Performance Evaluation Trends
Since strategic human resources management has found application in companies, we see that performance management systems and practices have been changing and developing in accordance with the general management strategies of companies.
Until the last 10 years, internal company performances were limited to evaluating, grading and ultimately remunerating employees. Although these practices continue as the basic processes of performance management, in recent years “MBO (Management By Objectives)” has been implemented, training and development, effective feedback system, competency-based evaluations, development planning according to performance outcomes and all these functions with objective results. Employee-friendly and objective applications that support performance management and evaluation, such as digital application platforms that calculate and report, have been implemented. Of course, its applicability and even how much it is implemented is a separate matter of debate.
Without going into the history of performance management practices, it will be enough to look at the practices in many medium-sized companies today. Because it can be said that the practices in the 1950s – of course not in our country, because performance was not something that could be evaluated in those years! – are still continuing. If we list a few items for the features of these evaluation systems;
- Behavioral characteristics desired by the company, such as leadership, reliability, managerial skills and loyalty, are taken into account,
- It is not clear what is required from employees or they are not directed towards concrete goals and the requests remain hypothetical,
- There are no job-specific evaluations, it is not clearly stated what needs to be achieved in each job,
- It is mostly the individual opinions of managers that dominate,
- It is not exactly known what to do/how to evaluate the available data (performance outcomes). There is mediocre data, but it has not become functional.
- One does not usually look under the iceberg, time is wasted with the negativities on the surface,
- The training required as a result of performance evaluation is generally not target-oriented and specific. In fact, training planning is often not done, it remains only as a “to-do” topic in a meeting.
In addition to the above items, the following table is summarized for performance evaluation process problems; (Örücü,Köseoğlu,2003)
Table.1. Performance Appraisal Process Problems
|Problem of person(s) to evaluate
|The problem of whether to evaluate the individual characteristics of the employee, the amount of work, or all of them
|The problem of objectivity of evaluation
|The problem of to what extent the evaluation results will be reflected to the employees
|The problem of the number of people to evaluate
|The question of which process the evaluation will take place in the works
In 2014, Sharon Armstrong, founder of the Human Resources and Management consultancy company, gave a BLR® webinar titled “Stress-Free Performance Appraisals: Increase Productivity, Engage Employees, and Retain Top Talent” and summarized 10 performance rating mistakes to avoid as follows (hrdailyadvisor .blr.com, ”Performance Appraisals: The 10 Most Common Rating Errors ”,2014);
- Central Tendency. It is an easy but wrong practice. It evaluates everyone based on intermediate performance criteria to avoid extremes of good or bad performance. It’s not fair to employees who are actually putting in the effort, and it can be demoralizing.
- Nepotism. Ignoring the flaws of preferred or “good” employees, especially employees everyone loves.
- Grouping. The widespread perception that “everyone is doing it” is an excuse for substandard performance.
- Halo effect. Allowing a positive work factor you enjoy to influence your overall performance evaluation.
- Hold a grudge . A dangerous luxury that could land you in court. Never try to make employees pay for past behavior.
- Horn effect . It’s the opposite of the halo effect – allowing one negative work factor or behavior you don’t like to color your thoughts about other factors.
- Prejudice . Letting your bias affect the rating. Prejudice, race, national origin, gender, religion, age, disability, hair color, weight, height, intelligence, etc. It may arise from attitudes and ideas about you.
- Innovation . Rate only the final performance, good or bad. Data should be representative of the entire review period. If you don’t keep good notes, you may not remember the entire semester.
- Sunflower effect . Rating everyone highly regardless of their performance to make yourself look good or to give more compensation.
These items can be increased. Keeping these items aside, let’s do a brief case study and then look at the practices and trends of developed/developing companies.
”The performance evaluation table example below will be familiar to companies. In theory, evaluations are objective and goals are concrete. However, in practice, there continues to be a system that employees consider to be subjective, oriented towards unattainable targets, and left entirely to the individual decisions of the manager. Because it’s just a form! Scoring is done, in some cases, they are compared with other employees, manager/supervisor opinions are taken and – if the company has a more corporate structure – feedback is given and performance interviews are held and wages and rewards are made according to the results, sometimes forming a cover for the argument for dismissal. So, did the performance evaluation really produce the desired results?
