This time of year many HR departments are slogging through the employee performance review process. Understandably seen as a time-consuming chore by managers and staff alike, formal performance development programs are nonetheless essential HR management tools. Done properly, they improve workers’ skills and productivity; done poorly, an opportunity to align staff with the corporate plan is missed. For HR it’s a chance to show its worth and embed effective people management strategies into an organization’s culture.
When performance plans work well, they bring senior management’s strategic plan for the year cascading down through the organization, eventually appearing as staff goals. Performance reviews are also a chance to address staff professional development, as well as being a mechanism to correct poor performers and discipline staff. What type of system to use to accomplish this is the question.
Technology can be employed, but whether or not HR decides (or can afford) to go this route, underlying principles remain the same. Two decisions to make are: When to perform reviews? And, should goal achievement be linked to compensation?
While the first quarter is typically performance review time, some organizations opt to shift the process to an ongoing yearly one in which employees receive reviews on their hiring anniversaries. (It’s better than birthdays — who wants a bad review for a gift.) While this spreads out the work and avoids the organization taking a collective time out to fill out forms, it doesn’t effectively support the goal of spreading an annual corporate strategy among the ranks. It’s better to align staff goals and the business strategy early on and then spend the year following through. Plus, getting it done in one fell swoop is appealing for those who prefer biting the bullet and putting the task behind them (of course checks to stay on target continue).
A colleague who worked for a large multinational that took the ongoing-hiring-anniversary route complained to me that performance reviews had become a dreaded weekly chore. The organization’s system required each employee to ask five others for feedback to attach to their reviews. In practice this meant every employee could pretty much count on getting at least one feedback request a week. Time-strapped and resentful workers started taking feedback requests home to fill out on weekends. Here’s where biting the bullet beats ongoing pain.
And what about tying goals to compensation? Well, that sounds like a good way to get some internal arguing started. When managers try to set goals, employees will attempt to avoid responsibilities because failure will mean a personal hit in the pocket book. The intent should be to encourage people to stretch and take risks. Why should they do so if it’s their own money on the line? And wouldn’t you prefer someone achieving half of an ambitious plan rather than 100 per cent of soft goals set to safeguard salaries?
And if compensation is tied to job performance, the manager hears this: “A six! Clearly my time management skills rate a seven. A six means a smaller raise, I’m sure you meant seven.”
Battles over point scores won’t get HR anywhere. Employees will strive to reach goals if they’re engaged in their work. What they need is a game plan, not the threat of the penalty box.
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