How Neuroscience Can Help HR in Performance Management

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“MRI scanners and brain research are enabling to collect empirical data of what happens in a human brain and what leads to particular action or behavior.  At the same time, students of pseudo-science are banking on hypothesis around behavior and actions. They often quote a lot of anecdotal evidence to make their case.”

Organizations have a choice to make. While the pseudo-science approach is tempting, exciting and is relatively convenient to apply, it may not yield results in the long run.  In some cases, if it is wrongly applied pseudoscience can be very dangerous. 

Let’s take an example of traditional performance rating systems.  Most organizations are practicing it as it is believed to improve productivity and improve organizational and individual performance. It is believed to influence peoples’ morale positively.  Now, let’s look at the science behind the whole exercise. Studies by Kluger and DeNisi in 1996 revealed that rating employees and using that to either rank or yank employees has zero or negative impact on their motivation. 

How Does Neuroscience Help?

Neuroscience focuses on the brain and its impact on behavior and cognitive functions, or how people think.  Now it is increasingly believed that the study of psychology or any aspect of human behavior is incomplete without the study of the brain and its functions, neuroscience.  Psychology, since its inception, has been the most discussed branch of science as it is abstract.  Take the theory of a leading personality, they say that it is almost impossible to empirically prove his hypothesis.  Hence neuroscience gives us hope.

Performance Management

The organization’s performance is nothing but a sum of the performance of all its people. It’s objective:

  • To positively influence people’s morale
  • To provide feedback on the contribution made by people
  • To diagnose people’s strength and areas of improvement
  • To develop people
  • To reward people for work done well or reprimand for non-performance

Of different HR practices, performance management is perhaps the most difficult to get right.  If done well, it can have a significant positive impact on the organization. Getting it wrong can make the organizational culture toxic.

Traditional performance management is often driven through compliance lenses and places HR in the role of performance management police.  Also, this phenomenon is amplified by the fact that in a traditional performance management system, the goals are too specific and inflexible. Assessment of outdated goals impacts the employees’ sense of fairness.

Linking performance to compensation makes it impossible to remove the threat from the appraisals.  Also, in the conventional rating system, the employee’s contribution to an organization in the whole year is reduced to a single number that he/she perceives as being unfair trivializes the whole effort and gives little encouragement in the subsequent years to give his/her best. 

Finally, organizations must fight hard to deal with managers’ biases in awarding ratings, leaving the employee experience in a bad light. 

People and Leadership Practice

Siemens Healthineers recently did away with the performance rating system and introduced ‘People and Leadership Practices’ (PLP) that draws lessons from neuroscience.

  • Mutual Expectations: An employee owns up the goals when it is mutually agreed upon.  In PLP the expectations are set by people and the manager through an eye-level discussion.  People express their concerns and demand support from the manager. In this way, people feel more responsible for the effort and outcome.
  • Feedback: Feedback is believed to be the most effective way to influence positive change.  In PLP, managers, and people are expected to give each other feedback on behavior and performance.  From neuroscience, perspective feedback is best received when people are using their rational brain (prefrontal cortex) rather than the brain that triggers emotions (limbic systems). Not mixing the feedback with performance discussion is a way to facilitate objective discussions on behaviors and performance.
  • Recognition and Reward: Recognition is emotional, and rewards are economical. People may tend to forget the reward, but they remember recognition.  Rewards are mostly consumed whereas recognition is mostly experienced.  In the world of PLP, people are encouraged to recognize each other to reinforce the right actions and behaviors.  This helps in creating the right neural pathways with regard to performance. 
  • Development Dialogue: The Development Dialogue addresses an individual’s short- and long-term personal development. People-centric conversations promote synergy and increase engagement.
  • Self-nominations: people are encouraged to take ownership of their career development and voice their interest in positions and development programs.
  • Development Rounds: Development Rounds can be characterized as forward-looking and future-oriented discussions with a clear focus on an organization’s business aspiration and people’s potential.  As you can see, with a little bit of research and with an open mind to lean towards science, an organization can greatly benefit from the lessons of neuroscience. 
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Raghu Chandrashekar is Senior Vice President and Head HR, Siemens Healthineers, India. He has worked extensively on building HR organisation, People & Leadership Development, Change Management, M&A, Employee Engagement, Compensation and Organisation effectiveness. Raghu brings more than 2 decades of rich experience in crafting and implementing a winning organisation. Prior to his current role, he was heading Leadership & Development function for Siemens India. Driving culture change and bringing organisation vision and values into day to day life is his core strength. HR was recognized as the best enabling function (2019) in his organisation.


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