Table 2. Example of Traditional Performance Evaluation Form
|Department: Sales Marketing Evaluator: Ms. Zeynep
Name Surname: Mr. Ahmet Position: Sales & Marketing Manager
Position: Sales Representative Period: 06/2020
|Performs work requested by managers
|Job Knowledge is at a level to do the desired job.
|Completes jobs on time and to the desired quality
|He has good communication with his managers and teammates
|Open to Development
|Is prone to team work
|Takes initiative, self-confidence is at optimal level
|He has strong internal motivation and does the job with enthusiasm.
|Easy to learn and apply
|Presentation skills are good
|TOTAL PERFORMANCE SCORE
A USUAL EVALUATION CASE WE ENCOUNTERED
The performance evaluation made once a year in medium-sized (186 Employees) Company A was evaluated in accordance with Table 1 above, and sales representative Mr. Ahmet received 65 points out of 100, which is the target score. Thereupon, department manager Ms. Zeynep held a “feedback” meeting with Mr. Ahmet. Accordingly, an agreement was reached to improve the criteria in which it received low scores (weakness). Mr. Ahmet accepted that he was deficient in the areas in which he received low scores and requested training in these areas. In the evaluation method;
- The department manager was chosen as the evaluator.
- Performance evaluation is made once a year and Table.1. The same criteria are distributed to all sections in the form. There are no different target distributions according to departments. Behavioral and skill criteria are the same for each section.
- KPIs exist but do not match the performance criteria.
- The information required to analyze the results and benefit from historical data is scattered in forms and Ms Office files. Reporting cannot be done digitally.
RESULT: INCOMPLETE AND INCORRECT EVALUATION
The “grading” method exemplified above is one of the most common methods in practice. However, at what points are the mistakes, which are the subject of the article, made? Let’s ask the questions for critical points and describe a few error items to analyze.
- How objective is it?
Since it is usually a manager who evaluates performance, personal feelings and thoughts may come to the fore. Additionally, a single person’s evaluation prevents a multifaceted perspective and cross-interpretation.
- How Effective is it?
First of all, even if the intended purpose is a real performance evaluation, these methods, which are applied as completing a checklist on simple forms, ultimately remain a part of procedural practices. Performance outcomes are enabled and stripped of functionality.
- How suitable are the results for analysis?
Unless the results are multifacetedly concretized and converted into numerical data, the analyzes cannot go beyond subjective interpretations. In order to comply with the procedure, it is just a matter of being included in the planning list with a few sentences . Since the data is not transferred to the digital environment, concrete reports and outputs cannot be obtained. Although the accuracy of the data is debatable, loss of time is also reflected as a separate negative.
- How sustainable is it?
The analyzability and concretization of performance evaluation outputs depend on their sustainability. The data obtained should be a reference for evaluations to be made in the following periods and create a correlation between them that can be interpreted. Sustainability can thus be achieved. However, in this case, objective and versatile data cannot be provided to ensure the sustainability of the evaluation system . For sustainability, it would be appropriate to digitalize the data in the system, and to achieve digitalization, it would be appropriate to transfer the relatively more objective and versatile data of the 360-degree evaluation as input to the system and to create data for interpretable correlations.
- What benefits did the application bring to the company and the employee?
From a realistic perspective; Many companies today still evaluate performance correctly in theory; We can say that it is implemented incorrectly/incompletely in practice. In the example here, the evaluation made through a form with the rating method is superficial and procedural. He does not question “Why?” or “How?” KPIs are not clear, employees are evaluated based on general performance criteria. This means that performance outcomes cannot be positioned correctly according to company strategies; It cannot reach the target. For the employee, a particularly low motivation problem arises. Incomplete/erroneously determined targets and therefore incomplete/inaccurate, non-specific performance criteria lead to both a decrease in the employee’s performance and an incorrect evaluation.
For example; The performance criterion of “Completes the work on time and with the desired quality” of an employee who gets 2 out of 10 requires serious questioning whether his/her job knowledge is sufficient and receives this score. Examination of correlations between causes and effects, negative dynamics of not getting work output on time, job satisfaction level, satisfaction survey, etc. There should be an evaluation infrastructure that allows multiple inquiries such as Otherwise, we usually encounter; -The employee gets stuck in the cycle of negative performance output – job dissatisfaction – poor performance – negative feedback – negative performance output.
