Article (January-2021)

Articles

To bolster performance management, focus on short term assessment parameters

Niharika Mohan

Designation : -   CHRO

Organization : -  Luminous Power Technologies

01-Jan-2021

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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?

NM It's been more than nine months into the pandemic with both organisations and employees navigating through the blurred boundaries of work and home. With this limited experience of adapting to the 'New Normal', organisations are redefining their performance management systems to efficiently steer through these overlapped boundaries and appropriately measure the performance of their employees. Employees on the other hand are stepping up, stretching their working hours to achieve organizational goals and investing more time to help them speed-up their recovery process and switch on the lights again.

These changed business dynamics have made organisations rethink and reimagine new ways of measuring performance. The traditional measurements may not work, especially since the business landscape has led the organisations be in a constant state of beta. Hence, a performance system which takes into consideration these changing constructs and is based on the philosophy of constructive feedback valuing both the results and the effort, may be the need of the hour.

At this juncture, recalibrating key performance indicators (KPIs) would be important to ensure that telecommuting actually works and gets evaluated accordingly,and a key factor here is trust and transparency. Without these two, remote work monitoring may appear intrusive and exploitative. This means that companies may need to rehaul their data-driven dashboards to a system which inspires people and also measure outcomes, effectively. Even soft skills need to be evaluated; hence measurement needs to have a qualitative element to it.

Post Covid, key focus area would be performance-centric compensation, restructuring and managing cost optimization which plays a decisive role in the long-term survival of the business.

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

NM The global pandemic has made us realise that legacy metrics are insufficient for assessing work-from-home performance. In current scenario, employees are contributing beyond their scope of work and are going above and beyond to help their team-mates and communities at large. While the pandemic continues to impact everyone's lives, it is enduring to see the resilience of employee's spirit and their ability to balance work-life, and rally together for each other.

Therefore, it puts bigger responsibility on the organisation to also evolve the performance measurement process. Conventional metrics are more aligned towards achieving organizational objectives and are outcome based and may not cater to the softer elements, the behaviours that are so critical to exhibit in these challenging times. A measurement system which is all encompassing and holistic which also values behaviours like agility, decision making , empathy (to name a few), needs to be introduced to take care of softer human aspects.

Collaboration and functional performance are two other very important parameters which would help an organisation to promote collaborative culture and achieve organizational objectives with effective resource optimisation. It is equally important to recognise employee's ability to adapt willingly to a new skill and efficiently play a new role to achieve short-term and long-term business goals of an organisation.

While organisation link employee goals to business priorities very robustly, the leaders also need to maintain a strong element of flexibility and keep the communication flow open with their teams. Managers need to have a regular and frequent conversations with their employees to focus on improvement and development areas for a strong performance management system. Set priorities jointly and simplify the processes to achieve them in this uncertain business environment. Annual goal setting now is becoming more and more irrelevant given the pace of change.

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

NM Organisations are at an inflection point and how they re-define their measurement strategy will define their success in the days to come.The current COVID-19 situation has re-emphasised the need to redefine the feedback process and this is an opportunity.

To bolster performance management the organisations should focus on short term assessment parameters for employees and communicate them with transparency. Ultimately, people must be able to see that their contributions in these tough times are being recognized, equitably. Thus, simple methods to collect key feedback reflect on key achievements and a dialogue on the behaviour exhibited would be the desirable way forward. In my mind, in these challenging and uncertain times, simplicity may just be the answer.

Risks are high anyways in this virtual world - with the basic premise itself being based on trust. Over-monitoring and getting disconnected are real issues and cannot be wished away. The organisation culture will determine and define the outcome as well.

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?

NM Future of workplace will have a distributed and diversified workforce - some working from home or remote locations and some on the field, essentially a hybrid model. Therefore a performance management system which is agile, intuitive and keeps flexibility at its core to enhance performance will be critical.

On one hand, technology will play a crucial role to augment this virtual work culture on the other hand there will be this inherent need to connect more and to establish deeper and meaningful relations between the employee and the manager. For this arrangement to succeed trust and transparency would be paramount to embed in the company culture and the system of measurement has to be more outcome based.

The new metrics will need to address both the 'What' and the 'How' aspects of performance. Staying true to the short term outcomes is important - however a little more emphasis on the effort made to achieve these outcomes will also be needed.

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?

NM In light of current COVID situation where overall business performance got negatively impacted, organizations are making effort to adjust the parameters which trigger employee's pay raise and other pay-outs. Parameters like performance ratings percentage, reducing threshold performance for payout or doing away with bell curve etc. which has direct or indirect impact on deciding how much increment an employee would get or how much bonus payout will get disbursed etc. are getting adjusted significantly to cover up the financial losses employee has already suffered. Organisations are re-working their metrics to ensure they reward the employees appropriately and fairly.

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

NM This crisis has demonstrated the need for businesses to be much more transparent about rewards, especially when the situation is so unprecedented. If any temporary incentive plan is being called off or pay cut is being planned, it's better to be transparent about all the decisions the Company has made given the present scenario.

Going forward, there will be a need to do a cost benefit analysis of all the offerings to ensure it's aligned with current needs of the employee and the organisation. Future would hold more variability in the compensation structures and pay will be based on skill and role criticality. An important component of the Reward strategy would be the Recognition systems which Appreciate both individual and team work for overall engagement.

Covid has taught us that meeting Maslow's basic need of physiological and safety need is what is of relevance to us these days. Hence, a rewards portfolio which blends employee benefits especially around insurance for self and family, facilitating and providing infrastructure support to enable work from home and keeps wellbeing at its heart will be the differentiator. I also strongly feel that contributing to a larger cause, community service will gain momentum in the days to come.

Deciding on metrics to evaluate employee's performance is not going to be easy for managers this year. It will be a fine balance between the current business situation, external environment and personal factors which will ultimately determine the individual's compensation.

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

NM Performance appraisals are primarily undertaken to improve performance of employees, measure outcomes, and identify their strengths and weaknesses. Entire process serve as a developmental and motivational tool for employees, but considering  the current situation where employees are working from remote locations and productivity is getting impacted by external factors there are possibilities that it could have negative impact on employees deliverables.

This year especially, HR will play a pivotal role to ensure that assessments are fair and are based on reasonable performance expectations taking into account COVID-19 challenges to ensure employee morale. The managers will need to consider individual circumstances, including consideration of real-life challengesand factors that might have impacted employees' performance outcomes. HR has to play a key role to ensure that decisions are based keeping employee at the centre, and that employees are dealt with care, compassion and empathy.

In the bigger picture of how the last few months have unfolded from a business perspective, the outbreak of coronavirus forced organizations to focus on survival and sustainability, replacing the focus on exceeding targets set for the year. This led organisations to explore alternatives to keep the ship afloat. In a nutshell, such exploration is bound to lead to new deliverables, new plan of action, rethinking strategy, reallocating roles and projects, and all that in an absolutely new workplace which is virtual, distant and for many a firsthand experience of working from home.