Posts Tagged ‘Human Resources’
Thursday, January 28th, 2010
Resources, Tools and Methodologies for Talent Acquisition, Hiring and Recruitment
Introduction
One needs to have dreams, plans, and strategies to be successful in any venture. This is a basic requirement. If you do not know what you want, where you want to reach and how you want to reach (your mode and plan for success), you certainly cannot reach there. In case you are starting a new venture or you are planning to diversify your existing business, you also need to identify the source for your capital (Financial Backing). You cannot do all these things on your own. You need “extra-ordinarily talented” and Highly Skilled people to help you to reach the goal that you have seen for your organization. For this, you need a jeweler (the talented, matured and exceptionally skilled HR Professional) to identify such DIAMONDS for you. It is one of the key roles of a HR Professional to identify, source, select, HIRE and RETAIN BEST of the talent from the market to work for the organization. If they cannot find talented people from the market then they need to groom the right type of people with the right type of attitude and aptitude. In 21st Century, we are in the era of “war for talent”. It is becoming difficult to get right type of people and retain them. Many companies are losing their businesses because they are not able to hire “right type of people”; because they compromised with the “quality of the talent”. In this article, we will try to explore and understand different sources to get “Best of the Talents”. Any reference of HR Department” in this article, means Team of Talent Acquisition, Hiring and Recruitment.
Different Sources to Get Talented People
As a HR Professional (Chief Talent Acquisition Officer; Hiring Manager or Recruitment Head), one should be aware of all the sources and resources to get best of the talents and they should also be aware of as how to use those resources to the optimum level. You can use either or all of the below mentioned tools to get BEST talents.
1) Existing and “Active” Candidates Data with Company
This is primary, but if properly used, most important source and tool in the hands of HR Department to get right type of people. The HR department gets N number of profiles every day from different sources (including candidates who just drop-in their profiles at the reception. The HR Department needs to maintain and update this data on regular (if possible on daily basis). The details and data should be maintained in such a manner that one should be able to generate a MIS, stating number of profiles in the database, skills of the candidates (including education and experience level) and status of each profile (if short listed or not; if interviewed or not; date of interview; result of the interview; if rejected or selected etc). All these profiles should be considered as “active profiles” for six months from the date they were received in the HR Department of the Company. Any other profile older than six months should be deleted and destroyed. Such profiles are of no use to the company. The HR department should be able to use this data to fill the existing vacant position with a MOST suitable profile.
2) Employee References
In last decade and a-half, all the companies across various industries are facing a BIG challenge to retain the talent in their companies. People are resigning for various reasons. There is another challenge of FAKE profiles (People are faking about their experiences, salaries etc. Many people are just COPYING someone’s profile and presenting it as their own, without even knowing what they have mentioned in it). To handle this, it has become apparent to do reference checks. Getting the reference check done in a proper way is very costly.
Considering the above two scenarios and just to counter it, it is important to hire a person through the reference of your existing employee. No one can present, market and brand your company, market the culture and policies of your company then a happy and highly motivated and engaged employee of your organization. Hence, hiring with the reference of your existing employees is an important source and tool to hire and retain Quality Talent.
3) Internal Advertisement (internal Job Posting)
Learning is a continuous process. Many people keep on learning new skills, updating their skills and acquiring higher degrees by way of distance mode of education. There by you might have “multi-skilled” and “multi-talented” people within your organization. Hence, it becomes crucial and important to post your job-requirement, internally for your existing employees. By doing so, you will be able to RETAIN good and talented people.
4) Jobsites and Job Portals
If the above three sources and methods are used appropriately, efficiently and to the optimum level, hypothetically you do not need to go outside the company to get good people, working for your company. However, that is actually not possible and hence, you also need to look for external sources to get MORE Suitable Talent for your company. There are many Job Sites and Job Portals, available in the market and you need to select the BEST one for your needs. Good Job Portals have huge database of millions and millions of profiles. You can source a “Suitable” Talent from that database. You can also post your job requirements on job-portals just to get more relevant profiles. You should learn how to use all the features of your job-portal for its optimum utilization.
You can also have the HR or Job Site of your company and post your requirements on that site. This will also give appropriate branding and advertisement to your company and will also help you in managing the “Candidate Database”.
5) Campus hiring
In case, you like to hire “knowledgeable, talented and properly groomed” freshers then you should opt for Campus Hiring. This will give you Raw Clay and Material that you can mould as per the need and culture of your organization. You need to plan your “Campus Hiring” in a suitable manner to target right type of people. You need to decide, if you like to hire a plain graduate or a graduate with some specific trainings or Management Graduates or Engineering Graduates etc. If you provide right type of atmosphere, culture and processes, chances are that you will be able to retain these freshers, trainees for a long period of time. There are many Business Magazines which publishes lists of BEST institutes in different categories, locally, nationally and internationally.
