Performance Management Realities Contd...

In the previous post on Performance Management Realities, I mentioned the bottom of the pyramid and how it becomes nigh impossible to have a productive dialogue between the manager and the job holder.

Chances are this vast population is assigned routine tasks, either on the assembly line as production or quality officers, or as back office support staff and administration officers. Motivating this group can be a challenge and understandably so, their managers keep piling on work, mostly repetitive in nature. The smarter ones find a way to beat the system while the rest merely burn out or remain resigned to status-quo.

The underlying threat here is that when these employees become disengaged employees, they can cause a lot of damage that may not be apparent right away but can definitely hit the very fabric or culture of the organisation, in the long run.

This is where the importance of HR being aware of the business is deeply rooted. Without a fair understanding of operations of the business, HR can never make a case of how important it is for the operations managers to conduct a meaningful appraisal discussion with their reports. Alongside this, the senior management - heads of functions/departments need to play a big role in communicating with this group of employees, perhaps in the absence of their direct manager(s). This skip level appraisal meeting can throw up insights that would get overlooked if left to their immediate manager(s).

Middle management is usually better off with feedback but to ensure that the next level of employees appreciate their role in the larger scheme of things is quite a task.Here again, the intangibles play a huge role and HR would do well to incorporate aspects of HOW these employees go about their jobs and not just HOW MUCH they do. Being a sizable population, they need to be trained in understanding the values of the organisation and what actions demonstrate such values.

Another approach would be to include a section on 'internal customer' feedback. This way, the job holder is taken that extra step closer to understanding the importance of their role in the organisation.

The bottom line therefore points to having multiple formats of the appraisal mechanism. This also means HR needs to get trained on the 'business' and 'operations' and subsequently devise methods that truly provide scope for evaluating performance and its impact, regardless of the nature of the job. Emphasis needs to be laid on the development opportunites and subsequent growth within the organisation. Only by involving the senior management in periodic reviews of this band of employees can organisations live up to claims such as 'people are our greatest asset', 'we believe in meritocracy' and the like.

Performance Management Realities...

In large organisations, especially manufacturing and service industries, it is possible that the pyramid is quite tall. Often times, in such scenarios, there is a sizable number of employees at the lower end of the food chain. This population is admittedly not equipped with the aptitude to be able to appreciate the concept of self appraisal, let alone 360 and what have you. I don't want to even get started on the unionised workforce...

So this band of employees are typically in the age group 30-45 and have a graduation degree to flaunt but nothing else to show for it, they would typically be handling routine jobs like being chemists, production officers, or handling administrative jobs. They would be mighty pleased to get an annual salary increase that's slightly above the annual inflation rate in the country. And this perhaps is also the reason why they seem to be the neglected lot when it comes to appraisal discussions and feedback for development.

It is a known fact that in the Indian scenario, the annual increments are often done in retrospect, the letters announcing the increased salaries and re-designations are usually ready in May, handed out to employees in June with the safest footnote that HR has - "WITH EFFECT FROM" 1st April!

During several roadshow sessions in reaching out to the entire population of employees for awareness sessions on what they can expect from the company's appraisal process, we learnt a few shocking things. Some employees would notice that in one particular month -May or June at the earliest, their salary accounts are credited with a higher than usual amount. Voila! They realise then that some form of appraisal has occurred and therefore their salaries are different now. They then wait patiently for the letter that lists out what their salary structure looks like.

And yet, Performance Management is one of the biggest activities that the HR department undertakes in the months January through whenever they warp it up... Appraisal forms are designed, distributed, presentations on SMART goals circulated, ratings obtained, force fit into Bell-curves done and excel sheets pored over to establish the impact of ratings on salary increases and the like.

Organisations that intend to take their appraisal process seriously need to understand that it HAS to be a continuous process, something that is done right through the year, periodic reviews (quarterly if not monthly) are done and feedback shared with the employee and the heads of the respective departments. Any review that doesnt involve a formal interaction between a manager and the job holder, leading to a sign off is pointless and can seriously dent the performance culture of the organisation.

The trouble really begins at the top. Though there are very clear agenda and strategy that the CEO and his direct reports have, they seldom percolate down to the operational levels in a structured manner. Without this one critical step, HR would always end up cutting a sorry figure when it comes to administering the process of goal setting for teams and subsequently individuals. Often there is a disconnect between the top management and the HR operations team when it comes to the roll out of the appraisal process. And HR is to blame squarely for not ensuring that the organisation goals are formally shared to be broken down into department goals and so on.

