'Managing employee performance': Why it’s time for companies to rethink

An evolved, trusting, empathetic performance management system can make a big difference.
'Managing employee performance': Why it’s time for companies to rethink
'Managing employee performance': Why it’s time for companies to rethink
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In the 90s and early 2000s, a few companies set global standards on how to manage performance. Many of them are facing challenging times now and their methods and models have come under question. Why did this happen?

Millennials’ joining the workforce, brought with them a different set of expectations. They were looking for quicker feedback and faster gratification. Their institutional loyalties were different and they had more career options. The Performance Management System of the past was slow to respond to these. Workplaces too, suddenly became volatile, uncertain and complex. Human behaviour is more complex than earlier thought. 

This beckons the need for organisations to bring radical changes and rethink how to view performance.

Copy by all means, but do what is right for you

A handful of organisations have set process benchmarks, especially the Performance Management Process. Organisations raced to emulate them, most of the times without understanding the context. This approach needs to change. While it is always useful to copy an idea and not reinvent everything, we would do well to remember that a ‘successful formula’ that is right for one may not necessarily be right for somebody else. We need to rework the formula to align with our culture and context.

Discard what is no longer working

In the last two decades, appraisals of people focused on driving numbers and measuring productivity, drawing on industrial ideas like six sigma. Performance Management focused on differentiation, separating the achievers from the laggards. It was pejoratively even called the ‘Rank and Yank’ process. While the top performers were rewarded, poor performers feared for their careers. In today’s world, employees seek organisations that take a holistic view of their contribution and well-being. The younger generation does not believe in an annual performance review system, they seek continuous feedback, they seek respect for the uniqueness and all that they bring. They seek equitable rewards. They expect to build careers in places that have a purpose and a soul. We should therefore be ready to discard old ideas and usher in new possibilities. Organisations have started to respond. Annual reviews are being replaced with continuous multi-input feedback. Appraisals are ‘Feed forward’ as opposed to ‘Feedback’, keeping the spirit developmental.

Understand that human behaviour is complex

The older systems of performance measurement discounted intangibles. They would not differentiate stark ambition over consistent work ethic. While they did drive productivity, they also instilled fear and hatred for performance reviews. People viewed performance reviews as unjust, however rigorous they were. These systems failed to create lasting loyalty.

Human behaviour is complex and industrial systems come short in measuring and managing their performance. Human performance is a factor of ability as well as intent. Inspiring people to consistently better their performance requires wisdom in leaders. Research has repeatedly shown the benefits of boosting the morale of workforce through constructive mechanisms, through inspired leadership that values a human being first and foremost. While demands on the employees remain as much and even more, managers need to demonstrate empathy and fairness.

Organisations in the development sector have always adopted a much more humane approach to performance measurement. They have valued intangibles and favoured long term impact over short term output.  They have emphasised the ‘human’ aspect of the ‘resource’ and prioritised intent over outcomes. Perhaps, organisations in the corporate sector are also getting there now.

In times when the world needs to move towards greater mindfulness and connectedness, where cooperation and working towards a better world is the cherished goal, an evolved, trusting, empathetic performance management system can make a big difference.

Sudheesh Venkatesh is Chief People Officer, Azim Premji Foundation

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