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Prasad Reddy

"A Re-Look at Performance Management System "

Prasad Reddy
With over 12 years of experience, Prasad has varied management experience across HR, IT, and Administration. His thorough understanding of business fundamentals and impact of HR on business helps him in building teams from scratch.

Google search showed up 28,90,00,000 results (0.20 seconds) when I searched for the word Performance Management System.

Organizations take lot of pride in establishing Performance Management System (PMS) and in HR Fraternity if somebody is involved in ‘designing’ and ‘implementation’ of PMS, they are lot more respected, and you can always see a sense of achievement in somebody who has put in a PMS – be it the HR Head or the CEO.

 Reason I am touching this point is to underline the importance that we all give for establishing a PMS in an organization. But, what I have seen in most of the PMSs is the lack of holistic view on Performance of People.

I am not sure if all of us, especially in HR, are carrying the true spirit with which Aubrey C. Daniels – Father of Performance Management - has coined the word Performance Management.
Ask someone what constitutes PMS? We will have different shades of definitions from different people depending on their experience. Whenever I read the word PMS following questions come to my mind.

Is PMS is of measurement only? Is PMS to drive, measure, and reward? Does it include Compensation and Benefits? Why is training not part of PMS? Where will you place the Rewards & Recognition in the PMS architecture? How will an incompetent manager or a leader who play those roles for whatever reason impact the PMS at org. level?

For somebody to perform to their potential and to increase their capability continuously, PMS alone will not help. While PMS certainly measures some of the attributes and deliverables and gives a high-level picture about somebody’s performance, what we need to have is a comprehensive system to make people perform at their best.

I call it as “Performance Enabling Ecosystem” [PEES].
Wikipedia says - An ecosystem is a community of living organisms (plants, animals and microbes) in conjunction with the nonliving components of their environment (things like air, water and mineral soil), interacting as a system. These components are regarded as linked together through nutrient cycles and energy flows. As ecosystems are defined by the network of interactions among organisms, and between organisms and their environment, they can come in any size but usually encompass specific, limited spaces.

HR and CEO of the organization should work together to build an ecosystem which will help and encourage the people to enable and move to the next level depending on their competencies from the current state.

Drawing an analogy from the definition above, PEES should be a system with subsystems like Training, Leadership quality of the people who lead operations/deliverables, Compensation and benefits based on the competency, Rewards & Recognition (R&R).

Each system should have its own size and encompass specific, limited space, but neatly integrated with other systems to maintain the balance of the ecosystem.
In essence, People will be interacting with systems and are being linked together through nutrients cycles and energy flows like organizational objectives, organizational values, organizational goals, and personal ambitions.
HR should be a custodian of the all these systems and should be an underlying connector between the systems in the ecosystem.

If we have established PEES, the system should track and answer how and why a particular resource is a great performer or a poor performer?

Let us say, Resource-A has got a rating of 2 on a scale of 4 and is interpreted as just meeting expectations, PEES will look into that holistically like,

a.    What are the trainings Resource-A has undergone versus what Resource-A should ideally been undergone?

b.    What was the motivation level, how did all other resources performed under a particular leader with whom Resource-A too worked?

c.    Had Resource-A been provided enough support by the leader?

d.     Were all the tools available for Resource-A to perform better?

e.    Were there any emotional issues which limited Resource-A performance? Did somebody helped Resource-A to come out of the emotional issues.

f.    How is Resource-A being compensated currently? Is Resource-A is seeing any benefit in performing well?
The list continues and we will talk about establishing the linkage and ecosystem separately.

So, having mere PMS alone will not be sufficient to make people perform better or drive people to perform better. The system has to be balanced, holistic, and interwoven with subsystems like an ecosystem in order to develop people to become great performers from being performers.

“It is much more difficult to measure non performance than performance.”
                               -- Harold S. Geneen, former CEO of ITT