New Year festivities are almost over. Annual plans are being made and efforts are being focused to implementing them. Organisations must be reviewing their performance with regard to last year. It is an opportune time to look at employee performance evaluation.
Performance has always been a buzz word in business circles. This time of the year is the typical preparation time for a wave of performance appraisals, particularly in organisations where the appraisals are linked to the calendar year. What is performance? The dictionary meaning is that it is the execution or accomplishment of work. Moving beyond, it can also be regarded as achieving a planned set of objectives utilising the available resources in an efficient and effective manner.
Performance can happen at three levels in a typical organisation. I would call them triple Is.
Individual Level: This is the core where a person should deliver what he/she is expected.
Interactive Team Level: This is the spillover from the core. When performing individuals collaborate, the interactive team becomes a performing team.
Institutional Level: When such collaborative teams perform, that impacts the organisation. Hence, the institution becomes a performing one.
There is one solid “I” needed in order to link the above three Is. That is integration. I have seen individuals getting rewarded for their performance, while the institution is not performing well. Also, the institution may do extremely well, yet depriving the rewards for individual performance. Both these cases highlight the lack of integration. The solution is to have a properly designed performance management system, with the needed inputs from all involved.
Essentials of EPE
Performance is all about delivering results, fulfilling expectations. A performance management system of an organisation should answer the what, why and how aspects of organisational performance. My focus today is on employee performance, particularly, on how it is evaluated. Employee performance evaluation (EPE) can be a treasure or a torture based on a variety of contributing factors. They can be institutional as well as individual. Performance oriented culture where employees are clearly aware of what they are supposed to do in order to achieve organisational objectives, is one such example.
“Are you satisfied with your performance evaluation?” I have been posting this question to numerous groups representing a wide cross-section of Sri Lankan business community. The majority give the diplomatic answer of “to some extent”. According to research done by Larson and Callahan (1990), 65 percent of the companies are dissatisfied with their performance management system. Based on much other recent research, the worldwide situation with this regard has not changed much.
What could be possible reasons? Let me propose five fallacies of EPE that would address the key issues.
1. Form filling vs. fact finding
Rather sadly, EPE has become a form filling ritual in some of the organisations. I have personally seen how some senior administrators giving blank sheets for their subordinates to sign saying that “this will help you to get your increment”. The vital link between EPE and organisational performance is alarmingly lacking.
In refuting this fallacy, what should happen is the proper fact finding. The appraiser should have a clear understanding about the employee’s actual performance, based on factual evidence. It cannot be done overnight unless a manager carefully observes and take notes throughout the year.
2. Fast judgment vs. fare assessment
Everyone is pressed for time. Managers resort to rush through a large pile of appraisals and inevitably giving a fast judgment. Why it is not OK in most of the cases is that, an over-reliance on your memory, without considering the strengths and shortcomings of the individual in detail. It may be argued as a case for efficiency, but effectiveness in achieving the expected results is far more important.
Therefore, the only way to overcome this fallacy is to have a fare assessment. That demands the investment of your time. It is doing justice to someone’s future by accurately assessing the past performance.
3. Fun praise vs. focal points
There is a temptation among managers to be popular. They resist giving bad news or negative feedback to their subordinates. I recall once, a Production Manager telling a HR professional that he will sign and deliver the increment letter, but the warning letters or disciplinary letters should be signed by HR. The danger of this approach is that a manager might divert to the extreme of giving “fun praise”.
According to Jack Welsh, the biggest injustice against an employee is the deprivation of his/her right to know how exactly he/she is performing. We have the typical Asian culture emerging here. Rather than telling upfront, if someone is underperforming, we tend to say, “not bad”, “you are OK”, “do not worry” etc. The employee is getting a false signal that he/she is doing well, which might not be the reality.
One sure cure to move away from this fallacy is to have focal points for performance discussion. Your feedback to the team member should be focused on specific behavioral aspects, backed by real examples.
4. False opinion vs. full observation
In management, we have a high regard to MBO approach which means “management by objectives”. Unfortunately, we have another MBO in Sri Lanka. That is “management by opinions”. We tend to jump into conclusions based on what someone has told us about a particular individual, without proper fact finding.
One reason for such tendency could be the lack of time for a superior to observe his/ her team members and assess how they are going ahead in achieving their objectives. Instead, trusting the “grape wine” too much, or relying on others input on an individual will often lead to false opinion. Why this is damaging, is that the respective individual is not getting an opportunity to share his/her side of the story.
In overcoming this fallacy, the only way possible is the regular observation. Maintaining a log book where you note down the plusses and minuses with respect to the behaviours of your team mates. It can be in soft copy involving any good program or a traditional note book.
5. Futile accusation vs. frank discussion
This is another common issue with managers lacking empathy. Reaching one-sided judgments without looking at both sides of an issue. Take a behavioural issue such as indiscipline for an example. The supervisor can make a firm accusation that the particular team member is not following his instructions. Instead, having a frank discussion and giving specific feedback will heal the wounds.
A frank discussion will pave way to a genuine two-way process in ironing out differences between a team leader and a team member. It should be an integral part of the EPE. Fallacy of futile accusation can be nullified only by engaging in such a process. Rather than cluttering your mind with negative perceptions of an employee, going with an open mind and verifying the doubts through a discussion is the tested and proven method for performance enhancement.
Forward path beyond five Fs
The above five fallacies of EPE are interrelated and influence an individual to take an incorrect decision about another individual. That’s where institutional mechanisms can add value. Developing the capabilities of conducting EPE through training is one such example. Ensuring transparency of the EPE process, with HR department acting as an auditor, is another possible initiative.
Humane Results will only be possible with conscious moves to overcome the five Fs. Then both the performance of the institution as well as its individuals will be truly fabulous.
(Dr. Ajantha Dharmasiri works at the Postgraduate Institute of Management. He can be reached on firstname.lastname@example.org or www.ajanthadharmasiri.info.)