The appraisal season is almost over and most of us have received the results in our inboxes and paychecks by now. People who have been promoted or granted a reasonable raise this year might not agree but the rest [which means most of us] would concur that there’s something wrong with the traditional appraisal system followed by most MNCs in the service sector.
The system I am referring to is the one where your performance is appraised by your immediate supervisor by comparing the activities you did through the year to the objectives set by you at the beginning of the year. This appraisal is then laddered and moderated with other, similarly designated, employees of the organisation to make the judgement agnostic to your project or technology. The ratings thus obtained are then used to arrange the employees in a triangle, a sort of pyramid which puts the rare few achievers on the top and the larger set of underperforming employees at the bottom and the rest are crammed into the middle brackets in the order of their ratings.
The proponents of the system claim that it boosts productivity as it motivates the employees to compete. Without a ranking mechanism everybody would just bide their time and the company’s performance would come to a standstill. On the contrary, the system is not only principally incorrect, it also encourages practices which pull the organisation down. This system normally places a third or even lesser number of the employees in the top two rating brackets. In other words, every year, these organisations declare that two thirds, or a majority, of their employees are not good enough. So statistically speaking none of these companies are good enough, considering the performance levels of the people they employ. Customers, are you listening?
Why then are the employees rated as not-so-good retained? For two reasons: Firstly, most of these employees are actually pretty good and deliver as per the expectations. But then why are they ranked low? Well! Because, the simplest and honest [and disgusting to the core] answer is, someone has to be ranked low to maintain the triangle; limited seats on top. And secondly, the few who are genuinely non-performing are also important. Wait a minute!! Non-performers are important?! Yes!! The business of service is as much about quantity as it is about quality. The customers are charged for heads, not brains. So it doesn’t hurt carrying along a few laggards; the customers pay for them anyways.
But how do they manage to pull such atrocities in broad daylight? Well, this is where the wrong practices this system promotes come into picture. It is difficult to classify employees in multiple performance rating levels if the expectations from him are straightforward, objective and based purely on his performance in the work he has been assigned, the work he was actually hired for. SLAs, deadlines and escalations are easy to track and count. So, he is also assigned subjective goals like “value creation” and “people development”. Remember, it is impossible for an employee to do his job properly without implicitly creating value for the organization or developing the people around him, but those contributions cannot be pointed out. And the more tangible and countable acts of such kind are difficult to achieve because: 1. You are not assigned extra time to fulfill these goals. And hence, achieving them affects your routine work 2. You are not trained/equipped/interested enough. Some of us have taxing personal commitments which prevents us from “participating”. 3. Some of these tasks cannot be done on demand. You can’t write n papers or suggest some process improvement ideas every quarter; It happens when it happens.
This finally not only helps the managers to assign poor rankings to some employees who work hard and help the company earn customers, it also tricks these employees into believing that they deserve to be rated low, thus forcing them to either lose their confidence or gather a lot of stress and frustration, rendering the workplace significantly negative. But, the adoption of this system has an even worse result. Much like the evolution of species in nature, these practises have encouraged the growth of some specific type of employees who have adapted themselves to game the system. Every year, along with some really deserving candidates, these companies reward employees who have mastered one or more of these skills: 1. Feigning how difficult their work is, 2. Exaggerating the amount of work they are responsible for, 3. Not sharing knowledge with co-workers or 4. Doing everything other than the project work. This is the reason why you see some undeserving and incapable people around and at times even above you.
And that’s why, when I say “death by triangle”, I am not talking about rating related employee suicides or miserable employees, who are worse than living because they have lost their personal lives and other passions to a system which rates them incorrectly. I am talking about the eventual demise of the companies which are not acknowledging the problems of their appraisal system. But do we have a solution? Definitely. And it is drastically simple and effective. Firstly, follow a binary rating system, track only the parameters which directly govern the employee’s job description. This way at the end of the year the employee hears one of the two outcomes: 1. You’re doing your job well. Keep it up!! or 2. You’re not doing your job well enough. You got 2/3/n months to improve. Sack up!! And secondly, to promote value creation and development of people, recognize and reward all the other non-work related stuff, White papers, presentations, process improvement, participation in events, innovation, etc., on the spot. The employee who amazes you for making it so far and high on the corporate ladder, despite not possessing any employable skills whatsoever, will get easily weeded out with such a system.