Ratingless Performance Management: Innovative Change to Minimize Human Behavior Roadblocks

By Tom Stypulkoski

Organizations are experiencing a fundamental shift in generational expectations surrounding the employee/company relationship. The long term, assimilating behaviors that companies expected from the Baby Boomer and Gen X generations are quickly being supplanted by Gen Y and Gen Z preferences for accelerated skill development, workplace flexibility, and empowerment. New workplace dynamics will require companies to quickly evolve their employment practices to maximize employee engagement. Focusing on skill and career development and their linkage to effective reward systems can play a key role in evolving performance management. "Ratingless Performance Management" provides succinct detail on practical applications that can guide human resource and organization development experts and their companies. This book provides a blueprint for developing and implementing the performance management process and the necessary related system automation to achieve generational change to driving performance, engagement, and sustainable productivity.

• Language: English
• Publisher: BookBaby
• Release date: May 1, 2023
• ISBN: 9781667885964

Book preview

INTRODUCTION

Performance Management has been a foundational, core human resource process for almost a century and has obviously transformed itself through the generations to our current state. And while significant improvements have been made through the decades in enhancing the manager/employee experience to benefit both company performance and employee career growth, there is still a major conflict undermining optimum program success - the clash between process management and basic human behavior.

Organization development experts consistently recognize and espouse the importance of ongoing feedback that minimizes performance surprises and effectively supports comprehensive year-end performance review discussions. But all too often, the pressures of competing priorities with management time and lack of prioritization placed on performance by non-HR leadership relegate the performance management process to a more simplified, streamlined, and mathematical administrative process with an ultimate goal of process completion quickly and painlessly. And often, this process is dictated because of the inevitable ties to performance pay and the pressure it places on performance management process timelines. These pressures have effectively stymied numerous organization development professionals in the endeavor to appropriately realign process priorities.

Significant technological systems advances supporting performance management and compensation processes provide a unique capability to blend statistical performance assessment capability with fluid, ongoing performance feedback. This book solves the utopian performance process that has eluded professionals for decades.

1

HISTORY OF PERFORMANCE MANAGEMENT

I know what you are immediately thinking. No… Please, not another history lesson on performance management. Not to worry. We will not be spending a lot of time on this topic. But we should have a high level, accurate understanding of the evolution of the performance management process to develop and implement an effective and self-sustaining solution.

Many people do not realize that the concept of performance management has existed since shortly after World War I. These processes were in their embryonic stages and didn’t develop into a more formal, structured appraisal system until the mid-1950s. However, the content of these appraisals focuses mostly on a personality-based assessment of the individual versus measuring job performance affecting productivity.

As we progressed into the 1960s, an increased focus occurred on improving the assessment process. First, the emphasis was expanded to not just past performance but also the potential of the employee for performance growth in their current job and future career potential. This time period also saw the introduction of the self-appraisal process, allowing the employee to contribute feedback based on their view of their contributions and growth needs.

Up to this point, the majority of the appraisals were narrative, with little, if any, metrics or rating scales being included. Then came the 1970s, and we experienced increased litigious activity on the negative impact on employees’ careers and earnings based on appraisal subjectivity and opinion-based approaches. At this point, the American workforce experienced an identifiable shift in employee advocacy, with employers now having to be much more concerned with performance appraisal process fairness, consistency, and effectiveness.

More changes occurred in the decades to follow. In the 1980’s Jack Welch famously introduced the concept of forced ranking at GE. The goal is to reward top performers while also having an ongoing approach to weed out poor performers. When productivity gains were an imperative nationwide, significant attention surrounded this approach. The 1990s brought about an emphasis on increasing executive capability in managing and rewarding performance. Then, as we entered the new millennium, expense reduction caused the push for flatter organizations, resulting in reduced tiers and increased spans of control for most managers. These changes increased the difficulty for management to invest the time necessary to conduct effective performance management processes. And from the early 2000s to today, these pressures have only worsened. In each instance where recessionary times occur, belt-tightening emerges, worsening the already tenuous workload to employee ratio and placing more pressure on minimizing time on what are deemed non-operational processes for ones directly affecting the bottom line. While numerous studies have identified the direct link between employee performance/engagement and improved productivity over the last few decades, many organizations have become hesitant to embrace this paradigm in times of critical financial pressures.

Another key HR process that has had a direct link to employee performance is compensation and, specifically, merit pay. From the 1960s to today, the concept of pay-for-performance has grown significantly. In the 1970s, this linkage took a different direction, fueled by the wage controls initiated by the Nixon administration. Increase matrix charts took on a significantly increased level of importance to manage labor costs and, from that point forward, became a mainstay in the pay-for-performance process. And with the advent of performance management process enhancements such as 360 review processes and core competency assessments, more complex matrix approaches were introduced. Some blended scores for objective