6) Recruitment Consultancies
Most of the time, even recruitment consultancies also uses various job-portals to source talent for their clients. Hence, it makes more sense, if you buy one login on any of the relevant job-portal (or more than one job portal) and if you learn how to use it properly. You need the help of Recruitment Consultants if you are planning to hire a talent through head-hunting for senior profiles and from different geographical locations; for example, if you are planning to hire someone from international market. Hence, taking the help of Recruitment Consultants to hire talent for you should not be your first choice or option.
7) External (Newspaper) Advertisement
This is one of the VERY costly source to hire talent. External Job-Advertisement on media (Newspaper, Television, Radio etc), helps you in Branding and Publicizing your company but if not targeted properly and managed properly, this is one of the POOR but COSTLY source to get suitable talent. You need to understand and plan properly, what type of people you are looking for, from where you can get those people, which newspaper do they read, how you want to get and manage these profiles and what you will be doing with that database or else, you will not be able to get suitable talent.
 Social and Professional Networks & Local Communities
There are few professional and social networks, such as LinkedIn, FaceBook, Orkut etc, that you can use to get right type of talent (of the listed networks, LinkedIn is highly recommended). You can also target few NGO’s, Training Institutes and Local Communities to hire low-level, low-cost workers for factories and your companies.
9) Head Hunting (Also called as “Body Shopping”)
There is this bread or group of talent, which are highly experienced, competent with great leadership skills but very passive in job market. They are very experienced in their domain and industry. Sometimes, they are also the founder member of the organization. Generally these are the people working in the capacity of Senior Managers, General Managers, CFO’s, CTO’s, CEO’s, Vice-Presidents, Directors, and Managing Directors etc in their present roles. They do not post their profiles on jobsites. They do not even read job-sections of newspapers. They do not apply for any jobs opportunity. Only very few of their friends and close associates are in procession of their profiles. They need to be challenged by an opportunity. Such people need to be head-hunted. Generally, recruitment consultancies are EXPECTED to do this job. This is a way to get the talent when you are looking for rare and distinct talent that is when you are looking to fill positions like CFO, CEO etc. Here, numbers are not important but quality is. In a year, you might be able to head-hunt 15-20 people but they will be of high worth and value. Not everyone can be a “Head Hunter”, you need to have “special” type of skills to be a “Head Hunter”. Every type of sourcing is not called as head-hunting. For a sourcing to be called as “Head-hunting”, this should involve “rare profiles”; profiles and skill sets not readily available in the market.
10) Talent-Poaching
This, according to some section in the industry, is considered as unethical mode of sourcing and hiring. For this, you need to understand the business of your company and also should be aware of the competitor companies in your industry. Just target those companies and hire in masses from those companies right from the entry level to senior level. This tactic is usually used to kill the competition. This is like a big fish eating the small fish. People across the globe are discussing and debating to ascertain, if the “Talent Poaching” is ethical or unethical. No doubt, this is one of the easiest ways to source trained and talented people within the industry when you have infrastructure and money.
Distinction between Headhunting and Talent PoachingSome talent acquisition managers as well as hiring and recruitment professionals are confused and are not able to discriminate between the two. Here are few differences between the two:
1) Headhunting is associated with senior and rare profiles. Talent Poaching is just sweeping and running through talent-wealth of your competitor.
2) Headhunting is planned. Talent Poaching is targeted.
3) In headhunting, the intention is to get the BEST person for your organization but in Talent Poaching, the intention is to kill your competitor and the competition.
4) Headhunting is about getting a person with “Leadership” skills with “Global Exposure”. Talent Poaching is about “saving the training cost”.
Conclusion
This article is not about “Recruitment Process” or to describe about “Steps involved in Recruitment Process” but just to share the resources and channels to source and identify talent. I have taken care to list all the possible channels. I am sure all the readers will gain from this article.
