so scared to discuss their performance? There can be many reasons and few of them are –
Format – Performance is considered as an event which is organized once in a year or at the best once in every SIX months. However, the fact remains that Performance Management is a continuous process.
Poor alignment of performance scores and merit increase – No matter how much an individual score in his performance assessment, it is his reporting manager who decides his merit increase percentage and usually there is no correlation between the two. Hence, employees don’t believe in the process.
Incompetent and untrained Assessors/Managers – Many managers do not consider performance management as one of the key components of their role. They believe it to be a job of HR. Probably they don’t want to spoil their relationship with their team members. Managers are usually biased in their approach towards assessment of team members. They want to keep everyone happy.
Poorly defined KRA’s and KPI’s (What needs to be measured and how it will be measured) – In many organizations, performance goals don’t seem to have any relation to organizational goals. They work in silos. They don’t have defined success criteria’s of their goal. There is no clarity about what need to be done and when the task will be labeled as “successfully completed”.
Poor communication between assessor and assessee – Communication regarding the change in goal or change in success criteria rarely gets communicated to employees. They are up for a surprise when they are told about these changes in the final review meeting. This leads to irritation and frustration and as a result, leads to unhappy, disengaged employees.
What gets measured gets managed. And what gets managed gets improved upon. What organizations should do to overcome these challenges and fears of employees and can do to create a culture of performance?
1) The Role of a manager is to manage – It is one thing to roll-up your sleeves and get to work and it is another thing to do what you are hired for. A team member is promoted to the position of Team Manager to guide the team, manage the team and show the direction. If he will continue to contribute as a team member then he is not doing his work properly. As a team manager, it is his responsibility to manage his resources, communications, customers, performances of the team and deliver within specified timeline. Performance Management and Performance Coaching must be one of the key competencies for an individual to be hired to or promoted to the level of manager. “Don’t promote your subject-matter expert as Manager. An efficient and effective manager need not be subject-matter expert”. “Performance Management or Resource Management is not my work” is an excuse.
2) Aligning KRA’s and KPI’s of an individual with organizational goals – Every organization carve annual goals and growth targets for itself. Every employee in an organization must contribute towards those goals and targets. Every goal has defined success criteria; hence, every goal or target is measurable. Every employee in an organization contributes towards the goals of his department or team, which in turn inches organization closer to its goals. For an individual to win his team must win and his organization must achieve its targets. Its collective win and collective failure. Someone said, “But I did my job properly”. Unfortunately, your contribution was not sufficient or good enough for the organization to achieve its goals. One question an employee must always ask himself, “how better I can contribute” or “what else I can do”.
3) Aligning Performance Assessment scores with Merit Increase Percentage – “I have scored 85/100 in my annual performance assessment. Another team member scored 75/100. I am awarded 10% increase over my existing salary and he has been awarded 18% increase over his existing salary, how”? Usually, managers don’t answer these types of questions or they put the blame on the management team of organization and thereby creating an impression, “if you want to give increments as per your whims and fancies then why you did this drama of appraisals, you could have given us increment without assessing us”. There has to be a direct and clear correlation between assessment scores and merit increase percentage. This correlation can be drawn at grade level or functional level based on the business model of organization and its compensation philosophy.
4) Performance Management is a process (creating a culture of performance coaching) – Performance management is not once a year activity. It is a continuous process. A manager shall have monthly performance review meeting with his team members to assess their progress and communicate any deviation in goals. A manager must create performance review tracker. In such circumstances, your annual review meeting becomes less tedious and less scary because before even entering for the final assessment, both assessor and assessee know what to expect from the meeting.
Secondly, there is another advantage of monthly performance reviews. If the concerned manager decides to separate from the organization at any time during the year, the new manager will not find himself out of place. Through performance tracker, he will be able to trace performance goals and progress of individuals in his team.
Thirdly, monthly performance reviews will let the manager know challenges faced by his team members in achieving their goals and hence he will be able to coach him and take corrective actions at an appropriate time.
Fourthly, organizations and managers set their annual goals at the beginning of a year. Many changes might occur during the due course of year forcing organization and employees to realign their goals. Monthly review meetings provide a platform for every type of correction and communication. Lastly, monthly performance assessments will eliminate any kind of bias from the process.
5) Lean Appraisals – THREE of the biggest drawbacks of annual performance appraisals are –
A) Managers can compare performance scores of their team members and hence will be biased towards their favorite team member, which creates unrest and frustration among employees.
B) When appraisals are done once in a year, there will be a huge increase in cash flow in one given month, as per the performance cycle of the organization.
C) During the year, many new employees join the organization and old employees resign, therefore, in annual appraisals, there will be few employees who will be assessed for SEVEN months and few will be assessed for FIFTEEN months. It might create unnecessary difficulty in allocating increment percentage to employees. Hence, there is a need to have lean appraisal system.
Lean appraisals mean doing an annual assessment of employees in their month of joining. A manager managing a team of 24 employees will be required to do TWO assessments in a month, instead of doing 24 in one particular month. It will not be difficult for the organization to arrange for a big chunk of cash-flow in one particular month. It will eliminate any type of bias from the system. There will not be a comparison of performance scores and increments among employees.
On the part of the management team of the organization, they need to allocate budget to each manager to manage his team. The budget shall be driven by market and industry and a manager will get it proportionate to the number of members of his team at the beginning of financial year. This fund shall be called as Performance Management Budget for the year ****. Thereafter, it shall be the responsibility of a manager to manage his fund and report back to the management.
Let’s understand and accept this. Performance Management and Coaching is one of the integral responsibilities of a manager. They shall not push it on the management of human resource function. HR is to facilitate the process. Management is to allocate the budget. Employees working in the organization are not your personal friends. They have been hired to perform a specific role. They are paid for their performance. As a manager, you must help them improve their performance.
Readers might think that this type of performance management system is not feasible and not practical, however, the fact remains that such system is scalable and manageable. I have done this in my several consulting assignments.