The state of performance mgmt system in India
Despite most organizations having some assessment mechanism in place, managers and employees are still skeptical that performance management adds value
Performance appraisal has always been a closed room discussion resulting in a lot of misconceptions among the team and the individual employees. The system of performance management aims at creating a high-performance environment, inspire employees and achieve business and individual goals. But how effective is it?
Gurgaon- based Salto Dee Fe Consulting Service conducted a research on the State of Performance Management System (PMS) in India in June-July 2017.
The survey revealed that achievement of business goals (identified by 41% respondents), forms the primary objective of PMS in Indian companies.
Compensation decisions and identification of strong/weak performers as per ratings/rankings are also key objectives of the process. The survey also revealed that 57% of the respondents are not satisfied with their existing PMS.
According to the survey results, three key areas require improvement. These have been classified under three heads: Manager Related , Employee Related and Process Related.
For the manager, the top two areas of improvement are Manager bias and their ability to have difficult conversations with the individuals. One of the employee related issues that surfaced based on the survey results is setting appropriate goals.
There were two issues related to the process. One of them is around transparency in the process where respondents shared that they were not very clear about how their assessment is completed.
They are also not very sure on how to rate behaviour related elements.
PMS 2.0 is knocking
The survey reveals that about 25% of the respondents are looking forward to more transparency in the system followed by 20% planning for implementation of ongoing feedback in appraisals and 17% are not looking at any change in the PMS.
The transparency of the process can be improved by an ongoing feedback culture as it helps in overcoming uncertainties. Making the process ransparent requires a series of changes starting with the tools/resources available for providing constructive feedback.
Digital tools can be helpful for the collection of better quality data as well as lead to time-saving and cost-saving. Reputed organizations like GE will now give more constant feedback about their employees’ work through an app “PD@GE,” which stands for “performance development at GE.”
When asked if their current organization is ready to implement a continuous feedback system, only 47% of the respondents depicted a “YES” with a major obstacle being the lack of manager’s capability to give constructive feedback followed by lack of orientation towards
FOR THE MANAGER, THE TOP TWO AREAS OF IMPROVEMENT ARE MANAGER BIAS AND THEIR ABILITY TO HAVE DIFFICULT CONVERSATIONS WITH THE INDIVIDUALS
developing employees.
Managers at times discern performance management as excessively subjective, timeconsuming and unhelpful for the development of employees as they fail to label the differences in performance.
Welcome PMS 2.0
PMS is a building block of organizational success. Hence, not surprisingly, virtually all organizations have in place some type of performance management system. Yet, from this report, we can see that managers and employees are still skeptical that performance management adds value and some even consider this as a waste of time and resources.
This is also because most systems focus exclusively on narrow and evaluative aspects such as performance appraisal rather than looking at the broad problems it can solve.
Focusing on defining goals and following it up with constructive feedback and coaching can help make the process more valuable for the organizations.
Great goals can be defined by following keeping the goals SIMple i.e. Specific, Important and measurable. It is important to define a right number of goals with the right amount of stretch to ensure employees are motivated to achieve the same.
In the case of feedback, most of the firms lack an ongoing feedback culture.
Feedback helps in acknowledging and improving performance as a whole. 70% of the organizations, globally, are planning to implement continuous feedback system.
This research reiterates the fact that employees are looking for continuous feedback on their goals and behaviours. Tools/resources to provide structured inputs would help in better communication and strengthen the connection and collaboration among the team. It’s high time for the industry to adopt an employee-friendly system that can be used for providing/requesting feedback on necessary behaviours.
It can solve the managers’ inability to provide constructive feedback and the need for PMS to change its orientation towards the development of employees that can improve the overall ecosystem.