Tags: hiring, Human Resources, Recruitment, Talent Acquisition
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Monday, January 25th, 2010
If we trace back the history of business environment, in the early years, trading patterns and markets were stable, technology was static, customers were passive, speed in getting to market was secondary, competition was limited to sectors and regions, and hierarchies were generally accepted in all walks of life. No more, since 1960’s, America and much of the rest of the world has been almost continually buffeted by change. Customers demand that businesses do it better, faster, cheaper; employees want to control more than the “Stop” button on the assembly line. The twentieth century saw nations around the world become part of the global village, with trade barriers between them reduced or removed completely. Globalization of trade and economy are taking deep roots in India. The holistic paradigm shift to a single global company has opened up new economic opportunities. Events of the last five years of the previous century have focused our attention on knowledge industries. Quality human resources have therefore become an important base with which to respond to the emerging environment. The knowledge workforce in particular has a vital role to play in the emergence of the digital economy.
A look at the trends in managing people in this dynamic industry reflects that Attracting, Managing, Nurturing talent and Retaining people has emerged to be the single most critical issue in lieu of the enormous opportunities spun off by the market. The new avatar of talent is the knowledge professional who is innovative, business savvy, quick on the uptake, has an instinctive ability to network, and possessing unbridled ambition. They are propelled by an urge to experiment, scan new avenues that can spur their creativity. The knowledge professional will gravitate to an organization that is flexible, has strong values, a robust performance ethic and provides challenging work on latest technology. This has led to companies proactively taking measures on three fronts. First, companies create an organizational ambience where talent can bloom. Second, they put in place systems that help unleash their potential and third, theybuild a reward and recognition mechanism that provides value for people.
Profound systemic changes have been seen in the way companies are structured. The concepts of leadership and managing people gave undergone a radical rethink. Cubicles, hierarchies and rigid organization structures of the past, have now given way to open work environment, flat structure with informality being a general rule and empowerment of individuals. Today work itself is centered around projects, which have virtual teams working on them. This work structure has led to a culture of flexi time, round the clock accessibility to the workplace. Also catching up fast is the trend of workstations at home, remote access, video-conferencing and reporting by exception. To stay one step ahead of the aspirations of their people, companies are continuously striving to provide an intellectually stimulating environment. Few examples being, in-house libraries, continuous up gradation of knowledge and skills, knowledge sharing, building relationships with academia thus enabling knowledge workers to pursue multiple careers within a single company. Coming times will see sabbaticals forming part of the organization culture, corporate universities dotting the new horizon, competing companies bunching together to setup knowledge networks.
Companies today are constantly striving towards enhancing the quality of work life and also the personal life of its employees and this does not stop with the employee buts gets extended to his / her family as well. In-house health clubs, yoga and meditation centers to relieve stress, sports and cultural activities, employee get-togethers with invitations to come over with families, day care centers and many of the like are being provided by companies.
With the increasing size of the companies, the top down communication model of yesteryears has been replaced by bottom up, cross level communication thereby encouraging people to voice their opinions and feelings. Open house sessions, mentoring, online chats on the intranet have emerged to be the communication enablers.
The new economy has given rise to a culture of working in teams. Today no job in the knowledge industry can be performed in isolation. Since working in teams is not a passing fad, companies are now designing compensation structures, which rewards team performance in addition to individual performance.
To conclude, change is here to stay, and we need to understand that all the practices that are working today may not necessarily work tomorrow. Customers’ expectations, market changes and strategic decisions will derive the tools to managing the human assets.
Tags: Human Resources
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Monday, December 21st, 2009
I must confess that I used to have a myopic view about the true definition of Human Resource Management (HRM) function. I thought then that training and development was just incidental in HRM roles and functions, where the real KRA’s (Key Result Areas) are recruitment, personnel records, salary and benefits administration, and labor relations. What I saw was a department labeled, at best, as a paper mill and, worse, as employees’ counseling clinic.
In fact, when there is no scheduled training or seminars to facilitate, one of my duties is to attend to various employees’ concerns and problems, including personal issues. I enjoyed the job though, but I was craving for more. More challenges. Strategic HRM roles that I think would make my department add value to the business in general.
That was then.
Now, I must say, I have a better grasp of what human resource management is. HRM business practice has evolved considerably over the years. As Perrin concluded, the HRM is no longer viewed as an independent department that caters only to the needs of the employees but as business strategic partner. With this, more and more HRM functions are now being shared, if not delegated entirely, with line managers and supervisors. This is was a welcome and advantageous development, not only for us HR practitioners but for the organization as a whole. With these shared responsibilities, the HRM have now become an integral and indispensable part of organizational change, business planning, and development of company’s competitiveness.
With this evolving HRM role and function, there are at least two important advantages that the organization will benefit there from, to wit:
1.
Less administrative burden for the HRM department or professional.
