Looking at performance management from the employee’s perspective

THE PERFORMANCE MANAGEMENT PROCESS STARTS WITH SETTING APPROPRIATE GOALS FOR ALL EMPLOYEES

Performance management is one of the most important talent management processes known to improve the performance and organizational commitment of employees. The business environment in India is expected to face further disruption in the coming years due to technological, economical and demographical changes.

Today’s organizations are dealing with multiple stakeholders simultaneously, while operating in highly complex markets. This has manifested in a change in the expectations of the organizations from their employees, and vice versa.

Thus, the study of performance management has gained a lot of traction recently. The fundamental question now is how to rate performance in a rapidly evolving business cycle which is shifting towards a shorter project lead time.

Business consulting firm Salto Dee Fe (SDF) undertook a survey on this area of performance management earlier this year.

There were 262 respondents, with 27% from IT/ITES sector followed by BFSI (14%), Consulting (13%) and Manufacturing (12%)

The study tries to uncover various facets of performance management such as: Objectives and Effectiveness The Goal setting and Feedback process

Impediments

Possible areas of improvement Here are the key findings:

As far as satisfaction with existing performance management systems (PMS) goes, 48% of respondents were not satisfied with existing PMS. There was a 900 bps improvement when compared with the 2017 Survey, where 57% of the respondents were not satisfied. 86% of respondents believe that ‘Achieving Business Goals’ is the primary objective of a Performance Management System, followed by Alignment with Business Goals (73%) and Identifying and Managing Strong/weak Performers (69%).

With reference to goal setting and feedback,51% respondents have annual goal/bi-annual settings currently.

Survey data shows that organizations are moving towards more frequent goal settings with 26% respondents stating they have a quarterly model currently. Respondents felt that the managers should be trained for improving the quality of feedback.

Lack of focus, difficulty in measuring behavioral components’ and inappropriately set goals are some of the major impediments in the performance management process with 92% of the respondents wanting changes in their existing framework.

According to the survey, areas that need improvement are making the process more transparent and introducing an ongoing feedback system.

The rapidly evolving business environment demands organizations to be dynamic and the employees’ objectives have changed accordingly. As a response, the objectives set should evolve to reflect the same, with the goal setting discussions and reviews happening more frequently.

The primary purpose of feedback is to improve performance. SDF believes that identifying and communicating ‘what’ areas employees need to improve enables learning.

Current feedback processes are unidirectional (supervisor to subordinates). Feedback should be more frequent and incorporate views of supervisors, peers, customers and subordinates to understand different perspectives.

Instead of looking at PMS as just a tool for performance appraisal, organizations should start to exploit the strategic benefits of Performance Management Systems.

Organizations can look at accurate goal setting, frequency of reviews, and a feedback mechanism for ensuring the goals of the PMS are met.

The performance management process starts with setting appropriate goals.

These goals should drive the organization’s strategy and also balance an individual’s career aspiration. It is proven that goals aligned with self-interest increases motivation to perform. A recent study shows that agile organizations need to have team goals along with individual goals.

Employees should understand how goals are set and how they are being evaluated. Keeping the performance management process transparent ensures that employees feel that they are being fairly evaluated and they trust in the organization.

We know that introducing a continuous feedback has a positive impact on the performance of the employees.

In our opinion, organizations should plan on introducing a continuous feedback mechanism and making the performance management process more transparent.

Also, the feedback should also focus on aspects like personality development and career planning for employees.

As we move towards a future based on capturing greater synergies between people and processes, it’s time we looked at the PMS from the lens of the employee.