One of the reasons for this is ineffective communication. Once the employees’ performance review against set goals is completed, the measurements and relevant feedback needs to be shared with the employees in a transparent manner so that there is a scope for improvement in the future. Instead of an annual performance review, feedback should be given on a monthly basis. At the same time, negative feedback should not be delayed but delivered simultaneously. Withholding such information leads to distrust and lowers confidence.
Often poor measurement metrics are developed and while goals are set, no relevant measure is put in place. Performance metrics should be chosen keeping in mind the company structure. Irrelevant mapping can result in distorted results. Also, care should be taken while analyzing the data as any error can disrupt the functioning of the program. Similarly, the old system of keeping scorecards on employees for targets achieved has to go as it has no relevance in the current scenario.
Performance management system also lacks alignment between individual performance, departmental performance and organizational goals. The gap between companies’ strategic planning and performance review is also a challenge. Strategic planning focuses more on the process and implementation while almost no thought is given towards the employees’ performance and development planning. Organizations need to adjust their goal setting and planning after assessing the employees’ performance.
Adopting performance management as part of the company policies is critical for both the employees and the management. Often, it is not taken seriously by the employees which results in misplaced expectations by the management. Lack of commitment by the management also impacts the delivery of an effective performance management system.
Employee engagement also plays a pivotal role in performance management. The year round process should be conversational and timely and employees should be able to solicit information and feedback from anyone in the hierarchy, making the interface more open. Activities such as team lunch, family days, birthday celebrations, competitions and motivational emails are some of the other ways in which employee engagement can be fostered. Incentivizing top performers without penalizing non-performers can be another way to ensure full employee co-operation. Rewards could be in form of public acknowledgement, financial inducement, educational break, promotion or even a vacation.
In case of India, there is an urgent need to reduce the element of favoritism and biasness during the performance review. Issues like these should be addressed before it puts a dent on employee morale and compromises the performance completely.