Because some of the important HRM administrative roles, now become a function of line supervision and management. What used to be employees’ problems and issues being hurled to HRM, are now being handled effectively on the shop floor by the concerned unit heads. Grievances and employees’ conflicts are now being mediated and resolved immediately by these people. This should have been the case from the very beginning, in the first place. Who else can better understand and resolve these issues other than the people who have direct supervisions? The most important role of HRM now, in this case, is training these line supervisors and managers to be better at motivating employees for performance and effective dispenser of HRM interventions in their areas of responsibility.
2.
More time for the HRM to focus on Strategic Human Resource Management (SHRM).
This means, they can focus more on developing programs that will increase the organization’s competitiveness. The market is becoming more competitive each day, as technology advances at pace that we cannot almost cope. More so, way of doing business is always improving, if not changing. SHRM means devoting more time on addressing these competitive challenges and issues. This role is not easy, as it seems. This involves developing HRM plans and programs that integrate business policies, goals, and objectives to ensure that company is prepared and equipped to face the fiercest of its competitors while increasing its bottom line. It is a huge task. However, none in the organization is better fit to do this than the HRM.
New markets will emerge and new businesses will open. The HRM function will continue to evolve to adapt to these trends, and they will assert greater influence as to where businesses should be in the future.
Tags: Businesses, Human Resources
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Monday, December 21st, 2009
Human Resources leaders need degrees. If you are considering a career in Human Resources, or trying to advance your current career, a Bachelors degree, and even a Masters degree, will assist you to achieve your goals and dreams. Degrees have become more important in most fields, but nowhere has the shift occurred quite as dramatically as in HR. As organizational expectations of the potential contributions of an HR pro have increased, the need for the HR leader to possess both experience and a degree has increased, too. In fact, a degree is becoming essential.
I can’t say that I would never consider a candidate for a role in HR leadership who didn’t have a degree – never say never – but, why would an organization select a candidate who has experience and no degree, over a candidate with experience and a degree? (I am making the assumption that the organization likes both candidates and their cultural fit and experience are equal.)
In my experience in hiring, I have found college degrees, that have emphasized well-rounded understanding of the fundamentals, quite predictive of future success. We can all name an exception. My father’s best friend quit school after seventh grade, founded nursing homes, and is the richest person I know. But, he is an exception.
Hiring Human Resources Leaders, Who Have Earned a Degree, Sends a Powerful Message
A degreed HR leader will generally prove more effective and more sought after than a person without a degree. Here’s why.
* The staff members the HR leader will supervise increasingly have degrees. An MBA and a Business degree with a concentration in HR or organization development are becoming more common. So are candidates with degrees in psychology, sociology, and other areas of liberal arts. Degreed staff will look up to an HR leader with degrees.
* The staff members whom the HR leader advises will increasingly have degrees. As the HR leader progresses up the organization chart, his or her peers will increasingly have degrees and MBAs. Especially as a company grows and hires more professional staff, degrees become the norm. The HR leader needs to possess the same ticket to be a sought after confidant and advisor. The degree is step one in joining the club.
* Especially for salaried positions, degrees plus experience rank highly among the traits, skills, and characteristics identified as needed and desired from people selected to fill most of the leadership positions in organizations.
* A college degree and the coursework associated with earning that degree have long been touted as producers of well-rounded knowledgeable candidates who can think and solve problems, and who have proven they can stick with a goal and complete it. Just one college website advertises its graduates:
Among Skidmore College graduates, you’ll find young men and women prepared to both think critically, and to apply skills practically and professionally in a variety of settings … Skidmore’s distinctive integration of the traditional liberal arts with preparation for professions, careers, and community leadership equips our students exceptionally well for excellence in today’s increasingly complex world.
* The HR leader is usually the education and development leader for the organization. The individual who leads in this role should be able to demonstrate the value of education in their own life.
* The HR leader generally serves as the initiator of processes that identify and encourage high potential staff. This role includes encouraging employees to attend school to further develop their skills and capacities. Additionally, the HR leader assesses the need for and often delivers training and development sessions to others in the organization. The degree brings credibility to his or her ability to do these activities.
* Recognize that this is an opinion, and I am unaware of data that support this opinion, but I generally find that HR people without degrees lack knowledge and experience in organization development, strategic business management, and management development. They lack some of the educational and developmental leadership background and skills of their more educated counterparts. At the same time, they often have deeper knowledge in transactional areas as they generally worked their way up over the years from an early payroll or administration job. Indeed, they usually have in-depth knowledge of employment law and policy and procedure making, too.
In summary, a degree is becoming essential for an HR professional who plans a leadership role in an organization. In fact, I believe that a Masters degree, a JD degree, or even a PhD. will eventually be the degrees of choice for HR leaders. Certification through the Society for Human Resources Management is becoming more common as well. Will you be ready to compete for the best HR jobs and opportunities?
