Performance management: Getting to what matters
When setting up goals, many organizations make the mistake of specifying ‘what will you achieve’ without outlining ‘how will you achieve it’
From scientific management to the balanced scorecard, performance management systems have evolved considerably over a period of time. Given the various constraints that corporations operate within and to avoid litigation, ratings emerged to be an objective, document-able means of appraisals.
The bell curve came forward as a preferred model for ratings. The concept became an end in itself, an HR must-have and an answer to manage the complexity of performance management using a quantifiable approach. Unfortunately over time, organizations started force fitting their employees on the curve, when in fact the shape should be a natural outcome of performance evaluation. The appeal of such ratings also came with the promise of an HR process interface, where organizations could identify training needs, conduct succession planning and manage compensation. But in the exciting promise they held, the intention with which they became popular was altogether lost and people were left with a disingenuous number they struggled to find meaning in.
There also came a realization that ratings can be demoralizing and de-motivating for an individual’s psyche and may adversely impact group dynamics. A rating number largely elicits a knee-jerk, flight or fight response making the conversation a negotiation, largely because it is but human to defend a rating. This may have a basis in evolutionary sociology and neurology, emanating out of one’s need to self-protect. Secondly, while ratings may be thought to be objective, they are in fact an arbitrary result of biases such as the halo effect, recency and leniency or comparison of goals with a relative rather than a standard.
Getting back to the basics
In the quest for an ideal system, organizations have forgotten the very spirit of performance management and the purpose it is meant to serve—individual and organizational growth. Any system will fulfill its purpose if it possesses two components: Effective goal setting and feedback.
“What one person expects of another can come to serve as a self-fulfilling prophecy” – Robert Rosenthal, psychologist
At the macro level, does the goal setting exercise take into consideration organizational objectives, team aspirations and business environment? At the micro level, does the goal reflect an individual’s interests, ambition, role criticality and stretch potential? Many organizations make the mistake of specifying ‘what will you achieve’ without outlining ‘how will you achieve it’. Innovation in itself cannot classify as a goal; firms must break an ideal into several actionable items. Another fallacy comes out of goal dissonance. A goal of quality-orientation will have no meaning if legacy systems unconsciously reward the opposite. Most importantly, companies must involve employees in the goal setting process so that they perceive fairness and ownership.
Feedback: Communicate and converse
“If you aren’t in over your head, how do you know how tall you are?” – T.S. Eliot, essayist and playwright
Feedback is perhaps one of the most underrated management interventions. Psychologists, for example, speak of using solution-focused conversations to uncover positive future action points and disentangle conflict. Companies have now begun applying more qualitative approaches, for instance, meaningful goal-oriented dialogue and project-based feedback. This has emanated out of the view that performance management must be a part of an employee’s career journey, tied to their own developmental wish list, an ongoing process rather than a check in the box that defends compensation and promotion. Far too often, real performance issues are glossed over because of fear of confrontation and an appraisal discussion becomes a mere formality devoid of any depth. With its troubled history, any new concept in performance management may take some time to dilute the vein of skepticism. But, changing the way we look at the existing process can no longer be dismissed.