April 20, 2018: It’s the Judgement Day today in Sparrow Solutions today – the annual performance assessment ratings will be released in the organization today.
For most employees, it’s the day when their efforts throughout the year will be recognized and eventually rewarded through increments, bonuses, and promotions.
A few employees fear the worst that they might be asked to leave due to under-performance.
Every year, most organizations ask the bottom 10% of employees to leave due to poor performance. It’s a tough call but it is imperative.
The organization often needs to wait for a whole year to figure out that someone is underperforming based on the performance appraisal and then take action.
On the other hand, a high performer needs to wait the whole year to get his or her due.
The other big flaw is that the qualitative assessment of performance leaves a lot of room for biases.
Plus, most organizations spend an inordinate amount of time discussing and debating about performance ratings.
Add to that the time spent in collating and presenting the data. All of this hampers productivity and delays actual action.
In all organizations, there is a big push towards making data-driven decisions even in people matters.
The big data approach to performance appraisals would cut down on manual effort, and reduce bias and cycle time.
Hence, we should be looking at continuous performance assessment and corrective actions.
As employees work, they leave a trail of data in work tools such as Project Management System, CRM, ERP, Attendance System, etc.
Automated performance management systems of the future will monitor employee performance continuously, based on data from these systems.
These systems will score the employee’s performance based on parameters linked to business results and suggest corrective actions.
Actions could range from recommending training and connecting with an expert to even suggesting a change in the job profile.
Or it could be simply alerting the reporting manager or the HR.
The biggest advantage of such systems would be the continuous assessment of employee performance.
Corrective actions can be immediate, so there is no need to wait until the appraisal cycle.
Be it training, re-skilling, role enhancement (read as a promotion), or role change – can be initiated immediately.
The system will have predefined thresholds for each action. It will learn from past results of such interventions and tweak its algorithm for more effective interventions.
The system can also keep track of employee motivation and take corrective action before it starts affecting productivity.
In today’s business environment, every second counts. And keeping pace with the business changes is the need of the hour.
Hence, such performance measurement and development systems can make employees and organizations more responsive to changes.
Data-driven real-time performance management systems will result in higher productivity, greater business impact, and higher employee satisfaction.
These systems can cut down the time spent by the organization in a typical appraisal cycle drastically.
Think of start-ups and small companies that are growing rapidly, and need to be extremely responsive to the business environment.
But at the same time, they will always be short on HR resources to manage their people and performance.
Another advantage is that these systems remove supervisor bias and errors.
It might take some time before the system can speak out ‘You are promoted’ or ‘You are terminated’. However, we are going to see more intelligent learning systems for employee performance management very soon.
Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of experience in the corporate world and entrepreneurship. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank, in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn
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