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Inadequacy of traditional performance management systems

It is normal practice in Ghana for performance evaluation systems to be set up without appellate mechanisms – i.e. the ability of aggrieved employees to seek redress for disputed performance evaluation results. Performance evaluation processes are basically set up to achieve specific objectives including the measurement of the level of performance for each employee, determining the quantum of reward for high performing employees and assisting non performing employees to become better or penalizing continuous non-performance.

For the entire process to be successful, it is important for it to be open, transparent and fair. Beyond fairness, the process must be conclusive in that it should terminate or come to a necessary end at a point. So appellate systems, developed as a necessary component of performance evaluation systems ensure that employees who are not satisfied with their results as published are able to seek redress before a neutral and independent person or body for redress.

In an article published by the HR Daily Advisor on Wednesday October 12, 2016 shares a survey conducted by seeking to find out employees’ views on feedback on their performance. The results showed that 64%of employees surveyed said they wanted their supervisor to provide them with performance feedback every 2 weeks while 42% of millennials in the employees surveyed wanted weekly performance feedback.

Though such study has not been conducted in Ghana, I am sure the expectation of regular and frequent feedback from supervisors by employees on their performance on the job will not be too different from the results of the above survey results. Employees have and will always require feedback on their performance. However, the traditional performance management systems that measure performance once a year or at best twice a year may not be adequate to meet the expectations of employees for feedback.

In fact, some writers on performance Management systems have insisted that the current once or twice a year performance evaluation systems are not necessary and should be scrapped because what is needed in daily and more frequent performance measurements and feedback systems for employees. They argue that such daily feedback which is driven by target and goal driven work processes or jobs will ensure that feedback on performance is a constant part of employees’ work on a day to day basis. The conclusion may be that the current traditional systems of performance management may be inadequate to meet the objectives of a standard performance management system because the traditional designs currently lack frequent feedback mechanisms, they lack credible appellate systems, they lack a measurement of standard behaviour as guided by values of the organization etc.

 Explaining Performance Management:

Performance Management systems are basically designed to thoroughly monitor and evaluate the performance of each employee in an organization. It is in essence a Monitoring and Evaluation (M&E) system as well as a strategic planning tool for employee development. In the end, the performance management system seeks to resolve four pertinent productivity related challenges. Firstly, it is to determine the actual performance and hence productivity level of each employee. Secondly, it is to reward high performers as a motivational incentive and third, to assist and provide low performers opportunities to perform better. Then finally, it is to identify and selectively remove continuous non performing employees from employment procedurally. 

Performance management process outcomes also hint on two distinct issues. These are the issue of identifying high performers, developing them through succession planning and rewarding them for their contribution to the organization. The second distinctive issue is to monitor employee behaviour and aid employees to higher levels of acceptable behaviour or facilitate the selective termination of the employment of non-performing or underperforming employees in terms of behaviour and productivity. So in reality, performance management is an integrative process of getting the best out of every employee and further, getting rid of workers who are just tagging along.

Performance evaluation on the other hand is the evaluation tool and process used to measure the level of performance for each employee. In performance evaluation, employee performance is measured over a specific period of time referred to as the appraisal period.  The crux of the traditional evaluation process is that it is done only once or twice a year for many organizations and so may be inadequate for early detection of poor performance of an employee.

For example, if an employee works in a team driven environment, then the team effort and performance may overshadow individual employee weaknesses, flaws and underperformance. What the advocates of a new, revolved evaluation and frequent performance feedback process seek to drive is that employees need regular feedback on their performance and the once or twice yearly feedback provided by the traditional performance management systems are not adequate and actually adversely affect employee retention in some cases.

The Performance evaluation Process:

The performance evaluation process begins with goals or target setting. Contemporary techniques for achieving this suggest that both parties (the employee and supervisor) must necessarily dialogue or interact and amicably agree on the goals or targets. Goals or targets are the agreed standards of performance which is required of each employee.

It will be helpful to readers to discuss two basic methods of goal setting. The first is the top-bottom approach where goals are set from the highest levels of the organization and trickled down to the employee. This method is normally imposing because the employee hardly takes part in the process resulting in the lack of ownership of the specific goals. Normally, goals set under this approach may be set by the board or CEO and imposed on the entire workforce.

Another problem identified in the top to bottom approach of goal setting is that goals set by the top hierarchy of the organization may tend to conflict with the individual goals of the employee. And where there are conflicting goals, failure is mostly imminent. Under such circumstances, a conflict of interest is created which is referred to as conflict of professional/individual goals. When such a situation occurs, it is most likely that employees will choose to follow their personal interests leading to a reduction in productivity on the job.

