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Monday, 28 October 2013 00:52 - - {{hitsCtrl.values.hits}}
It appears that there is a renewed interest on performance management in both private and public sectors alike. I recently got involved in developing a performance evaluation system with the Public Service Commission for the public sector. We discussed the nature and features of it last week. Despite that, I thought of revisiting the fundamentals of performance evaluation, in identifying four doors of performance passage.
Performance in focus
Performance matters for both private and public sectors. 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 is all about delivering results, fulfilling expectations. A performance management system of an organisation should answer what, why and how aspects of organisational performance.
My focus today is on employee performance, particularly, on how it is evaluated. Employee performance evaluation 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.
Performance as a passage
Performance is all about managing results. That is beginning with the end in mind. Together with results, you need the appropriate behaviour. Performance management can be regarded as a systematic process of doing planning, monitoring, rating and rewarding. This can be compared to a passage with four doors. I would call them four Ds, define, design, develop and deliver. Let’s go through the details.
Door 1: Define
This is the starting point. In an effective organisation, work is planned out in advance. Define means setting performance expectations for groups and individuals to channel their efforts toward achieving organisational objectives. Getting employees involved in the planning process will help them understand the goals of the organisation, what needs to be done, why it needs to be done, and how well it should be done. In essence, each one should know what one should do, how to do it and why it should be done.
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 defined performance management system, with the needed inputs from all involved.
We pass the define door and move along the performance passage until we reach the DESIGN door.
Door 2: Design
From the defining door we enter into the passage leading to the design door. The process should be people friendly and progress oriented. In other words, a clear format should be there for measuring tasks and competencies. A cumbersome design with lengthy document having complicated details will move the employees away from it.
A lot can be improved in Sri Lankan organisations in this respect. I have seen in some cases, the organisations wait till the months of October and November and convert what they have done as objectives. It is just for the sake of having a set of objectives in order to link with their annual appraisals. Ideally, there is a need to set performance measurements and standards at the outset.
Performance elements and standards should be measurable, understandable, verifiable, equitable, and achievable. That is the required clarity at the design stage. Through critical elements, employees are held accountable as individuals for work assignments or responsibilities.
Employee performance plans should be flexible so that they can be adjusted for changing program objectives and work requirements. When used effectively, these plans can be beneficial working documents that are discussed often, and not merely paperwork that is filed in a drawer and seen only when ratings of record are required.
Rather sadly, performance evaluation 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 individual performance evaluation and organisational performance is alarmingly lacking. 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.
I have heard how managers complain about the lack of time in conducting periodic reviews. What they essentially point out is to the time consuming nature of the form filling. The point here is to design a simple mechanism for the managers to give informal feedback efficiently.
In moving ahead beyond the design door, we come across the develop door.
Door 3: Develop
Employee developmental needs should be evaluated and addressed, in order to manage their performance. Developing in this instance means increasing the capacity to perform through training, giving assignments that introduce new skills or higher levels of responsibility, improving work processes, or other methods. Providing employees with training and developmental opportunities encourages good performance, strengthens job-related competencies, and helps employees keep up with changes in the workplace, such as the introduction of new technology.
There is a positive trend of people development can be seen in the local organisations. The concern however is the integration. Training and development can go at a tangent without properly linking with performance improvements. What is required is a holistic view with a well-integrated approach.
Carrying out the processes of performance management provides an excellent opportunity for supervisors and employees to identify developmental needs. While planning and monitoring work, deficiencies in performance become evident and should be addressed. Areas for improving good performance also stand out, and action can be taken to help successful employees improve even further.
We pass the develop door and move along the performance passage until we reach the deliver door.
Door 4: Deliver
This is the critical juncture. From time to time, organisations find it useful to summarise employee performance. Such a course of action helps with comparing performance over time or across a set of employees.
Organisations need to know who their best performers are. Within the context of formal performance appraisal requirements, rating means evaluating employee or team performance against the elements and standards in an employee’s performance plan and assigning a summary rating of record. The rating of record is assigned according to procedures included in the organisation’s appraisal program. It is based on work performed during an entire appraisal period.
Sri Lankan organisations are increasingly getting used to objectively rate their employees. Sound performance management systems have been established at least in multinationals and high-performing local organisations. The constant challenge is to manage expectations of employees.
Another vital dimension of delivery is rewarding. Employee satisfaction or dissatisfaction largely depends on how rewards are linked to performance. Rewarding means recognising employees individually and as teams, for their performance.
Rewards do not need to be monitory always. Good managers don’t wait for their organisation to solicit nominations for formal awards before recognising good performance. Recognition is an ongoing, natural part of day-to-day experience. A lot of the actions that reward good performance—like saying “Thank you”—don’t require specific regulations.
Once we pass through the deliver door you reach the end of the passage leading to desired results.
Way forward
We looked at the four doors of performance passage. The status of how we pass through it in Sri Lankan organisations appears as far from satisfactory. From the current state of performance evaluation being a routine custom with less impact on organisational success, it should rapidly evolve to be a critical contributor for organisational progress. The time demands us to act. Knowing clearly should lead to doing cleverly. It is up to individuals, interactive teams and institutions to make a difference for them as well as for others. That is the essence with regard to moving through the four doors of performance passage in search of prosperity.
(Dr. Ajantha Dharmasiri works at the Postgraduate Institute of Management. He can be reached on [email protected] or www.ajanthadharmasiri.info.)
