Performance Management- Just Carrot & Stick or Something More

Published by MBA Skool Team, Published on February 05, 2016

The day when performance rating gets disclosed to employees, there is typical behaviour observed. Everybody wants to check their own ratings without somebody else knowing it. At the same time the person tries to spy on other’s system to know other’s rating. As the day progress, somebody initiate the topic and small cartel gets formed. This cartel then asks every other team member to login into system and show the ratings.

As this week passes further, somebody asks his reporting manager to come out in corridor or we hear shouting inside project manager’s cabin.

This is the common scene in almost every IT/ITes company for some years now.

Do the Appraisal and other systems serve the purpose of what they are meant for? At least from this situation it is no way heading towards it.

Image: pixabay

Now let’s compare this with our childhood experience. When do we used to get Grades (Read Rating here) in our childhood? Probably in Kindergarten. This is much before the time we felled in love with concept of percentages. In kindergarten we don’t even understand all these jargons.

Along with the grade in kindergarten we get something more important in context of appraisal. We get remarks like “Can do better!”, “Is capable of more… “& so on. We all have received this and have progressed on it without parents reacting to it like we do with our appraisal ratings.

Why we change our response to a similar situation, when we become ‘Adult’?

Fundamental Causes of failure of Performance Management system (PMS):

PMS as a system has failed to create the impact that our kindergarten scorecard has created for us. We never viewed our kindergarten scorecard as something bad happened to us. We took that as our developmental need and worked upon it. Also our teachers gave us the hope that we can improve.

1. PMS force fits all on the same scale.

Even in Physics, we have different scale for different dimensions. Kindergarten also has different activities to rate upon. Hence as system the HR fraternity should understand that there may be different scale within the given context where so called ‘Low Performer ‘may become top performer.

2. Every egg may not get hatched at exact time of performance appraisal.

Every individual has different time to react to situation, to comprehend it and to respond to it. System has to be aware of this fact and need to create necessary ‘systematic’ changes. Every individual has different time to unfold.

3. Each baby step is ‘milestone’ in itself and must be rewarded.

We celebrate the moment when small child first time stand on his feet. Similarly when every employee develops in small amount in any area it should be encouraged in performance management system. This small development will serve two purpose for the organisation. Firstly it will act as positive signal for his efforts towards improvements. Second it will contribute as retaination measure for the company.

4. PMS should be system of Developmental approaches

Every feedback given in terms of developmental need or as a learning will be taken more seriously than the performance management ratings per se. Performance appraisal discussion should be more of developmental discussion rather than ‘fault finding and defending exercise’ of the two parties for each other.

5. Stop treating performance management as biannual exercise but part of daily/ weekly exercises.

PMS needs to be taken as something that is part of daily practise and not as biannual activity like insurance policy premium payment. Treating performance management as regular activity rather than a ‘premium’ payment of some performance management ‘policy’.

When the industry buzz is that companies like Accenture, Deloitte are moving away from the Bell Curve, looking to basics is a necessity now.

As part of systematic change, performance management should be developmental exercise rather than variable pay allocation system. Bringing this systematic and percetional change is the real challenge .It completely possible. Also in this effort we must not make performance management system a Rationing system (public distribution system of government).This balance should must always be kept in mind but currently we need to move away from the harsh rigid system.

This article has been authored by Shimpi Ganesh from IIM Ranchi


1. T.V. Rao (2016). Performance Management: Towards Organizational Excellence New Delhi: SAGE Publications India Pvt Ltd. 2e

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