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Redesigning Performance Assessment within the 21st Century Organization

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The HR function is going through a process of redesigning its value proposition. Changes occurring at break-neck speed in the working world and in the business environment at large are forcing people management activities to be rethought to see how it can now bring value to an environment dominated by uncertainty and volatility.

Part of redesigning the HR value proposition inevitably involves rethinking a major chunk—if not all—of the HR management processes prevailing in many organizations over decades.

Begin the change with the performance assessment process

One of the processes that need to be reviewed more urgently is performance assessment. This process has traditionally been used to evaluate-measure the level of attaining results among employees in their respective positions.

By and large, albeit the risk that always comes with generalizing, most of the performance assessment processes possess the following characteristics:

  • A structure of goals divided into three blocks: corporate or organizational goals, departmental or business unit goals, and lastly, individual goals set for each employee’s job.
  • The assessment process usually consisted of three phases:

o   Goal setting: the manager and the employee agree on what the employee’s goals (especially individual ones) should be for the next 12 months as well as defining the achievement gap or in other words, the indicators to use for checking whether goals have been achieved or not.

o   Mid-year review: a point halfway in the process, when the manager and the employee must meet up to review the degree of achievement of these goals.

o   Final assessment: closing phase in which both actors come together again for a meeting focused on the final assessment on how well the goals set at the beginning of the year have been achieved.

  • Most models have a block of “what” type of goals for quantifying the qualitative achievements and another block for measuring the “how” type in order to evaluate the so-called soft side of performance.
  • The HR department’s role is to supervise the execution of the different phases and to ensure that all employees have their goals assigned properly and that in the intermediate and final phases of the process, the manager and the employee meet to discuss the employee’s performance.
  • More sophisticated performance assessment processes also include a section to define the employee’s expectations for career development and even training needs according to the employee’s interests.

The final assessment score is usually a quantitative result based on a typical 1 – 5 scale from combining the quantitative “what” achievement with the qualitative “how” valuation. The final outcome usually results in three levels of accomplishment or achievement: High performer, Achieve expectations, or Low performer.

It does not take much effort to understand the reasons why a performance assessment process with such characteristics is nowadays a process of little added value. However to eliminate any possible doubt, it’s enough to list scenarios which should, at least, encourage rethinking the process still in place in most organizations:

  • The volume and complexity of factors, circumstances and situations that can arise any time in the goal setting phase through to the final assessment phase is now so vast. So to think that the goals defined at the onset will remain unchanged throughout this period is pretty much a castle in the air. For the same reason, it is simply ridiculous that discussions on the degree of accomplishment of annual goals come down to only two specific dates over twelve months of the year.
  • The idea of setting departmental and job-specific goals made sense in an organizational model based on utterly fixed and static work. This is something that is now distancing more and more from a reality in which departments, business units and professionals work in an interconnected way. As such, the impact of what one does not only affects one’s own department but many more stakeholders.
  • The "How" used to be linked to generic "soft" competencies, competency models still prevailing in most organizations and include skills of doubtful legitimacy to input and generate value in an environment that is infinitely more complex and profoundly more ambiguous.
    Attempting to incorporate expectations for professional growth into the process, and even more, to indicate the training needs in order  to match this expectation for growth made sense in professional environment of relative safety and stability, but precisely both these attributes have died out among most professionals working in recent years

Measuring what the work done has achieved, has been, is and will continue to be a critical factor for any organization. But what is even more critical is to do it according to the new reality of the working world, otherwise the process—as it does today—ends up becoming a process with little chance of measuring the real contribution of any professional working in the knowledge economy.

The most advanced organizations in their respective sectors have already understood how this process lacks value. Some have proceeded to eliminate the process directly; and others are redesigning it. With no magic formulas or recipes for all cases, the truth is that a performance assessment process seeking to bring value into the knowledge economy of the 21st century should at least consider the following aspects:

  • Incorporate goals linked to participation in projects rather than to carrying out specific tasks.
  • Define goals to measure value generation in the internal and external community and not just in a closed department.
    Transform "assessment meetings" into conversations of constant value to be developed on a discretionary basis between manager and employee, peer to peer, or among any of the agents for whom the employee generates value: clients, partners and communities.
  • Translate career development expectations into personal and professional "purposes for realization", in other words, translating "what I want to achieve" into "what impact I want to achieve professionally in the long term".
    Incorporate extreme flexibility for changing, modifying, altering or even eliminating goals at any time and under any circumstances, bringing liquidity into the way goals are envisaged while eradicating the existing solemnity and solidity.
  • Play down quantitative in favour of qualitative; not just by assigning a greater weight specifically to the “how” , but also getting rid of the customized numerical representation of the results obtained and of course, assess employees qualitatively within the organization in order to understand a process with a greater focus on the purpose than merely obtaining a number.