Agreed that often due to changes in the business environment, the organisation goals can change course but then this is exactly what gets addressed when we have periodic reviews.

The other critical problem with appraisals is the fact that there is a lot of focus on WHAT is being accomplished and in the process HOW it is being done is overlooked. This is where the culture and value systems of the organisation comes in. It is the primary responsibility of HR to identify what actions and attitude are in line with the organisation's value system. It is the subsequent responsiblity of the heads of various functions/departments to constantly encourage positive behaviour among their team members and always follow the fact that 'the ends never, ever justify the means'.

Addressing this becomes easier when there is a mature HR team that looks at the importance of having a training agenda that enables employees to focus not just on the skills required for success on the job but also to mature as individuals and become role models when it comes to living the values of the organisation. While most appraisal forms have a space for 'individual development needs', rarely does this get translated into action and as a result HR again stands to lose face and the appraisal process gets relegated into a form filling exercise.

Give me the bad news...

An executive on a tour, visiting operations and sites of the company's business may feel good at the end of a long day of presentations by the local management team(s), figuring that everything is going smooth and that things are under control, in safe hands and other such cliches.

Armed with this first hand experience, HQ may in turn feel reasonably secure, look at top lines and bottom lines - however in the case of an accident or a disaster, remedial measures would be unleashed. Chances are, it is only in the event of a disaster that remedial measures are thought of.

Given the fear of the messenger being shot, or having fewer friends, etc., it is only obvious that communication systems, especially the bottom-up comm is generally packaged to give the sense of comfort - all is well!

The top-down communication also tends to seek only the good news, if not explicitly but by giving out signs to that effect, and the messengers therefore steer clear till 'the bad news' culminates into a disaster or a failure that impacts the long term prospects.

The fact remains that if bad news is brought to the notice of the leadership/executives of the company, a lot of things can be fixed before them getting downright messy. This approach would invariably instill a sense of insecurity around, but really its a small price to pay for the long term security of the business.

Good news doesn't require any decision making but bad news, if made available asap, can help get a fix on things. Certain organisations formally encourage supervisors and managers alike to find out if someone or some operation is headed towards 'the bad news'... well that's good news, provided organisations take the cue and sensitise their workforce and managers alike that bad news, detected early can actually save the day.

The trouble with Benchmarking

Learning from others' mistakes or drawing inspiration from the success of another company, is all very good. and this leads to benchmarking, which is rational, considering the ultimate performance, good or bad, is figured in comparison to others.

The real trouble with benchmarking is what Pfeffer and Sutton* call 'casual' benchmarking -

a tendency to get influenced by a certain set of 'best practices' and applying them at ones own organisation - only, never to get any real success.

The Southwest - United Airlines case is one particularly relevant one. Southwest practices were copied by United Airlines, casual dressing for front office and security positions, scrapping of meals onboard, and reduced time spent by planes on the ground. Yet Southwest had much greater success than United Airlines which ultimately got grounded.

Likewise, the Toyota impact on the automotive industry was nothing short of phenomenal. Soon, the American motor companies began implementing the japanese management techniques and initiatives like JIT inventory management, Statistical process control, etc. However, they couldn't quite replicate the success of Toyota.

The bottom line really is to consider the philosophy behind those seemingly great practices and not just be myopic and limit onself to the immediate benefits thereof. Southwest Airlines did not terminate a single employee during their restructuring and therefore the management initiatives were successful. Toyota still remains ahead of the US automakers in quality/design features as also on productivity. Toyota's success was not based just on its techniques, but on the mindset of total quality management and continuous improvement. Their relationship with their workers enabled it to tap into their deep knowledge.

As such, Benchmarking would yield relevant insights only if proper planning and specifics of the aspects to be benchmarked are deliberated upon by the senior management. Some aspects are better considered within the industry - salaries and hiring practices at entry level positions, incentive schemes for instance. However certain other aspects such as safety practices, employee orientation, operations related practices etc can be benchmarked across industries. These and such other perspectives need to be addressed right at the beginning and then move towards the actual exercise.

* Pfeffer and Sutton are faculty members at Stanford and have co-authored "The Knowing-Doing Gap" and "Hard Facts, Dangerous Half Truths and Total Nonsense".