Tags: Human Resources
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Monday, December 14th, 2009
Performance Appraisal, Individual Performance Review, Personal Performance Development Plan. There are numerous names for this artifact of the post-1990s organisation, but they are names for basically the same concept: the measurement, review, evaluation and management of the performance of an employee. And it is one of the most contentious management processes of them all!
Why Organisations Do It
There are many reasons why managers continue to use individual performance appraisals, despite their love-hate relationship with them:
• to motivate staff to perform better, to contribute more to the organisation’s results
• to reward and recognise great performers
• to validate decisions to get rid of (or manage) poor performers
• to give staff the opportunity to continually learn and develop
• to make the organisation and its processes perform better – to inform succession planning and promotion decisions
The intentions behind almost every employee performance management system are good and just. It’s about making things better. But are they really making things better, the way most organisations currently design and implement them?
Why People Are Asking for Help
It seems that the majority of organisations will claim they have some kind of individual performance evaluation process, but that it doesn’t work the way they want it to. There are some very common criticisms about it. For one, when they come to doing the evaluation or appraisal, managers don’t have much objective evidence about how the person performed, what they really produced or the size of their contribution to team or organisational outcomes. In such cases, the appraisal process leans to shaky subjective impressions of the boss, or a tick-and-flick review of the actions that the person was supposed to take. Objectively isolating the value the person contributed to the organisation is impossible.
Another common criticism is that the appraisal process drives the wrong behaviours. People know they can only be judged on how much they do or contribute, so they try to do a lot, or try to do things alone in order to isolate their contribution from the contributions of others. Outcomes and teamwork are not the focus, and the organisation actually suffers as a result. Resources are wasted on activities that don’t improve business growth or customer service. Conflict and competition arises between employees that should otherwise be collaborating for the betterment of the organisation. This can result in performance actually getting worse, not better. There is a lot of activity, but not much in the way of results. There are a lot of people striving to get quick, local results, but often at the expense of the larger organisation or the long term.
Then there can be the problem where people can’t agree on what the performance standards are or should be. They have different ideas about what is possible, about what is achievable, and therefore what can be judged in the performance appraisal process. People don’t want to be held accountable for the results they contribute to, because they are not in complete control of those results. And in many instances, the performance appraisal reduces to a check of whether or not activities were completed, as opposed to the size of the impact those activities had on organisational performance.
And, in general, we just don’t like criticizing each other, or taking anything away from others. Especially when performance reviews are tied to remuneration, managers can find themselves in an ethical quandary when the numbers say that someone doesn’t get their bonus, but their gut feel is that the numbers are missing something more important. People who stick to their performance plans are rewarded, and those that stray from the plan and produce innovative solutions to organisational problems are not able to be rewarded. People who follow the safe road of predictable results are rewarded, and those that make mistakes that contribute to organisational knowledge and learning are “performance managed”. People whose performance measures achieve targets despite their inaction are rewarded, and those that have diligently monitored, analysed and managed root causes to turn around a bad trend (but which hasn’t yet achieved its target) are not rewarded.
Managers conducting performance appraisals are not finding it to be a meaningful process – they are just jumping through the hoops (especially if their organisation has a KPI like percentage of performance appraisals completed on time). One of the objectives of individual performance appraisal is to develop people, but very few examples exist of where it dignifies people.
Because of all this criticism about performance appraisals, some have put their thinking caps on and tried to come up with improvements or alternatives. What I have found interesting is that the different schools of thought regarding the measurement of people are tied to very different world views, or belief systems. And this affects the success rate of different approaches to performance appraisal in different organisations.
The First School of Thought: Make People Work Better for the Organisation
People are our most expensive resource. People are our greatest asset. These are the catch-cries of organisations with what Colins and Chippendale(1) might refer to as having an “institutional” worldview.
With this worldview, the leaders of the organisation collectively instil such values as patriotism and loyalty, self-worth, upholding tradition, achievement and success, administration and management, family and belonging. And employee performance management is about making sure that employees are managed just as other organisational assets need to be managed. Just as other organisational assets are owned, so too are the people. The organisation is the subject, the priority organism, and the people are objects, the servants to the organisation.
