Tuesday, April 23, 2013

How to reduce Subjective Rating in Performance Evaluations

Most companies use Feedback and Ratings from their employee performance appraisals to drive decisions around compensation, promotions and training, then ensuring consistency in their employee reviews is critical. Even if they’re not using performance evaluation data to make these decisions, employees need to perceive a sense of fairness in their reviews. A perceived lack of fairness quickly translates into employee dissatisfaction and disengagement.

Many companies use subjective performance appraisal systems due to lack of objective performance measures. In these cases, supervisors usually have to rate the performance of their subordinates, using such systems, it is a well established fact that many supervisors tend to assess the employees too good (leniency bias) and that the appraisals hardly vary across employees of a certain supervisor (centrality bias). We explain these two biases in a model with a supervisor, who has preferences for the utility of her inequality averse subordinates, and discuss determinants of the size of the biases. Extensions of the basic model include the role of supervisor’s favoritism of one particular agent and the endogenous effort choice of agents. Whether inequality averse agents exert higher efforts then purely self-oriented ones, depends on the size of effort costs and inequality aversion.

But how do you achieve fairness across the board, or even within a particular role, when so much of the evaluation is subjective?.

Since managers are individuals, and bring different experience and expectations to their role, it’s important to give them some guidance, and a framework to work within to eliminate some of their subjectivity from the equation. Here are some techniques we use with Clients, which has helped in reducing the Subjective Feedback from the PMS.

1.       Providing ongoing trainings to both Appraisee & Appraiser about the PMS

2.       Multi-rater feedback for if possible for all roles or at least critical roles in the company

3.       Secondary manager or third-party reviews

4.       Detailed behavioral descriptions of competency demonstration

5.       Creating a Dictionary of Subjective Ratings to choose from as part of the PMS tool

6.       Have Even Number Scale to reduce the Central Tendency Error

It’s also a great idea to have your HR team compare ratings between departments, especially for individuals performing the same function. It’s not hard to spot trends in ratings when you look at the bigger picture. In the same way you could tell how “tough” a teacher was by looking at their class average, you can get an idea of how consistent and fair your appraisals are by comparing scores between departments, and year over year. Your HR team can then intervene to ensure greater consistency and fairness.

Tuesday, February 05, 2013

Process Vs Results

Few days ago a cricketer who was worth a place in state junior team and hailed as one of the replacement for the Great Wall of Indian Cricket in Karnataka Cricket; was not able to make good scores off late came to me to talk about what’s going wrong with him.

The conversation is as follows.

Cricketer: While I am playing the way I have always done, but not being able to score more runs consistently. Do get to score 50s, 70s once in few months but not so much that I get to play 1st class cricket for the state.

Me: Hmm.. Sounds so familiar, tell me more about it, when was the last time you scored big, what all you did right and what you did a day before and after that.

Cricketer: Last time it was a 75 against a team which had good first class cricketers. Coming to think of it, I had good 2 days of nets and just before the match, it was good mental frame I was in. Post the match I thought I should do the same more often.

Me: It set me thinking, which I always believe in, that it is more of process and process which will result in better quality results. I call this: ‘IF YOU HAVE THE “RIGHT” PROCESS, “DESIRED” RESULTS ARE JUST A MATTER OF TIME.’

The more we started speaking, I was convinced that the guy realized more of his mistakes and talents (which to be fair with him was the right thing to do) and insights  on “practice” and “smart work”.

This brings me to the topic ‘is result alone matters or the process also has a role to play in getting the desired results time after time’

Taking cricket analogy as discussed with my international cricketer friend, The difference between 1st class cricketer to that of an average Joe on the road is the “repeatability of the process of shot making or bowling a line consistently over a period of time, of course coupled with talent and hard work..

If someone like Bret Lee is thundering at 150KMPH ball after ball and the batsmen is coming down the line and driving the ball towards “covers” or “extra covers” it’s not because of the talent alone but also because of the time spent at the nets making the whole process repeat ball after ball, day after day and year after year.

An organization where I consult, have a very good business which is showing double digit growth year on year while the markets struggle to do it. By their own admission, the product sells itself with very little or no marketing effort. (For USD 400 Million turnover their marketing budget is USD 2, 00,000 per annum).

However the organization has no process or any repeatable work culture. Since we have started putting process in place, what we found was with the same resources and effort, they could go to next levels of sales (Projected for this year in USD 600 Million), with proper process in place.

While not dwelling much in to the details of the case, I would like to bring in to perspective the thought while what matters are “results”, equally important is “Process” which produces the results

Tuesday, January 29, 2013

Talent Management Trends in 2013

The two challenges Organizations are facing today are the combination of growing markets (a need to expand globally or into new products and services) coupled with a need to hold back costs. While the economy is expanding, business executives remain afraid of committing large sums of cash to growth - a problem well documented in the business press.  What this has done is create a talent squeeze. Organizations are finding skills gaps, headcount gaps, and leadership gaps in their workforce which they must fill to grow - yet they do not have the resources to dramatically increase salaries to compete for labor. As a result, we are seeing a tremendous focus on sourcing and recruiting strategies, internal career development, and leadership development.

These problems are very business and organization-specific. In some cases the challenges involve a shortage of critical skills which create shortages in particular job roles. This takes the form of shortages of production engineers in the oil and gas industry, regional managers in the retail industry, nurses in the healthcare and insurance industries , or mid-level managers in manufacturing and most industries.

Human Capital is becoming increasingly important for organizations of all sizes and shapes across the world. The workforce is made of Gen Y and Gen Millennium at the entry& mid levels, who are more adept at technology than any others, who will be more than happy to spend time on internet learning new things than spend time in class rooms. The learnability is attaining different and new meanings. The retention of high potentials, increasing engagement, gender balance and equality, and age diversity will continue to dominate the happenings as it has always been, I feel 2013 will be marked by this increased phenomenon of people management, where technology plays a vital role.

1.       Employee- Led & Manager- Supported Career Planning: Organizations can explore deploying organic (viral) strategies which assess both the employees’ “needs” & their personal “offer” (skills, abilities, intangibles) against the “offer” & “needs” from their organization. While this assessment allows for an evaluation of employee-organization alignment and/or gaps, it serves a few more purposes, including increased communication, enhanced development planning, assessment of cultural and performance fit for achieving shared success.

2.       Increased Engagement Initiatives: The initiation of mindfulness at work to let managers deal with stress and anxiety more effectively. In other words, more attention to well-being at work; The growing focus on intercultural awareness and leveraging diversity to achieve individual, team and organizational goals. Companies are starting to recognize and harness diverse leadership approaches and perspectives.

3.       Talent Acquisition: The ability to search companies’ career pages and apply through smart phone will be a one to look out for. I also think more companies will be investing in their employee value proposition for 2013, followed by making sure they are working through internal barriers for hiring top talent. Customer relationship management tools to build future talent pipelines will still remain hot. But I believe more companies will start to invest in SEO strategies to attract top talent.
4.       Talent Management is a Business Problem, not an HR Problem : I feel there is a critical need to understand that talent management is not an "HR process " but rather a "business process" which must be implemented through line of business executive leadership. Talent management strategies, should be developed in the context of your particular business strategy.