During my work as an HR professional for over 17 years, I have experienced my apprehensions against performance management systems (PMS). There are questions that are frequently asked by companies, that are rooted in conventional practices. Most of the time, these practices shift the focus from people and performance to only business and bias. I firmly believe that leading by example is the best way to go. So here I am discussing some frequently asked questions with a few real-world incidents that I have tackled. These can offer some understanding of the importance of PMS.
Humans are inherently subjective beings. This means that employees might be prone to playing favorites, when it comes to the workplace as well. One company I was consulting to, had a similar problem. Despite having an established performance management system, the leadership team was at a loss to understand why they were not achieving desired results from their teams. They indicated that, from a few teams, the performance of some promoted employees was not satisfactory after they had been promoted. These promotions and appraisals were done on the behest of managers who had provided glowing reviews for these candidates.
After an in-depth analysis and discreet conversations with several employees, it was revealed that this was a case of favoritism. Some managers were providing exaggerated ratings for the favourite employees in their teams for various reasons. Either it was for friendship, to manipulate teams and gain more control or even in some cases for personal gains. This was taken very seriously by the leadership and necessary corrective action was taken.
The consequences of this “fixing” was that certain work environments were being viewed as unjust. This resulted in lower job satisfaction for team members and there was a gradual increase in attrition which was costing the company valuable resources.
The situation was thoroughly evaluated and concerned managers were warned against such behavior in the future. It was also necessary to review the PMS to reduce the chances of bias. Sometimes PMS has a high degree of reliability on managers. This was handled by adding a final leadership review for all teams. A peer review was also added for cases where a bias might be suspected. Trainings were conducted to foster professionalism and enable managers to make a conscious effort to have an equitable work environment.
Conventionally, performance reviews are conducted once every 6 months or annually. In one situation while evaluating the performance management systems of a company, I received a peculiar input. The leadership teams had started their PMS with great hopes of bringing about an improvement in employee productivity. However, they were facing issues with slow or negligible improvement in employee performance, especially when it came to softer skills. These were important for overall progress of the organization, coordination and customer experience.
We identified that, though the PMS was in place and performance reviews were being conducted bi-annually, there was no employee touchpoint in between reviews. This meant that there was no system for having a one-on-one session with individual team members. The time between feedbacks was very long and the system had no scope for an employee to understand their shortcomings in real-time.
A monthly one-on-one was incorporated into the PMS system. This not only allowed managers to suggest improvements for team members, but it also served as a basis for the final bi-annual review. The performance management system became more efficient as the managers knew the competencies and weaknesses of their team members closely. A five-point system was introduced that enabled managers to track the month-on-month improvement was also tracked and referred to regularly.
I have heard this argument multiple times where managers are apprehensive about giving an appraisal to an employee who has been on sabbatical. This is especially true in the case of situations like maternity leave, where the employee is on leave for a few months. Placing these employees on the bell curve for performance can be an inaccurate way to judge their contribution. In one scenario, the debate was whether to stop the appraisal of an employee who had been on childcare leave.
For employees who have taken a legitimate sabbatical, it is essential for companies to conduct a fair assessment that takes into consideration special circumstances. Many organizations have realized the need for guidelines to be set in such cases where the performance of the person is given priority over the individual. This means that the contributions of the employee for their designated time at the workplace are valued and not judged against the authorized leaves that they have taken.
In companies where these fair performance review practices have been implemented, I have seen a positive impact in overall employee satisfaction. These approaches increase participation of women in the workforce along with making the company a more conducive work environment.
The aim of PMS mechanism is to align all employees to the overall objective of the organization. The task becomes easier when the 4Cs are incorporated as a part of the PMS. These are Collaboration, Connect, Clarity and Character.
Figure 1 – 4Cs of Performance Management System
Companies need to have a flexible and open approach to performance management while viewing it as an integral part of the company’s operations. There can be many questions related to this new approach, but the benefits far outweigh the apprehensions.
