Tips for a Solid Performance Review System

 

It will soon be that time of the year when employees start gossiping on the hikes their colleagues are expecting this year.

Yes, the much awaited performance review process gets started in many of the organizations in the month of April & May, and the HR folks will have their hands full to carry out this activity smoothly.

Although, this task has a strategic impact on the organization, it is not perceived in the similar way for the employees. They dread these review processes and often the reason behind that is the inaccuracy in the process, biasness, etc. This confusion leads to frustration and decreased productivity in many of them.

Today, many companies are reinventing their performance review processes in a manner which can contribute to increase in employee productivity and also improves overall morale of the organization. The people of Human Resources have transformed from a mere administrative role to a more strategic role which can be influential in leading the organization ahead. If this potential is utilized efficiently, this can upgrade the organization culture from bottom to top.

It has been noted in recent trends, employees have started putting a lot of value on the organization culture along with the compensation offered to her / him. Gone are the times when CTC alone attracted good talent.

During my recent discussions with some senior HR folks, I came to understand few check points which they try to avoid to create a solid performance review system.

1. In absence of continuous feedback system, many managers do not measure the performance regularly or provide feedbacks. When the review starts, they are unable to remember the earlier part of this performance period and weigh the recent events heavily. The Recency effect leads to inaccurate visibility in the employee performance.
2. The Halo effect has been known to tilt the outcome since long. Instead of gauging the performance for the complete period, the manager rates the employee based on the high or lows in their area.
3. Managers often lack the confidence to defend their rating or provide remarks on the employee's performance. This behavior leads to same rating across the group. They may be lenient and give high rating, or they maybe severe and give poor rating or in the worst case they may consider everything is fine and give medium rating to everyone.

It has to be understood that performance review is not a cumbersome activity either for manager or for HR. It is an essential part in fostering an employee's growth and driving a successful business.

People and their behavior are what deliver results to your organization. Not systems, not processes, not computers, not machines.