How to get your Performance Management System to deliver what it’s supposed to?

It’s that time of the year again but Richa has still not uploaded her self-appraisal sheet. She is shuffling through her email chains and local drives to remind herself of the work she has done in the last 6 months.

Since the time she joined the organization, about a year now, things have been pretty adhoc. She was hired as a Marketing Trainee, but she also filled in for content writer, ad-hoc graphic designer, and inside sales personnel, from time-to-time.

So, now that her work is going to be assessed for her career progression, she is confused about how and where to begin.

Abhishek’s (her manager) sneaky reminders of what all she has not been able to do as part of her core role, don’t help.

All of it is adding up to demotivate Richa, as her first performance review goes for a toss.

Performance Management System (PMS) is one of the many significant tools to build and influence an organization’s growth. If done well, it can do wonders for individual and team development, employee engagement, business success, and most importantly, for overall organization culture. But if there are loose strings that are not paid attention to, PMS can be detrimental to the psyche of an employee and the health of an organization.

Let me put it this way – Many performance management systems fail because they are designed to fail.

To understand why PMS fails, let’s get some basic understanding right.

What is PMS?

I am not going into the technicalities here. But one must understand that PMS is not an event like annual performance reviews.

It’s a process, a system that is meant to enable performance in people across the enterprise.

This includes establishing future aspirations, setting, and tracking goals, and defining corrective mechanisms.

Is PMS important? Why or why not?

The biggest myth about PMS is that ‘an organization can run without it, as was announced by an MNC a few years ago. No company can do without a robust PMS – which by the way, is not as simple to build as it seems. But interestingly, a robust PMS makes things simple. Played with the words there😉

Imagine you are on a cricket ground, but you don’t know how many runs you need to make to win. You aren’t aware if you have to bat, bowl or field. You are not sure what parameters you are being evaluated on. Now imagine you are the owner of a cricket team. But you don’t know how many matches you expect your team to win. You are not sure which player is best at what role.

The whole game is futile, right?

It’s absolutely the same with organizations. A business exists to achieve something, to create impact, to grow the economy and community. If they don’t clearly define and communicate their goals and align them with individual and team goals, systems will go haywire and no one will come out as a winner.  

Having a system that tells us what our goalposts are, how we can achieve them, what happens when we achieve them, and what do we do when we don’t, is very crucial for growth. And that’s why PMS is not just important, it’s necessary.

Fads and realities of PMS 

1. A good start is a job half done. 🌟 Back in Beroe, we invested 5 days straight to define organizational priorities and the next two days to define individual priorities. We did this exercise every 6 months. And it took us 4-5 cycles to get to a point from where we could just go with the flow. If you feel that your PMS is cumbersome, in all probability it’s because of an unclear direction & end-results and not because there is a flaw in the concept of PMS!
2. Monetary benefits are ‘just one of the million things that PMS holds within. Without diluting the significance of monetary benefits, I would emphasize the fact that it’s not just about that. It’s about capturing and inculcating the feeling of pride in performance. Are they proud of what they are doing? Do they believe in the overall purpose of the company? Are they excited enough to work towards that purpose? An effective PMS factors-in the pride quotient of an employee.
3. A successful PMS is as flexible as an organization's priorities. PMS is meant to align with the changing business priorities. A good PMS is defined by its simplicity and flexibility to adapt to changes in the external environment. We need to make the frameworks as simple to understand, follow and update, as possible. If you look at it, the metrics of success don't really change. It’s only the ‘what-you-do’ that gets impacted. When designing PMS, keep the scope for changes in the ‘what-to-do’s’ section.

How can we prevent PMS from failing?

• Clearly define common goals for teams and organization. Ensure that goals are communicated clearly and effectively to everyone in the system. Every individual must know what they are expected to do and what they are being evaluated on. (Richa didn’t have clear goals that she could map her work to)
• Maintain objectivity in conversations. Conversations are indeed one of the most productive tools to practise and propagate PMS. But our own biases may influence the quality of outcomes.
• 🌟 Question yourself- are you pushing the right buttons in your people? Have you gotten your teams excited about what you want them to achieve? In Beroe, we encouraged engineers to write white papers and speak at leadership platforms, by associating credit points to every thought leadership activity, across all hierarchical levels. This not only motivated them but also instilled a sense of purpose and pride.
• 🌟 Make sure to measure success on the pre-defined parameters. Promises should lead to actions. Following up on the above example, we made sure that each individual’s performance, irrespective of their designation, was evaluated on the set and communicated parameters around thought leadership.
• Identify the right set of people to execute PMS within the organization. (Abhishek didn’t know the real essence of PMS, so he chose to use it as a weapon against non-performance)
• 🌟 Keep it simple. Complicated excel-sheets drive fear in people. Create simple, intuitive formats that are easy to get hands-on.
• Be patient. Do not rush into making changes because you don’t see immediate results. It takes time. But make sure to note and address grievances/queries.
• 🌟 Do not wait for a year to review the goals and the impact of a PMS. If need be, make adjustments in view of the changing business priorities. (Richa was always out of the communication-loop as her role changed from time to time with changing priorities.)

I will end this piece by sticking my neck out to say that no other people process/practice has as far-reaching an impact on an organization culture as a well-managed Performance Management System has - more on it in my next newsletter later this month.