These organisations, even if with the best of intentions, adopt a controlling relationship with their workforce. At one extreme, employees are almost a consumable, bitten off, chewed up and spat out when they are no longer needed, become difficult to handle or when they are so burned out they can no longer endure the organisation’s impact on their lifestyle and health. This dynamic is glaringly obvious in many sales oriented businesses, small businesses whose owners are not capable managers and leaders, or any bureaucracy that is lead by a tyrannical productivity maniac that believes the only information he needs to manage the organisation is this month’s and last month’s financial results.
At the other extreme of the “institutional” worldview organisation, employees are taken under the organisation’s wing and nurtured, supported and developed, but still in a way that serves the organisation’s greater purpose. Something like a “father knows best” philosophy presides, and the higher a person is in the hierarchical ranking of the organisation, the more wisdom they are assumed to have, and the better placed they are to know what is best for everyone under their care or command. The military comes to mind as an example of this kind of organisation, and organisations like the mafia, and organisations that are based around a profession like engineering or medicine or law.
Performance management of people in the “institutional” worldview organisation is usually to avoid the risk of carrying people that just don’t produce results for the organisation. People will be judged by the results they individually produce, such as sales or on-time project completion or keeping to budget or caseloads, and for doing what they were told. But this is not the only type of organisation that exists, and not the only way to manage people’s performance.
The Second School of Thought: Make the Organisation Work Better for People
Leadership coach Shelley Holmes, from The Centre for Breakthrough Leadership(2), says “organisations need profit in the same way that humans need oxygen, but it’s not their reason for existing”. Their reason for existing is to help people fulfil their potential. So are people really another asset or resource of the organisation? Or are they its purpose? If we treat people as assets (even if we say they are our greatest asset) or as resources, we are treating them as objects that need to be controlled by the organisation. Assets are owned, people are not. (I personally prefer the point of view that people control organisations in a way that makes their lives, and the lives of others, more meaningful.)
An organisation whose leaders instil these values might be said to have a “collaborative project” worldview. What is important is equality, actualisation, service, autonomy, dignity and justice, ethical accountability, personal authority, empathy and generosity. And this puts performance management into a very different light. If performance management was instead value management, it would be about how the organisation can better serve the needs of the humans for which it exists.
You can see this kind of worldview in organisations like The Body Shop, which designs it processes around the social needs of its employees, customers and suppliers. They have crèches for their working mothers, they develop their products from resources that don’t harm the planet and that support local communities. The organisation’s purpose is not to make skincare products, it’s to enrich and dignify the lives of all people that choose to associate with it.
These organisations don’t make the fundamental assumption that each individual’s impact on an organisational result can be isolated, singled out, independently and objectively assessed. How can this be so, when each of us interacts constantly with each other, sharing knowledge, sharing ideas, helping each other out, working on the same activities, collaborating to produce the same results? This line of thought gives rise to some other ideas about how to better motivate and reward people for the value they add to the organisation. Role-modeling, coaching, encouraging, rewarding and celebrating behaviours like sharing knowledge, sharing ideas, helping each other out, working on the same activities, collaborating to produce the same results, seeking regular feedback, acting on feedback to improve results, are more the flavour of performance management in “collaborative project” worldview organisations.
Borrowing from the Second to Improve the First
The one-size-fits-all approach to managing the performance of people clearly doesn’t work. And there is enough research suggesting that traditional approaches are certainly not working for everyone. At best, there are some basic flaws in how those ‘people measures’ are designed. And at worst, the whole concept of measurement of people performance is completely a waste of time.
The debate shouldn’t, in my opinion, be about which people performance management approach is the correct one. It’s more about which approach achieves the intent you have for your organisation and your people, from the points of view of all stakeholders. And this means understanding the diversity of values that people in your organisation have, and the worldview that this collectively gives your organisation as a whole. So you won’t likely find an approach that does work for your organisation, unless you can answer quite thoroughly several important questions:
• Why do you want to measure the performance of people?
• What is the end result you want it to create?
• What are the unintended consequences, or risks, of getting and having this end result?
• What other ways could you create this end?
• What worldview does your organisation have, and hence how is the relationship of people to the organisation understood?
• What values do the individual people in your organisation have, and what does this say about what will really motivate them (and keep them motivated)?
Tags: Business Performance, Human Resources, Performance, Performance Appraisal, Performance Management, Workforce Management
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Monday, December 14th, 2009
There is a rising demand in organizations for improved performance and results. American business, in serious trouble during the 1970’s and 80’s, led the way in finding new approaches and processes to boost performance. Today, organizations in all sectors, including government, are similarly challenged to operate more efficiently and effectively. Raising individual and team performance levels is central to this process and 360° feedback is increasingly used as part of the solution. Unfortunately, there is an advancing drift toward using 360° feedback for performance appraisal. Organizations need to be careful here. Using 360° for appraisal may be an intriguing idea, but it’s not the best use of this exciting new technology, and it is counter-productive in this role. It can put the organization at unnecessary risk and have a negative impact on motivation, performance, and the entire work environment. This article explains how to avoid this costly mistake.
