New Rules of Measuring and Evolving Employee Performance

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Performance Management in the very heart of Human Resource function, which funnels all the HR processes of talent management. The process over time had changed focus from performance evaluation to rewards to learning needs to performance development. The business realities of today’s global economy are ruthless and unforgiving which seldom give the second chance to come back. People being the key differentiator impacting business results have made it critical how talent is viewed, nurtured and groomed for competitive performance.

In the journey of being a performance-driven organization, it becomes imperative for organizations to identify performers at three levels. A. Exceed Expectations B. Meet Expectation C. Struggle to meet the expectation. The process must further validate its performance and potential findings through a development centre. This people capability facilitates HR to work on people development, rotation plan, succession plan, and other HR strategic interventions. 

Some of the challenges, organization grapple in pursuit of excellence in performance management is elaborated here: –

  • Performance management in any organization is not about its process, transparency, and data evidence but to my mind honesty of performance appraisals. Human Resource function can at best introduce the finest possible Performance Management System and process to reduce subjectivity but the trick lies in coaching superiors on how to be objective to bring an ingenuous conclusion. It’s easier said than done.
  • HR instead of keeping performance at three levels, has gone overboard and created many performance levels varying in the organization, which has complicated the issue. To top it up further introduce bell curve which is not mapped to organization capability and performance matrix instead try to force-fit people as per bell curve numbers. This defeats the very purpose of objective performance evaluation.
  • Performance appraisal is generally seen from the lens of performance evaluation for rewards rather than a performance development tool. It’s because of this approach we have found superiors not comfortable in engaging in performance dialogue. They have a tendency to do it hurriedly or avoid, as they are not comfortable giving performance feedback on areas of weakness. They are also aware that they have to get work done post the performance dialogues so they avoid getting into areas of conflict. Human Resource must groom superior on engaging effectively in performance dialogue for the development of talent, it’s not about performance rating. 
  • Target setting exercise is very critical to ensure that performance management is aligned to business outcomes. In the target setting exercise Key Result Area has a strong linkage to Key Performance Indicators of the function and business. The KRA has to be quantified and measurable to evaluate the impact on company performance. We witness KRA with lead indicators aligned to business goals have targets gaps and accountability challenges. Organizations struggle on service and support functions for quantified target settings thought one can have many measurable targets for them as well.
  • One of the significant purposes of performance management is to convert rewards to have highly motivated and engaged employees striving to realize organizational goals. In reality, what we observe is that quite a large number of employees are demotivated and getting disengaged. If we conduct employee satisfaction level on the day of roll out of annual performance letters it will invariably be the lowest whereas the organization does it to achieve a higher level of performance and commitment to the organization agenda. HR has to work out performance rewards in such a manner that it motivates a large number of employees for superior performance. A healthy way is to look at Company performance, team performance and individual performance with right weightage befitting the function to have an acceptable performance reward.

Good news is with the changing time, when the business realities are changing fast and CEO’s are demanding instant data for decision making on people issues, the technology is enabling to have measurable performance data online. Also, there is a huge thrust on performance evaluation objectivity and befitting reward during the year. This has necessitated some new ways to look at performance evaluations. Sharing some of the new trends here.

“Now the performance evaluation has become a continuous process throughout the year with moving targets. Companies are moving towards quarterly performance review along with a quarterly bonus payout. A year has become too long wait, to respond with ever-changing requirements during the year. Agility is the key to effective performance evaluation.”

To bring objectivity organizations are constituting a talent review committee with all stakeholders, where the superior present the performance of the reportee officers and the customers deptt shares their experience to arrive at an objective performance rating. In the process, the superior is not the sole person deciding the performance and career of an officer it has become a collective collaborative approach.

With technology, performance coaching, and feedback have become an online process, which binds superior and reportee for continuous performance dialogue. It has helped the organization accelerate people capability development agenda on the fast track.

To conclude, organizations have one biggest challenge dealing with ambiguity in a fast-changing business dynamic, which keeps the CEO awake at night on a question “IS THE COMPANY FUTURE READY”. The answer to this question comes from the way the organization is continuously evaluating and modifying its Performance evaluation and talent development, which aligns with market dynamics and adds value to the business. HR professionals have to be a business manager who brings in people process conveyers to make a measurable impact on organization performance. HR role changing from business partner to Business integrator.

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