Performance measurement is a tool that creeps out of the HR manager’s closet every time the company is in trouble. Strictly speaking, it should be around in good times and bad. But when things are going well, folks tend to be arbitrary. The boss recommends an extra increment and promotion to the guy whose face he likes. Yes, the people also in the running for that promotion may feel unhappy. But they too have their sponsors. Besides, if they are all that cut up about it, they can always vote with their feet and find another job. They will probably end up with an even better hike and designation.
When pay hikes are hard to come by because of the parlous state of the bottomline, performance management comes into its own.
“That’s the time when you start hearing talk of 360 degree appraisals,” says Mumbai-based HR consultant Shashi Rao. “The HR department starts a process of having your subordinates, peers and bosses rate you. It sounds very democratic and up-to-date. But make no mistake, your increment — if there is one — has already been decided. The whole purpose of the exercise is to share the blame.”
There is a lot of talk of performance reviews in India today, particularly in the information technology sector. Infosys has ranked 2,200 of its employees as underperformers. At Tata Consultancy Services (TCS), 1,300 underperforming employees will be laid off in the next few months. It’s not as though this hasn’t happened in earlier years, but the numbers were much lower.
Rao says there are some rules of performance measurement one must remember. The first, as already mentioned, is that it comes into its own only when things are looking grim.
Second, it tends to become more professional — or arcane — at such times. Basically, when you are handing out rewards, you stress the interpersonal factor. When you are talking about a voluntary salary cut, you blame the spreadsheet.
Third, is that performance measurement in good times deals with the highfliers. That’s when you hear of lavish bonuses. When times are bad, performance measurement shifts to the other end of the spectrum, to identify those who are “not up to the mark”.
There are other things one needs to remember. Performance measurement can be arbitrary. It may differ dramatically from company to company even when they are using the same metrics. “The HR department of a company adopts the cultural style of the CEO, particularly if he is an imposing personality,” says Rao. “You can be acceptable in one organisation, unacceptable in another.”
There have been attempts to introduce some system and discipline in this arena. With limited success. “Despite the increased usage and attention, many companies continue to struggle with defining and managing their performance measurement system,” says an article by Mercer, a global leader for HR and related financial advice, products and services.
“The performance measurement system must reflect each organisation’s unique industry dynamics, business strategy and management style,” it says.
The article lists “the seven deadly sins of performance measurement”. Two stand out —
* To be effective, the performance measures you use must be commonly accepted and well understood by everyone — immediately. No says the article; it is sometimes necessary to be complex.
* All senior executives should be rewarded using the same performance measurement programme. No, says the article; it is sometimes necessary to be different.
Confusion continues. It has clearly become necessary to evaluate how performance systems themselves are performing.
When pay hikes are hard to come by because of the parlous state of the bottomline, performance management comes into its own.
“That’s the time when you start hearing talk of 360 degree appraisals,” says Mumbai-based HR consultant Shashi Rao. “The HR department starts a process of having your subordinates, peers and bosses rate you. It sounds very democratic and up-to-date. But make no mistake, your increment — if there is one — has already been decided. The whole purpose of the exercise is to share the blame.”
There is a lot of talk of performance reviews in India today, particularly in the information technology sector. Infosys has ranked 2,200 of its employees as underperformers. At Tata Consultancy Services (TCS), 1,300 underperforming employees will be laid off in the next few months. It’s not as though this hasn’t happened in earlier years, but the numbers were much lower.
Rao says there are some rules of performance measurement one must remember. The first, as already mentioned, is that it comes into its own only when things are looking grim.
Second, it tends to become more professional — or arcane — at such times. Basically, when you are handing out rewards, you stress the interpersonal factor. When you are talking about a voluntary salary cut, you blame the spreadsheet.
Third, is that performance measurement in good times deals with the highfliers. That’s when you hear of lavish bonuses. When times are bad, performance measurement shifts to the other end of the spectrum, to identify those who are “not up to the mark”.
There are other things one needs to remember. Performance measurement can be arbitrary. It may differ dramatically from company to company even when they are using the same metrics. “The HR department of a company adopts the cultural style of the CEO, particularly if he is an imposing personality,” says Rao. “You can be acceptable in one organisation, unacceptable in another.”
There have been attempts to introduce some system and discipline in this arena. With limited success. “Despite the increased usage and attention, many companies continue to struggle with defining and managing their performance measurement system,” says an article by Mercer, a global leader for HR and related financial advice, products and services.
“The performance measurement system must reflect each organisation’s unique industry dynamics, business strategy and management style,” it says.
The article lists “the seven deadly sins of performance measurement”. Two stand out —
* To be effective, the performance measures you use must be commonly accepted and well understood by everyone — immediately. No says the article; it is sometimes necessary to be complex.
* All senior executives should be rewarded using the same performance measurement programme. No, says the article; it is sometimes necessary to be different.
Confusion continues. It has clearly become necessary to evaluate how performance systems themselves are performing.
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