Moving towards data based Performance Evaluation

The financial quarter which is of utmost importance to employees (Indian) is the last quarter (Jan-March), not because it’s a new beginning of another bright year, but because it is the Performance Evaluation quarter. We all agree that the process of Performance evaluation can never black or white, but it does bear significant amount of colour grey (loophole, concern, so forth). What causes this process to be an area of concern may be too broad with a host of factors contributing, but two factors which are major (in my view) are firstly, bias arising out of the perceived performance of the individual being assessed and secondly the vagueness in the minds of both the assessor and assesse as to what all major and minor activities they have been involved in during the course of the assessment year for which they are being evaluated.

The general perception is that performance rating can never be completely objective and that a little amount of subjectivity does settle in. Agreed, it cannot be as pure as it has to be, because of the above mentioned reasons as well as that by the end of the year, it’s the relative performance which is rewarded and not absolute performance. Despite all the vagueness and opacity the evaluation process bears, we can through our efforts try to make it more clear and transparent. In this discussion I will deliberate in detail about the two major factors as mentioned by me.

The duration of the performance cycle is 12 months as we are aware of. During the course of these 12 months, goals are identified (which are generally very broad) and the same are reviewed half yearly and evaluated at the end of the year. Typically an individual is set 4-5 goals every year with targets identified. The whole year is as smooth as possible, but when it comes to evaluation, the hurdles prop out. And evaluation being the end of the year, leaves a lasting impression about the whole process as such. A Hewitt study conducted on the priorities of working employees have shown that the priorities of Indian employees have been unchanged over two decades as salary still remains the top most priority. So any process which directly or indirectly affects our salary will be regarded high in the minds of the employee (logically). 

But when performance evaluation is not as transparent as an employee expects, then it may prove to be a trouble in gaining loyalty out of the employee to the process and also towards the evaluators. Seeing the performance evaluation from a naked eye, it has impact on the following aspects of work environment:

•    The evaluation process is a process of recognition; and recognizing an employee correctly has a positive influence on him and his future behaviour towards the company.
•  The evaluation process being linked to monetary rewards is regarded crucial for an employee, on a humorous note, if we HR have to ignore our other areas like recruitment, talent management, etc. and solely focus on making the performance evaluation more data driven, then in all possibility an employee will cry lesser than now.
• The evaluation process has its roots in growth of an employee; so by not having a fair evaluation system,  leaves an impression that an employee’s growth is impeding, tending to increase his/her frustration.

The 3 points mentioned above are of utmost importance to an employee as the process involves recognition, pay and growth of an employee.

To minimize most of the grey area of performance evaluation; being informed about employee’s performance is a must and necessary criteria. It removes the element of perceived performance. And secondly being informed about one’s performance removes the vagueness in the minds of the assessor and assesse too about what all key activities the employee has been involved during the course of the year that are directly or indirectly related to the deliverables in the performance contract.

These grey areas can be removed if an employee is made to take accountability of his of performance. An employee since the beginning of the year should maintain a log of his key activities he has been involved in. As against this log, the employee should also note down which deliverable of the performance contact is benefited by such an activity. This way, by maintaining a log book of ones’ own performance, one can not only be informed about his own performance but also ensure that his assessor is informed about it, but sending him quarterly reports of the log book.

When I discussed this idea with my colleagues of having a log book as a tool to draw in more accountability and visibility of an employee’s performance, I even put them with the idea that against every key activity the assessor should rate the employee instantly against that particular activity as this would help in recognizing the employee on the spot as well as the true performance. Once rated (probably on a scale of 5) against each activity for the whole year, the average of the ratings could be used as the annual performance rating. The philosophy on which I based this opinion of mine was on the fact that performance assessment should be a continuous process and not just at the year end. This way it could foster accountability and even consider some of the high performance months or low performance months of an employee which actually get counted in the main performance evaluation. But my colleagues turned down this opinion of employee being rated every month on three reasons:

•   Rating without a discussion can be futile as the assessor may not have a concrete view of how well the key activity of the employee cascaded into organizational effectiveness.
• Assuming that an assessor has to assess large number of employees every month this way, then considerable amount of time will be spent in the same every month which is not advisable.
• A panel should be present while evaluating the performance of an employee as just one person assessing the performance could have biases again.

Agreed that the issues raised by my colleagues are very important, but the critical issue of what kind of performance is evaluated would be addressed. By the above suggested method we are able to better the existing process via four way

• True performance would be measured
• Performance is evaluated timely as a result of which no key activity would be missed out during the final evaluation.
• Key activities which employees engage in will have a goal based approach i.e., the deliverables on the performance contract.
• And many other personal satisfaction benefits of employees such as instant recognition trust in the performance management process, etc.

Example:

An employee is involved in some very critical activity which is not directly linked to the performance contract. Then chances are that the employee’s contribution to that critical activity may go unnoticed during the final evaluation. But in case we have a log book kind of system, wherein an employee is free to log into the system and update his key activities timely then not only will he remember his key activities which he had been a part of that year but also he will be able to better explain his position during the performance discussion.

This way the PMS process can be bettered via this small alteration in the process by maintaining a log book, and converging the key activities in the log book into the prior set goals on performance contracts, which will help assess an individual in a fair manner as compared to now. It would also give the employee a good tool to advocate his own performance with proof.