Tools With Different Purposes
At its best, performance appraisal is an evaluative process used to determine results. Its purpose is to measure and evaluate contribution to the organization in order to provide feedback and fairly distribute rewards. Performance appraisal allows employees to more clearly see the results of their efforts, the relationship between their job and the organization’s performance, and be rewarded for their particular contribution. Results, or contribution, can best be determined by first creating clear and agreed upon goals, and then measuring progress against them. This establishes the benchmark and gives employees a known target at which to aim. In the absence of clear goals, managers are forced to measure something else. What often gets measured, then, are factors such as effort, attitude, personality, teamwork, behavior, etc.; feedback on how an employee is supposedly “doing”. This is not an accurate or fair measure of job performance or contribution.
360° feedback is a developmental tool. It is designed to encourage employees to grow and develop by providing feedback on their proficiency in the skills, competencies, behaviors, and practices related to the conduct of their jobs. As employees learn, grow, and develop, the organization increases its capacity to perform at higher levels. In business this means these organizations are more likely to out-perform their competitors.
By design, 360° feedback is good at identifying, measuring, and improving the skills and competencies needed to perform a job. It is especially good for the hard-to-quantify interpersonal areas (often labeled the ’soft skills’) of behaviors and practices. Examples of this include listening, informing, resolving conflict, coaching, teamwork, and leadership. Well designed 360°’s can even identify the underlying attitudes and thinking patterns that drive the behaviors and get to root causes of counter-productive actions. 360° feedback can also be adapted and used appropriately to identify and measure areas such as customer satisfaction, team effectiveness, training needs, and work environments. 360° feedback adds value to the employee and organization development process for three reasons: It has clear and precise measurement capability; it provides perspectives from multiple sources - co-workers who see and know the individuals’ proficiency levels on a daily basis; and it accelerates learning.
Performance appraisal, on the other hand, is good for measuring outcomes and results, what people are actually hired for and paid to produce. It is designed to clarify and document the goals, outcomes, milestones, time frames, and measurements to be used. Performance appraisal and employee development are separate and distinct processes with different purposes and different measurement tools. They can and do complement each other. They are related, but they are unique.
Problems with the Linkage
It is too often assumed that since multi-source is better than single source, automated is faster than manual, and evaluating performance (results) is the same as measuring proficiencies (skills, competencies, etc.), then 360° feedback is simply a more efficient and effective tool for conducting appraisals. Assumptions like these can get you in trouble. For developmental purposes, multi-source feedback does have more validity and leveraging ability than single source. It is broader and brings in multiple and more balanced perspectives. But typical multi-source raters are less adept at providing balanced and objective feedback than the supervisors they may be replacing. They can have enormous problems separating honest observation from personal differences and biases. For appraisal purposes, co-workers are poorly qualified to give evaluative feedback that affects pay and promotion.
Because 360° feedback is usually automated, it is an attractive technology. But is it appropriate to performance appraisal because of its speed and ease? What is it that makes appraisal or development particularly effective? Thousands of managers have told me that it is the quality of the conversation between the rater and ratee that is important. Being able to explore and discuss aspects of one’s work with clarity and without the usual time pressures is highly valued by most employees. When the boss takes time to sit down, close the door, and discuss performance, people frequently have the experience of being heard and valued. This often results in a boost in morale, motivation, and performance. Managers frequently say that they wish they took time more often to have these conversations because so much gets clarified and accomplished in them. It is the quality of the interaction, not a computer program, that has the greatest potential for improving appraisals.
Performance appraisal in most organizations is used to determine merit increases and bonus amounts. However, if 360° feedback is linked to compensation decisions, it loses its power and benefit as a developmental tool. When employees recognize that their financial rewards are based on multi-source feedback ratings, they quickly see how the new game is played. Realizing what is required to achieve a good appraisal, employees can manipulate the process to ensure the desired outcome. The ‘ratee’ can be helped or hurt. Putting two and two together, employees realize that “if you scratch my back, I’ll scratch yours.” Suspicions that were formerly directed at performance appraisal are now focused on 360° feedback. The “new” system becomes tainted. Trust and honesty begin to break down in favor of getting a good review. As a result, actual skill proficiencies can decline which, in turn, leads to a weakened ability to compete or deliver, and a performance environment of mediocrity. This can result in defensiveness, denial, conflict, accusations, and loss of trust. It puts the relationships within the work group in jeopardy and can lead to an expanded reduction in productivity and performance.
