Ensure Fairness, a rating is not the issue

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Fairness (fɛːnəs): “Treating people equally” or “impartial and just treatment or behaviour without favouritism or discrimination”

Over the last few years, we have seen many polarizing arguments where people have vociferously debated the relevance of Performance Appraisals, more so around the performance ratings that follow this exercise. While at the core it seems like a legitimate debate, one area where little debate is that unbiased feedback improves performance. Regardless of which camp someone is in, there is dissatisfaction. An employee feels that the process is biased or disconnected from the work that they do and Managers feel that it’s a chore, checkbox exercise that creates more collateral damage instead of improving performance.

So how does one drive fairness? I believe there are a number of important drivers of fairness in Performance Management.

Systemic Fairness

The phrase “process drives structure, which drives transformation” is very true in this case. We can significantly remove bias by driving a well-structured performance process that does the following: a) clearly defined process schedule where both employees and managers understand what’s expected out of them. b) KPI &objectives that are known and have a clear connection to the larger organizational goal. c) Create flexibility for employees to weigh in on the objectives so that there is greater personal accountability. d) Feedback on performance is not limited to just the manager’s view, it’s from a broader stakeholder group.  

Manager Capability

“Employees don’t leave companies they leave managers” The role of the manager has progressively evolved over the years and leadership expectations from them are at the highest that they have ever been. With younger managers and more diverse teams, the need for managers to have the right skills to have a meaningful conversation is now critical. A recent study pointed out that only one-third of the managers felt that they had the skills for an effective performance conversation. Three C’s for managers are: Continuous dialogues, creating Context, Coaching for performance.

Pay Transparency

“Keeper’s Test, How much would you pay to keep your best performer?” Pay is less about the quantum and more about the message! Unfortunately, many organizations miss the trick and get lost in the averages (the bell curve). A clear rewards philosophy and pay policy go a long way to drive what matters to the organization, like teamwork, collaboration, etc. This also drives consistency, transparency and a belief that the organization is fair. Two ways to address this is to make sure the fixed salary aligns with the size of the job and bonus significantly differentiates superlative performance.

Culture of Development

“We know what we are, but know not what we may be -Shakespeare” While the appraisal discussions focus a lot on what has been achieved, they more often don’t spend enough time on what can be achieved. Research points out that for an employee there is a greater sense of fairness when there is a temporal comparison of performance rather than social i.e. employees are a lot more receptive to a strong performance view when it’s compared to their performance over a period of time rather than in comparison with others.

And lastly, as organizations strive to drive both a high performing culture as well as a fair environment, there are several new technology platforms that aid in supporting the employee and organization to drive radical transparency which should definitely be considered.

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