It is logical to think that HR professionals, as the current "owners" of the process, should be the ones to rethink whether the process makes sense and ask the right questions to come up with a process that offers real usefulness to organizations and their employees in the current environment. It is likely that in the in the activity of redefining the process itself, HR may discover that assessing performance among employees and the organization is not a function limited to the people management field, but rather a responsibility spanning out to and shared by all individual members of the organization. This reality encourages yet another rethink about the role of HR in the near future.

Andrés Ortega

Andrés Ortega es Licenciado en Sociología en la Universidad Complutense de Madrid, Master en Dirección de RRHH en el Instituto de Empresa, y Executive Coach por la Escuela Europea de Coaching. Experto en gestión de personas y procesos de gestión del cambio en Organizaciones. Su actividad profesional desde el año 1998 siempre ha estado ligada al área de gestión de personas. Ha liderado la función de RRHH en entornos locales y multinacionales en diferentes empresas: ALSA & National Express (Transporte de viajeros) como Director de desarrollo de RRHH y Adjunto a Dirección de RR.HH. Sandisk Corp. – Director de RRHH en la Mobile Network Division, en Maersk Logistics (División Logística del Grupo AP Moller Maersk) cmo Director RR.HH para Iberia, Francia y Maghreb y liderando proyectos europeos y globales en procesos de innovación en RR.HH. También ha desarrollado su actividad profesional consultoría estratégica de gestión de RR.HH. como Director asociado en Humannova consultores y como profesional independiente desarrollando proyectos de innovación en gestión de talento y trasformación digital. En la actualidad es Head of Talent & Learning en ING Bank para España y Portugal. En paralelo a su actividad ejecutiva en el área de RR.HH participa, co-lidera y dinamiza diferentes proyectos: Gerente de Innovación en RR.HH. en la Fundación Personas y Empresas del Grupo BLC. Miembro de la Comisión de Innovación en la Asociación Española de Directores de RR.HH. Co-fundador de The People Club, iniciativa de gestión del conocimiento multidisciplinar a través de las personas, co-organizador de TEDxAlcarriaSt y Profesor asociado en The European University y en el Senior Management Program in Digital Talent de ESIC.

Andrés Ortega holds a BA in Sociology from the Universidad de Complutense in Madrid, and a Master’s in HR Management from the Instituto de Empresa business school, and trained as an Executive Coach at the Escuela Europea de Coaching. An expert in people management and change management processes; his career ever since 1998 has always had close ties to the people management field. He has held posts in HR Management in various local and multinational companies in different organizational environments, ALSA and National Express (Travel Transport) as HR Development Manager and HR Deputy Manager (1999 – 2006) Sandisk Corporation as HR Manager in the Mobile Network Division (2006 – 2008), Maersk Logistics ( Logistics Division of the AP Moller Maersk Group) as HR Manager from 2008 to 2013 for Iberia, France and the Maghreb and leading European and global projects in HR innovation processes. He has undertaken consultancy work in strategic HR management with Humannova Consultores as Associate Director and also as an independent consultant developing innovation projects in talent management and digital transformation. Currently he is Head of Talent and Learning in ING Bank for Spain and Portugal. Parallel to his executive activity in the HR field he participates, co-leads and stimulates different projects: HR Innovation Area Leader at the Fundación Personas y Empresas of the BLC Group. Member of the Commission for Innovation in the Spanish Association of HR Managers (Asociación Española de Directores de RR.HH). Co-founder of The People Club, an initiative for multidisciplinary knowledge management through people. Co-organizer of TEDxAlcarriaST and Associate Professor at The European University and for the Senior Management Program in Digital Talent at the ESIC Business and Marketing School in Madrid, Spain.

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