Performance appraisal is round the corner and I was really trying hard to analyze what kind of appraisal system would work best in the interest of the organization as well as the employees.
Then I looked for some inspiration in nature. (Haven’t cracked it still though!)
In nature, all species have unique characteristics which help them survive. For example, in a herd of gazelles- some may be faster, more agile or blessed with sharper eyesight than others. We will call them ‘stars. ‘Stars’ are the ones responsible for pack protection and gathering of more resources. Consecutively, they lead and have access to more resources in comparison to other members. But to function well, ‘stars’ need the support and cooperation of other members of the herd else the herd will disintegrate. So, to maintain their positions, ‘stars’ ensure that other members get sufficient resources resulting in overall success and survival of the group.
Similarly, in the workplace, all employees have unique skills and abilities critical to the success of the organization. High performers play a greater role in achieving business objectives and driving the success of the organization through consistent display of skills and achievement of excellent results. Therefore, they ought to be rewarded accordingly to continue motivating them. However, recognizing and rewarding high performers while maintaining a fair and objective evaluation process can be challenging. Simply giving all the attention and resources to high performers will create a demotivating and hyper-competitive work environment that may disengage other employees and prove deleterious to the organization’s success. Work cannot be accomplished without collaboration of employees and even high performers count on the support of their team members to function and excel.
Therefore, organizations need to carefully balance differentiation with fairness. Things that need to be focused on:
· Adopt an evaluation system where individuals are measured against their goals rather than relative ranking. Performance pay should be linked to the individual’s goals vs achievement. However, the promotion could be linked to a relative ranking to continue incentivization.
· Maintain objectivity and transparency throughout the appraisal process with proper channels for feedback and dialogue. Enabling transparency ensures that employees understand the criteria for evaluation and trust the process.
· Use multiple evaluators to avoid biases. While largely the scorecard should have SMART goals, the remaining subjective feedback should not be taken from a single source, rather a larger source- peers, manager, subordinates, clients etc. Focus on results and behaviors rather than personality and subjective factors.
· Ensure consistency in appraisal mechanism across all job roles and employees to ensure fairness.
In conclusion, I haven’t been able to zero in on the one right kind of appraisal system that guarantees a scenario where everyone is happy. (‘happiness’ itself is subjective and relative term) But we have established that the appraisal method has a direct impact on organization’s success.
By adopting some of the suggested principles in our appraisal system, all we can try to do is to make this critical process- fair and objective that continue to rewards performers while encouraging employee engagement, loyalty, and satisfaction for the larger organization. So differentiation needs to be achieved with implementation of objectivity.