The Performance Management season is upon us and I thought it would be a good time to share some insights into the challenges of performance management systems. A performance management system (PMS) is a process to monitor and align the objectives of the organization with the individual skills, competencies and deliverables of employees. The focus is on the delivery of promised results and improvement through learning and development. The primary purpose of PMS is to create a work environment that encourages productivity, efficiency and quality. Performance management is necessary so that individuals can perform to the best of their abilities, grow individually and also contribute to the growth of the company.
Like any other process in the organization, PMS comes with its own set of challenges. It is especially critical for the growth of a business because performance management is designed to suggest improvements in the contributions of employees. This not only helps in growth at an individual level but also organizational level by alignment with broader goals and objectives. This blog looks at some of the key challenges of Performance Management Systems and their solutions.
Many companies, especially start-ups or small and medium enterprises, might think that PMS is not required for them. It may not be a priority over day-to-day operations. The difficulty arises when the growth journey of these organizations is hampered by a lack of performance management or inefficient systems of monitoring employee performance. An evolving organization must have an established performance management system. Incorporating the best practices from the very start, even if it is for a handful of employees, pays off in the long run. This contributes to the overall success of the company and the growth of employees.
Many a time there was a huge gap between documented processes and the implementation of performance management. This lack of consistency across the organization, usually, comes from ineffective and erroneous systems. Different departments and even individuals have varied ideas about aspects like level of performance, traits, behaviour etc. As a result, the performance management activity does not reflect progress accurately and may impact decision-making.
To overcome this challenge, there is a need to set clear standards and processes for PMS through strategic performance management. An HR Management expert can be useful in setting PMS and training employees and managers about rating systems, to create a uniform understanding throughout the organization.
In smaller companies, one person likely plays multiple roles. There may also be some overlap between different employees with regards to responsibilities. This can lead to a lack of clarity and can negatively impact growth and productivity. While it is easier for smaller organizations to pivot in case of exceptional circumstances, this adaptability can also lead to a lack of alignment between organizational and individual objectives.
The need is to clearly define objectives, roles and responsibilities for all team members so that everyone is aligned with the organizational goal. Objectives should be visible and clearly communicated, even over-communicated if need be. OKRs and KPIs are useful frameworks for measuring and monitoring progress.
Sometimes employees feel that the PMS is inherently biased. They also do not believe in company values or the larger purpose of the organization. Companies that can establish value and purpose in the minds of their employees are often the ones who succeed. Belief in these aspects of the organization not only influences the culture of the company but also helps in the retention of talent and productivity.
Companies need to recognize that the culture flows from the top down. A lot of hard work is needed to establish a sense of pride and belief in the core values of the company. These need to be integrated into the performance management system through the right feedback and recognition practices. Clear communication and incorporation of company values throughout various processes, including PMS, can help in shaping the organization from the very early stages.
A feedback culture is vital to the improvement and growth of an organization and an individual. Many companies provide feedback only at the time of performance review, which may be only once a year. This is too long a time to hold feedback in a world where improvements should be done as soon as possible to minimize the impact of unwanted practices and behaviour. Without a proper feedback mechanism, managers may not be able to provide constructive feedback or maybe apprehensive to make ant comments.
The need is to establish an environment where feedback is openly given, accepted and acted upon. To ensure that feedback serves as a motivator, managers need to be trained to handle these comments through the proper channel and in an effective manner. Inappropriate feedback can be as harmful as the lack of it. Means of documenting feedback should also be put in place, which will become a key part of the PMS to track the progress of an employee
Do we really need a performance management system? Should we conduct performance review for only a select few or all employees? Who should get an appraisal?
There are many questions that may arise in the minds of leadership and managers, especially when they are new to the performance management system. Personal bias and rigidity in thinking can many times hamper smooth and fair performance review. If not dealt with at an early stage, this mentality can creep in even as the organization grows. This will negatively impact employee satisfaction as well as the growth of the company.
There are many nuances in creating a robust performance management system. It is an activity that impacts the entire organization and employees of all levels. Companies need to have a flexible approach and impartial view about an employee’s performance. Keeping conventional ideas aside, organizations need to adapt to the changing needs and situations of the market as well as the workplace and individuals. The focus should be to recognize the performance and outcomes, rather than any other aspects. A well thought of PMS contributes towards achieving this goal.