A burning issue companies are facing is dealing with rising discontent among employees over their compensation and its appraisal process. To boost morale and productivity, companies have to overhaul their performance management processes.
They need to take giant leaps to correct the way HR and line managers handle this process.
It is not about its functionalities, but more to do with effectiveness. Most organisations are still at a very nascent stage of this transformation. The HR department and managers are still using this mundane annual exercise, with most elements being generic with few factors considered.
It is mostly an insipid exercise with not much integration of output data.
It is certain individual overtures that make up the crux of their evaluation, and never holistic considerations.
Change is needed now
There is a compelling need to build comprehensive performance management strategies to develop integrated processes with active employee engagement in performance evaluation and execution.
It must not be an annual exercise, but a continuous process embedded in monthly performance scorecards to ensure employees can self-evaluate and not be surprised to see their appraisal ratings at the end of a year.
Their performance should link to outcomes in Key Result Areas (KRA) monitored regularly. These must have definitive weightages based on Key Performance Indicators (KPI).
Each of these must focus on specific roles.
For operating people in project management organisations, the specific employee deliverables can be measured through client scorecards, project profit and loss accounts, employee engagement, and other parameters.
Ditch outdated measures
The employee must not be saddled with a cumbersome evaluation process with long questionnaires, subjective assessments, and gruelling sessions at each appraisal cycle. There needs to be a monthly or quarterly review process through a digital interface the employee can self-monitor and review regularly.
Companies must make a conscious effort to avoid building grievances at the end of the annual appraisal, and instead engage them in this process across the life cycle.
Performance should be mapped with specific deliverables, and with full integration of related data, to avoid paperwork and wastage of executive time.
These can help project teams to self-evaluate. It is a must that such systems be implemented to enable employees have a more transparent preview of their accomplishments.
Not all elements of performance can be measured in numbers or evaluated at short intervals. Two or three performance criteria elements will require performance scorecards that can be self-evaluated.
However, subjective aspects such as peer feedback, learning and development initiatives, and staff engagement will require half-yearly or quarterly sessions with departmental heads to counsel on the outcomes. It helps to ease any discontent, and would make the appraisal more meaningful.
Morale takes a knock
It is always a daunting task to complete this process to the satisfaction of all.
If guidelines are not meticulous enough, one can inevitably poke holes and raise questions about the futility of such an exercise. In most surveys, the employee’s grievance concerning this aspect is always in the lows, and it is therefore critical for the management to concentrate on this to enhance 360-degree engagement of all stakeholders.
Staff should be able to see their performance against their company’s performance as well.
For all employees, especially those on high performing index, there should be a way to engage them to present the company’s viewpoint concerning its performance credentials and align these to their expectations.
In spite of excellent individual performance, these reward mechanisms may not be commensurate as the company results might not be good enough.
These might restrict the management in compensating adequately, a common challenge for management in challenging conditions.
When individual performances are interlinked to their divisional financial performance — or for that matter with that of the company — there remains a lot of ambiguity to segregate the two elements and navigate its sensitivity objectively.
There is never a solution to fix all, but it is time to revive a transparent and more engaging approach to build robust employee performance management systems.
— Tariq Chauhan is Group CEO at EFS Facilities Services Group.