Finally, organizations using 360° feedback as a performance appraisal tool are exposing themselves to increased liability. 360° feedback is not a tested or validated mechanism for performance appraisal. An organization needs to be prudent and consistent with the standard and proven performance appraisal approaches. According to EEOC guidelines, an “organization must demonstrate that its appraisal process is valid, that it is job related, and that it accurately measures significant aspects of job performance. The organization must demonstrate that the appraisal system is the best available method, that no other system is less discriminatory.” If an organization uses 360° feedback for appraisal and promotion purposes, it must be particularly careful to ensure that those contributing to the appraisal were not violating the EEOC guidelines or the Civil Rights Act. Consider the normal, unconscious bias of only one manager. Now multiply that by four to eight co-workers and you begin to see the risk expand geometrically.
Leveraging the Linkage
Appraising performance is not the same as measuring proficiencies. Appraisals are designed to measure results against goals and drive compensation decisions. 360° feedback measures proficiencies in the skills, competencies, behaviors, and practices needed to perform the job and drives employee development. The two are linked but are not the same thing. Skill level is only one of several factors that influence performance and is the focus for 360° feedback and development. Performance levels strongly influence results, and results are the logical focus of performance appraisal.
One way to link and leverage the two is to use 360° feedback to create a clear and specific development plan. Implementation of the development plan can then become a valid part of the performance appraisal (as long as it is required of all employees) on which people can be evaluated and held accountable. The development plan can also be used as an entree into the succession planning process. It is not uncommon for organizations serious about developing their capabilities to require such plans of all managers, and non-management professionals, as well.
Potential Dangers
Given the distinctions between the two, and given the drift toward co-mingling, what occurs when the 360° feedback is actually used for performance appraisal? Here is a list of potential dangers, risks, and unintended consequences that can result when the two are merged:
• Skewed and unreliable data from raters who, consciously or otherwise, shade their responses
to protect or punish the ratee
• Increased cynicism from employees who know the system is being gamed.
• Skill levels stay relatively flat or even decline because the “360° appraisal” is not taken seriously.
The numbers needed for a “good” appraisal can be informally fixed by silent agreement among
raters. Maximizing the size of the increase or bonus overshadows the desire to elevate
performance.
• Individual development plans become window dressing. People may go through the motions to
create them but expend little effort in implementation. When not held accountable for this,
performance levels off.
• If employees don’t get a “good” appraisal, blame is placed on co-workers causing a rise in the
level of mistrust and apprehension. The work environment becomes politicized, candor and
honesty are compromised, trust and integrity are damaged, risks are avoided, motivation
diminishes, morale drops, performance declines, and turnover rises.
The Bottom Line
Executives and managers considering the use of a 360°-feedback tool for performance appraisal need to be aware of the inherent differences between them. Be clear about your purpose. What is it that you are trying to achieve? What results and outcomes do you want to have? Remember, performance appraisal is an evaluative process for defining goals, and measuring results and contribution. 360° feedback is a developmental tool for identifying, measuring, and improving the skills, competencies, behaviors, and practices needed to perform the job. They can, and do, complement each other, but they have distinctly different purposes. Using 360 feedback for the wrong reason can result in decreased performance and increased risk. The bottom line: Keep developmental feedback separate from appraisal and compensation decisions. Using 360 feedback for the wrong reason can result in decreased performance and increased risk. And it will ensure that 360 feedback will be declared the management fad of the ’90’s. Large investments of time, money, and credibility will be lost.
Guidelines for Using 360° Feedback and Performance Appraisal
Here is a set of guidelines for when to use 360° feedback and performance appraisal that can help your organization stay squarely on the road of increased performance and success:
Use performance appraisal:
♦ To set clear, specific goals
♦ To establish measurements to determine outcomes and results
♦ To evaluate the degree to which outcomes and results were achieved
♦ To determine, based on performance, what increase or bonus is due
Use 360 feedback:
♦ To identify, the skills, competencies, behaviors, and practices needed to achieve goals,
outcomes, and results
♦ To measure proficiencies in skills, competencies, behaviors and practices
♦ To assess where improvement is needed to achieve desired results
♦ To create targeted development plans that increase capabilities and performance
♦ To assess what environment will bring out the best results from individuals and teams
Tags: Human Resources, Leadership, Leadership Advantage, Management, Performance, Performance Appraisal, Performance Management, Team Management, Workforce Management
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