What Performance Management Strategy fits your Organization?

We don’t like confrontations, do we? What is the reason we despise performance evaluations so much, despite so much time, energy, resources, and money put into them? What are we missing? How to have difficult conversations?

In Today's edition, we'll talk about:

What are Organizations Missing

Organizations often struggle to get the most out of their performance management systems. With a lack of clarity around objectives, goals and expectations, it can be difficult to ensure that employees are performing at their best.

We'll explore the common pitfalls of performance management and how organizations can ensure that their performance management systems are effective and efficient.

• A focus on employee development and growth: Performance reviews should be a two-way dialogue between managers and employees, where both parties can discuss areas for improvement and development.

• Regular feedback: Performance reviews should not be a once-a-year event. Regular feedback should be given throughout the year to ensure employees are on track and making progress toward their goals.

• Transparency: Performance reviews should be transparent and open. Employees should be aware of the criteria they are being judged on and the standards they need to meet.

• Collaboration: Performance reviews should be a collaborative process between managers and employees. Employees should be encouraged to provide feedback and ideas on how to improve their performance.

• Recognition: Performance reviews should recognize and reward employees for their achievements. Employees should be given recognition for their hard work and dedication.

Shikhar Singh, Head of HR at Cutshort suggests that "data is critical in making decisions, as it provides facts and evidence to support opinions. Having data to back up an opinion makes it a fact and can help to shut down any questioning. Everyone should make data their friend, understand it, use it, and rely on it to make decisions, rather than relying on intuition or bias."

FREE TEMPLATE - Employee Performance Appraisal Template (click to download)

Which strategy is fit for which organization?

The best way to choose a performance strategy that fits an organisation is to assess the organization's goals, resources, and culture. Analyzing the organization's current and desired performance can help identify the most suitable strategy. Additionally, consulting with organizational stakeholders and experts can provide valuable insight into the best strategy for the organization.

Shikhar Singh says, “Till a 20-25 member team, peer review works. But when the team grows beyond that, the connections start to get lesser, and that’s when the structure has to come into place and scheduled 1-1s to have to take place.

No one size fits all, so you have to work on it very closely to see if it suits your culture and your people. For organisation X, A composition of 360 + peer-to-peer + self-appraisals + innovation strategy structure works. But for Organisation Y, self-appraisals may not work because there are a lot of folks who have never done that themselves, They're not so well equipped to do it. Hence you need to support them.

So you can't put self-appraisal there because they will undermine themselves while they're high-performing people. So those things you will have to make sure that you're catering to and taking into consideration.

A perfect mix is very important. Let’s take Organisation Z now, there was an organization where 360 would not make sense. Why? because now the moment you put 360 this peer-to-peer review, is not for you. It's a task to please your peers. You will never have uncomfortable conversations with them you will never go up to them and say 'Hey, you, you this idea of yours is very bad.' You will never go do that. Because now you know your monetary development is based on these people. So you start becoming a people pleaser or do you need a people pleaser? No. Transparency and trust should be key pillars.

Additionally, the dialogue mechanism is essential and should be used instead of a feedback mechanism, as it creates a relationship between the two parties and allows for better communication. Feedback is a one-time transaction, while dialogue allows for a more meaningful exchange of information. There should be the ability to have uncomfortable conversations and reflect trust and confidence in the team.

Make your plan- No one knew 360-degree feedback existed 5-10 years back. Now it's a module. You can create your own module, and modules can keep transforming, and improving over time. ”

Rashmi Utnal, Senior Manager - Talent Services & Operations at InfraCloud, mentions, "My expectation for the next year is to set goals that align with my role in the organization, to focus on individual and team goals, to spend time on self-development, and to receive feedback from peers, reporting managers, and stakeholders.

Then the talent review process is a robust process that takes place over a year. It involves HR representatives, managers, and departments coming together to discuss each individual in the team, ensuring that the feedback is fair and unbiased. The process also includes collecting feedback from stakeholders and managers and documenting the discussion. Finally, the CEO and Chief People Officer review the document and discuss any outliers or below-average performance, and list action items for the next year.

The key factor in 360-degree feedback is to share the feedback with the leader or person for whom it is given immediately, along with action items. This allows the leader to work on their areas of development, which is important for setting an example for the team."

FREE TEMPLATE - 360 Degree Review Survey Template (click to download)

Should compensation be based on performance?

Performance evaluations linked to remuneration foster a blame-oriented mentality. It is commonly understood that they promote hierarchy, weaken collegiality, operate against cooperative problem-solving, prevent direct communication, and are too readily politicized. They are counterproductive and disheartening for everyone involved. Even high performers suffer because when their income reaches the top of the salary range, their managers are forced to cease granting them rises, regardless of success.

Shikhar stated, “The simple rule is that you are already getting paid for what you deserve. Your challenge is to get better at your job and not to get better than 10 other people. Appraisals should be based on performance management and not on biases or the authority of the manager or HR. Get India used to have a clear number system where biannual appraisals were given to those who had performed exponentially well. Transparency is important so that people know what to expect. Feedback should be taken from the team and improvements should be made based on that.”

Rashmi's take is- "Performance reviews are more about sharing qualitative feedback and not about salary. The feedback given to individuals should be timely, with larger organizations wait at least a quarter before giving feedback because it is not possible to immediately report it. Salary revisions and promotions are separate from this process."

Compensation is based on a blend of tenure, competence and performance reviews. The performance reviews take into consideration an employee's past performance, the potential for growth, and even the potential for promotion. This blend of factors helps us to ensure that everyone is being fairly compensated for the value they bring to the organization.

How to convey PIPs?

"PIPs are taken as a punishment and not a chance to learn. Employees submit their resignations immediately when put on a plan. The shame around PIP has to go. The conversation is taken by both Manager and HR, Manager for communication and HR for logistics." says Rohan Mankad, HR Executive at Springworks

Rashmi says - “Conversations around PIP are tough, My advice to these managers would be to always go with data when giving feedback. Provide specifics and back up their feedback with evidence. Avoid sandwich feedback, which can be confusing, and instead focus on providing positive feedback first or areas of development first, followed by policies and suggestions on how to improve. ensure that expectations are clear and documented when a new employee joins the team, Provide continuous feedback and adjust objectives if necessary when conducting a Performance Improvement Plan.”

Shikhar says - "I was asked My happiest moment as an HR professional - It was when I saw someone successfully move out of a Performance Improvement Plan (PIP). This was a wake-up call for them and showed that PIPs are not always pre-exit plans. It is important to have clear criteria for PIPs and to ensure that they are used to help the employee improve their performance rather than as a formality to let them go.

To ensure this, regular performance reviews should be conducted and onboarding should be done in the first six months to help the employee understand the culture and working style of the manager. Mass customization should be done to ensure that every cohort gets satisfied with their particular set of things. The narrative around PIPs should be changed to make it an employee's friend instead of an enemy."

If you have any feedback or a topic you’d like us to cover, hit reply to this email or text Janhavi on Twitter.

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