Today, some organisations swear by a performance rating mechanism, even though many companies no longer follow the earlier method of a bell curve influenced rating system. Several organisations rigorously follow processes like OKRs (objectives and key results) today.
So what’s changing in the world of performance management and what decisions do HR leaders need to take?
The need for the right performance management systems
Alok Kumar, Senior Director, Manpower, a subsidiary of ManpowerGroup, says the system should always be fair and transparent. “Performance reviews are critical and great tools to enhance performance. It gives a good opportunity to leaders to keep a periodic pulse check on deliverables, actionable elements and areas of improvements. Leaders need to make the performance review process more inclusive and devoid of power dynamics,” says Kumar.There are challenges in the way the process is carried out. So leaders have to be aware of the blind sides before discussing such matters with employees.
“Performance reviews are often seen as time consuming, biased, inaccurate and demotivating. Year-end reviews are often ineffective especially when performance has already been delivered. Real-time feedback and quarterly reviews can be much more effective. Incentives and bonus should always be on meritocracy, and in congruence to deliverables and expectations,” Kumar says.
The people stewardship: The HR leaders’ role and the role of culture
The performance management process is seeing changes as the role of leaders is also evolving. In such a situation, the leaders should be aware of the values and priorities of the organisation and tweak their plan of action accordingly.
Uday Chawla, Managing Partner TRANSEARCH India Office, “The role of a chief human resources officer (CHRO) is morphing from being a people’s person and an industry relations person to a more strategy-oriented position. If a company’s culture clashes with the strategy, or vice versa, it is impossible to create an organisation that can achieve its milestones. There is a need to synthesise such systems that can manifest the organisation’s goals.”
New processes blending organisational and personal success
Some of these required changes need new processes and tools. The primary goal of overhauling the performance management system is to create a more aligned, employee-focused, simple and effective process that supports both individual growth and organisational success, says Satya Jha, Chief Business Officer, Grant Thornon Bharat.
He gives the example of “Project Overhaul”, their new performance enablement process that includes elements such as real-time continuous feedback, quarterly one-on-ones with a coach, increased transparency in goal setting, flexibility on goals, alignment with organisational strategy, radical simplicity and clarity, reduced administrative burden and, most importantly, cultural alignment through 360% feedback on how core behaviours are displayed.
“In the erstwhile module, the focus was largely on work-related goals. Now, we have introduced a holistic goal-setting process with the objective of our teams focusing and achieving their work (short term), life (long term) and career (medium term) goals,” says Jha, adding that there is a bid to modernise performance management systems and reinforce commitment to personal and organisation success.