HUMAN CAPITAL

Employee revue

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Performance reviews are normally an annual process where managers evaluate the performance and contributions their employees make to the team and the company. This system in itself has been proven challenging, and sometimes counter-productive if not downright unfair.

A battle for many HR business partners on how to ensure that the performance review process is firstly actually done, and secondly, that it is done correctly, have been challenged lately with many companies such as GM, Microsoft, Deloitte and others, opting to kill this process.

According to the Corporate Executive Board (CEB), a management research group, surveys have found that 95% of managers are dissatisfied with their PM systems, and 90% of HR heads believe they do not yield accurate information. The performance management systems in many companies are cumbersome and complex, many viewing it as counter productive. The problem remains however—how do you identify the high performers from those simply not contributing or bringing their side?

There are at least two basic problems with performance reviews. Firstly, evaluating people using numerical ratings or ranking generates the ‘fight or flight’ response in the human brain that impairs judgment. This neural response is the same type as an imminent physical threat. The mind and body immediately
responds with rapid reaction and aggressive movement, ready to fight, or retreats into flight mode or disengages from the company or workplace. In the context of neuroscience, it is because performance reviews are based on a fundamental misunderstanding of human responses, triggering social threats and rewards, like one’s sense of status or fairness, to activate intense reaction networks in the brain. As revealed in recurring patterns of mental activity, the response to receiving or perceiving that you receive a “one-to-five rating” or evaluating employees on a ‘performance curve,’ also known as the ‘forced ranking’ approach, is thus the same as being attacked.

Numerical performance management systems do not take into account how work gets done today. Goals are set in short spans - much less than the old ’12-month’ cycles, especially as many knowledge workers are working in project teams, and many are involved in multiple teams that often are spread around the world, working in a virtual environment.

Few direct line managers accurately know their team members’ performance when that employee is involved in many other teams. In short, standard performance reviews, delivered once a year, are just not relevant for most jobs today. At the 2015 Annual NeuroLeadership Summit in New York held November 2015, the audience were asked whose companies had given up ratings, and a few raised their hands. When asked, “Who wishes you could get rid of appraisals?” most hands shot up. No longer defining performance by a single number, the early adopters of the new methods of performance management, are emphasising ongoing, quality conversations between managers and their teams. These companies use technology to assist in the process, finding that employees and managers are open to being prompted via text message systems on what type of questions or conversations to have. As these conversations become part of the culture of the organisation, it is driven from both the top-down and the bottom-up. Do not misunderstand.

These are companies who are still faced with the same problems to manage their workforce and understand that not all employees are equal. The focus of performance conversations (from assessment, to goals, growth and development) and the frequency of performance dialogues (from once a year, to constant and ongoing), as needed—quarterly conversations, or even weekly.

Not only performance reviews have come under fire. Companies also use these new methods to get managers to talk to employees about their development more than once a year. Millennials in particular crave learning and career growth. More frequent communication helps with employee engagement, development, and ultimately, better reward and remuneration, as managers better understand how their people are doing and what drive them. They are still differentiating performance in various ways, and still using a pay-for-performance approach, just not through a simple rating system.

Dr Reuphillan Kasselman

(Credit: HR Voice; the official Newsletter of the South African Board of People Practices)

 

Author profile

Dr Reuphillan Kasselman (PhD: Organisational Behaviour) is a seasoned executive with multidisciplinary experience in all aspects of strategic and operational
disciplines with specialised expertise in strategy, HR, leadership, and business optimisation. She has a history of executing large-scale management initiatives to ensure sustainable organisational success. She is the founding member of Forte Advisory Services and is also a part-time lecturer for the Executive MBA
Programme at Walden University, as well as Supervisor for the MBL programme at Unisa Business School. She is currently doing research in Neuroleadership for a second Doctorate in Business Leadership (DBL) at Unisa.

 

 

 

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