Human capital is the only thing that cannot be quantified in a balance sheet, yet it is also the one thing that can make or break a business. How then do you try to make sense of all the qualitative data that comes from the Human Resources department?
The idea of a workplace today is very different from what it was a generation ago. Every day, we come across pictures of offices across the world that have done away with the desk and cubicle model for something very radical, we read about companies that work with all of their employees located remotely. We also come across instances of companies that were once doing very well but have made their way to the graveyard now. Such a dynamic marketplace makes us wonder what more we could do to harness the potential of our employees fully and encourage them to perform better each day, while also accounting for their personal and professional goals.
Performance Management Systems are the core of HR practice, yet a few insights from the ‘2000 Performance Management Survey’ by the Society of Human Resource Management are still relevant fifteen years later. Even today, it is true that several executives shun these systems, believe that they don’t reflect the work they’ve put in entirely, and the surveys are usually found pushed to the corners of employee mailboxes. This makes us ask a rather unconventional question- is it a problem of the employees not taking to the system, or is it a case of the system being faulty?
Changing objectives call for different practices, and we believe that the days of long surveys taken at the end of the fiscal year, just in time for appraisals are over. Such systems have quite a few major fallacies:
They place too much emphasis on the year gone by, largely ignoring the year that needs to be focused upon- the year that is yet to come.
They are monotonous, tailored on a one size fits all policy, and may not always reflect the aspirations and goals of each employee as they should.
Hierarchical systems that ask managers to measure the performance of their team miss one basic question- against what? The concept of ‘best possible performance on the job’ is fast becoming irrelevant.
They also ignore one other aspect- that an organization runs on people and that bits of paper don’t always draw a picture of the person sitting behind the desk.
A radical shift in how PMS are designed would involve
Quality conversations. When talking to your employees, do you understand their personalities, motivations and anchors? Is your workplace addressing these needs? Based on the inputs you’re looking for, choose either guided conversations or set an agenda. Juniper Networks and Adobe are pioneering this tactic.
The best way to get an honest opinion on anything is to NOT link it to future rewards or repercussions. By separating salaries from feedback mechanisms, employees feel more secure about giving honest feedback and justifying their performance.
Google has done away with manager reviews and instead uses self and peer reviews as a benchmark for performance. This works- self evaluation helps the employee understand where he/ she needs to improve, peer review highlights the individual’s team skills and the impact he is having on the team, and managers get to view all this with objectivity.
Using a trust based approach, wherein the organization believes that they have already recruited the best of the best, and that each employee is already working towards the organization’s best interests.
Shifting to a digital approach to HR is helping a lot of organizations reduce the hassle of paperwork. Digital tools help provide and evaluate feedback in real time, eliminating the need for a drawn out process every year.
Skill based incentives are a great way to encourage and support learning. Employees who possess a niche skill are rewarded based on its value to the organization, thereby encouraging more employees to build on their relevant skills.
From our experience, we have identified a few places where employers go wrong with their employee reviews.
For start-ups, it is ideal to have quarterly reviews. Continuous reviews are a great way to drive home company values to the employees while also understanding their aspirations in the early days of an organization. Start-ups may also find themselves influenced by the systems and practices followed in the founders’ past workplaces. It is important to remember that when it comes to people, there are no standard solutions, only tailor-made ones.
Before radical systems can be implemented, it is imperative that all employees in managerial positions are coached and counselled in dealing with their team members’ reviews impartially, and on a standardized basis.
Asking employees to come up with clearly defined goals for a year is easy for the purpose of monitoring, but also runs the risk of putting them all into self designed boxes. For an organization that thrives on creativity, this may be detrimental.
By looking at efficiency and effectiveness as benchmarks of growth and learning as opposed to performance (measured against a standard) or productivity (thereby reaching the conclusion that more time spent on the job equals greater achievement), the organization gives employees the opportunity to use their skills and learning to do a great job and enjoy a better quality of life professionally and personally.