Article (January-2021)


Providing feedback- the core of PMS needs to be taken seriously

Shrikant Lonikar

Designation : -   Director and CHRO

Organization : -  Pernod Ricard for Gulf, SAARC Region and India, Gurugram


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How do you see the PMS landscape across organisations and define the new fronts of Performance management that may open up post Covid?

SL PMS is a business process managing and assessing contributions of people. It is wrongly considered as HR Process. HR only owns the process. It is implemented and used by employees and people managers. Since the ways of working (WoW) have changed at this time, it is logical to consider appropriate changes in PMS. Though the scope, objective and process steps may not change significantly, the way of PMS administration needs to change in line with the change in WoW. It is expected that the reporting and measurement of performance will become sharper and remote assessment and appraisal discussion may lead to lowering of emotions involved in classical face to face reviews.

Will it be appropriate time to rethink about conventional metrics HR consider for performance management system? If yes, what changes should be required?

SL PMS measures quantitative and qualitative performance. Most PMS also cover competencies/behaviors and values. It is likely that the quantitative part will be more easily compared with the other two. Organizations are yet to define clearly competencies that matter in the new WoW. Until those are clarified, and managers and employees are trained, there will be some difference of opinion between managers and employees on how those are assessed. This is a potential area of employee disengagement that leaders and HR should be aware of.

What can be risk and opportunities in refining PMS post COVID?

SL As mentioned above, what is expected in the 'how' part of performance will take time to be clarified. This is a big risk. Also, managing remotely is a competency that managers must be trained in. Until then, there will be a noise during performance period as well as during measurement process. Managers will also have to find ways to compensate for missing human touch. Else, it will be a highly transactional process. Organizations will have to communicate how the culture and values are remodeled in new WoW. Assessing employees on those parameters without providing this clarity may lead to frustration. The big opportunity is in the goal setting area, which is the foundation of any PMS. In new WoW, it will be important to define clear goals for each employee with SMART criteria.

Keeping in mind the WFH model and remote working that has emerged in a significant way, what new metrics should be included while refining new PMS strategies so that remote/WFH workforce are not discriminated?

SL WFH offers a very important opportunity to address the quintessential challenge of differentiation. Principle of distributing ratings and rewards on basis of equity should be established as against tendency to use equality principle. Once clear goals are set, managers will know who has contributed how much to overall value of the organization. If there is a way to be transparent about this, employees will be open to accept the differentiation.

When many organizations have resorted to pay cuts and reduction in head counts and employees financial standing have taken a hit, how organizations will meet this challenge of setting employees expectations about assessment and compensation through PMS?

SL This is a very sensitive aspect. Employers should be clear about short term and long term impact of pandemic on their businesses. Pay cut and layoffs should not be used for short term impact. It will be the people in organization who will help companies to recover faster if they are taken care of during crisis. Employees should not be considered as a cost or should not be treated as a number. Companies need emotional psychological commitment of employees in the forms of passion, commitment, willingness to go extra mile, and some also expect loyalty. These are not easy to get. A caring culture is needed to attract such psychological connect of employees. Also, when companies go to market in recovery phase to attract talent, candidates will surely check how the company treated existing employees during crisis and may decide whether to join a company or not. This is a bout reputation and credibility; not about cost and numbers. This is also about business interest and not about compassion and empathy alone.

How Performance management and reward strategies should be streamlined post COVID and which performance metrics will determine compensation?

SL I do not think performance metrics will change significantly in new WoW. Unless the organization chooses to change its core (business philosophy, operating model, ways of delivering to customers, use of technology, etc.), significantly, metrics will be similar to the earlier ones in areas of quantitative goals, qualitative goals, competencies, potential and values. Weightages may change to some extent, e.g. measurable contribution may carry more weightage. It is likely that there will be iterations over next 2-3 years to match the changed business and Wow scenario. I expect there will be aggressive differentiation in compensation and the share of variable component will increase considerably over next few years for employees across levels. This will be a beneficial change for employees as they will be able to make more by contributing more. Since several new models of employment like gig workers, part time workers, etc., may become prominent, compensation strategies will have to be redesigned with precision and customization.

What kind of discussion should be preferred between the assesse and the assessor while measuring performance post COVID?

SL Providing feedback is a core aspect of PMS and sadly, not taken so seriously. Companies should develop mechanisms in new WoW to create multiple opportunities for feedback discussions between manager and employees, a monthly or quarterly frequency, though could be informal and not fully structured. Such dialogues will make the PMS process friendlier and will help in improving performance of employees. There will be no year-end surprises and no need to justify ratings and rewards.

What challenges organizations and HR in specific may face while refining the PMS post COVID and to how to address them?

SL Any change is difficult. Conventional PMS, as much as people do not like it, cannot be easily changed or replaced. It confuses everyone and takes time for all stakeholders to understand the new PMS. Incidentally, the change we are facing due to the pandemic is so big; a change in PMS process will be more acceptable as a part of new Wow. The change should be apt, relevant and more focus on stakeholders. Communication is the key. Each employee and manager should be covered in communication so that everyone has same understanding of the PMS and decisions coming out of it. HR should lead this process proactively.