Relative or Absolute Rating – Which one is for you?
The test of an organization is not genius. It is its capacity to make common people achieve uncommon performance. - Peter Drucker
The jury is still out as leaders are experimenting with new initiatives in performance management. With the new push for absolute rating, everything in relative rating approach suddenly seems negative. However as the dust is settling down, the relevance of relative rating in performance management system is not looking so obsolete. So which system suits better to your organization in the light of the developments in the recent past? The same conundrum was discussed by the who’s who in the HR in the Pre-Conference session of the TechHR 2016.
The challenges with relative rating are not new to anyone. Bell curve has not just been blamed for increasing the subjectivity in evaluation but also for silently killing teamwork. This gave way to absolute rating in many organizations.
While absolute rating is perceived to be fairer by employees, it needs to be accompanied by a strong goal setting system and real-time feedback which is based on facts and not biases. The challenge really comes in meeting these pre-requisites. The biggest challenge which managers are facing is in fighting the innate tendency of human beings to compare an apple with an apple. The fundamentals of success are based on how much interest both managers and employees are showing in frequent feedback. The experience of many panel members speaks otherwise.
Once again effective solution lies in sound implementation. Building manager’s capability to coach their employees and provide constructive feedback has become an absolute essential. In the war of relative and absolute rating, there appears to be no clear winner. Infact what is increasingly being realized is that there is no one right answer. Even the same organization can have different performance management systems. Any business unit with highly qualified premium talent could go for an absolute rating while another business unit which is more volume and efficiency-focused could go with a relative rating. The success really lies in identifying what suits the best in a given situation and proactively addressing the challenges which come by choosing any one of them.
As a wise man has said, “Ideas are easy. It's the execution of ideas that really separates the sheep from the goats.”