The second approach to goal setting is the bottom-up approach which constitutes the setting of individual productivity goals and targets that are aggregated into corporate or organizational goals. Where this is well coordinated, it presents perhaps the most effective and successful outcomes. Employees normally own the process as they are fully involved. In the end, employees don’t only achieve the organizational goals, they also achieve their individual goals and objectives.

In practice however, the deficiencies of the top-bottom approach to goal setting and performance execution are mitigated by a robust reward system that motivates employees and seeks a middle ground to align organizational goals with individual expectations – at least all humans, including employees love to be rewarded for their achievements.

The goal setting stage sets the tone for the performance evaluation process. Embedded in the goal setting process is the pre-evaluation meeting. At this meeting, the employee and his/her appraiser (normally immediate supervisor) discuss and firm up the goals with the intention of finding the best way to achieve the goals or targets. For example, this is where the appraiser ensures that the specific needs and objectives of the individual employee are noted and dealt with prior to monitoring during the performance evaluation period. Then the processes and techniques for achieving the goals are also discussed and finalized. Again, challenges and threats that may hinder the realization of the goals are discussed and strategies adopted for overcoming the challenges.

Frequency of Performance evaluation

Employee evaluation during performance evaluation can be undertaken as many times as possible. However, as the process can be tedious and time consuming, it is important to plan the frequency of performance evaluation in ways that make it user friendly and cost effective.  The most prominent factor which should determine the number of times performance evaluation may be held should be dependent on the type and nature of a particular job. In areas of employment where deliverables are expected to be highly efficient, accurate and consistent, it is prudent to frequently evaluate such employees for early detection of any mishap.

Jobs such as Client Relations or Customer Care, Sales and Marketing, Public Relations, Security etc. are jobs where incompetence can have an immediate and devastating effect on the business. Frequent evaluation and performance evaluation are needed to ensure a consistency in performance. Hence, performance evaluation for such positions could be as many as twelve times in a year (monthly). For other positions where outcomes are less devastating in the short term of nonperformance, twice or three times a year may be adequate. For organizations that hold performance evaluation only once in a year across the board, I would say that is taking a very great risk.

During performance evaluation processes, various evaluation techniques are used. Prominent among these are the 1800 or 3600 performance evaluation methods. The degree of performance evaluation qualifies the number of stakeholders utilized in the performance evaluation. Four major stakeholders may be identified and these include the employee, colleagues, superiors (supervisors) and Customers or clients. Where all four stakeholders are involved in the performance evaluation process, it is known as a 360 degree performance evaluation.  

Post evaluation issues

As mentioned earlier, the performance evaluation process kick starts with the pre performance evaluation meeting, continues with monitoring during the performance evaluation period and finally ends with the employee performance evaluation itself. After the performance evaluation process, results are collated and processed.

One major activity during the post-performance evaluation period is the performance evaluation review meeting which is held between the employee and his/her supervisor (the appraiser). In this meeting, performance evaluation results and especially employee’s weaknesses are identified and discussed. The outcome of such a meeting may be recommendations for specific employee development interventions such as training in identified areas, counseling, coaching or even therapy. The therapy could be on psychological, fitness, health or other similar problem areas.

Another very important post performance evaluation issue is the appeals process. When employees are not satisfied with their results, they must be able to challenge or appeal against such results before a neutral person or body. The neutral person or body may be a select group mandated and empowered to investigate and determine the truth or otherwise of any employee complaint about performance evaluation results and give a binding determination or resolution on the matter. In some jurisdictions, such a neutral body could be an appointed consultant or a specialist consulting organization that assists the organization to maintain some fairness and neutrality over the performance evaluation process.

Employees can challenge the performance evaluation results because it is well within their rights to do so. However, if such an opportunity is not created by the organization, it may be difficult to do so. This is why it is important for every organization to secure fairness, transparency and openness of the performance evaluation process through a credible appellate system. Where employees are denied the right of appeal by the absence of such a structure, and hence denied the right to their earned remuneration as in pay for performance incentives (bonuses etc.), such denial can be regarded as an unfair labour practice under the Labour Act, 2003 (Act 651).   

To date, it can be clearly stated that most performance evaluation systems instituted and implemented by organizations in Ghana do not meet the ‘fair’ criteria as they lack a credible appellate system. There are consultants available to assist companies in setting up such performance evaluation appeals systems for a more credible, open and fair performance evaluation process.

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