The main problem in the above example lies in the method used and the lack of specificity in what will be evaluated and how, rather than in the performance evaluation system itself. In practice, unless many medium-sized companies, especially medium-sized companies, cannot reduce the performance they try to evaluate with good intentions to the level of “performance management with targets”, the desired results will not be achieved or job dissatisfaction will result for the employee in the long term (Smith, 2016). So much so that in a company where performance evaluations cannot function properly, it is not possible to distinguish between productive and inefficient employees. As a result, it is not fair (Kavi, Koçak, 2011). This will again lead to increased job dissatisfaction, increased personnel turnover rate, and ultimately the inability to retain potential human resources for the company.
TRENDING APPROACHES & GOOD PRACTICES
Inappropriate performance management system and subsequent evaluation of performances, as mentioned above, lead to an unsatisfactory work environment and ultimately to an increase in the personnel turnover rate of companies. Especially, with Generation Z, who has just joined the working life, we are evolving towards a working universe that is intertwined with technology and the internet, can take risks much more easily, and has a very strong potential. In today’s working universe, where generations Y and Z are blended, the rules of business conduct and job satisfaction are evolving at the same pace. While the reflections of this evolution affect the dynamics of company strategies, it is inevitable that it will also affect Human Resources processes. Performance management processes and evaluations, which are among the most important pillars that undertake the task of executing human resources functions, are also evolving by keeping up with the changes in this context. The current classical, standard, rule-based practices and performance interviews with memorized results have now been replaced by “goal-oriented”, motivating, more analytical, more flexible, focused on talents and competencies, and error-free digital solutions, together with Generation Z and young Generation Y. ground applications. Of course, existing and old practices continue in today’s companies. However, we can say that it is not sufficient for the motivation and satisfaction conditions of new generations. Of course, it would be a completely erroneous conclusion to reduce the sole reason for this evolution to the participation of the new generation and changing satisfaction levels. However, it is clear that motivating reasons are one of the most important factors.
America’s most important and well-established analytical and management consultancy company – Gallup, Inc. – states that performance management has five basic goals in today’s business world. These goals are;
- Developing role definitions, goals and expectations of employees and managers,
- Increasing Employee Loyalty,
- Developing managerial leadership and coaching skills,
- Increasing efficiency with improved performance,
- Developing a performance reward program that encourages success.
In line with the stated basic objectives, the steps taken by successful companies to establish a solid foundation of the performance management system are stated as follows;
- Determining the objectives of performance management initiatives. In which field are successful results desired? This must be clearly defined. The following questions shed light on the steps to be taken to achieve successful results in establishing a performance management system;
- Is high efficiency our priority?
- Do we want to identify and develop leaders from within the company?
- Do we want to facilitate payment and compensation processes?
- Are we trying to increase employee retention or engagement?
- Defining and defining each role in the company. An employee needs to know exactly what is expected from him, how he should do it and what the result should be. This is where Key Performance Indicators (KPIs) especially come into play.
- Matching goals with a performance plan. In other words, when setting targets, it will be more feasible to realize the performance plan in a realistic and not too long-term period. Year-round goals fail as long as they are too big and overwhelming for employees. It would be more appropriate to equalize goals with short-term performance plans to achieve the long-term goal.
- Closely monitoring progress towards performance targets. It is important to review key performance areas. It is now inevitable to use relevant metrics and analytics to track how goals are progressing to ensure that interventions can occur as early as necessary. Using digital performance management and evaluation solutions to see all kinds of performance-related metrics and analytics in the most accurate way and to process the results will bring accurate performance management and evaluation results.
- A continuous coaching service should also be included in the performance management process. Coaching support helps identify and solve problems before they become too big. If it doesn’t happen periodically and frequently, there is no point in doing it because it won’t help. It has been stated that in large company practices, coaching-supported performance monitoring is done in monthly or quarterly meetings to help employees stay on the right track .
- Creating a performance-oriented company culture. It is important to ensure that the workplace has common values and cultural harmony. The feeling that shared values, beliefs and expectations among employees are a whole creates a more harmonious and enjoyable work environment.
- Organizing inter-departmental workshops. This helps employees and managers understand what other departments do, how they think, what their strengths and weaknesses are. This method is especially supportive in determining or updating performance criteria. They may discover something new and internal rotations may be done which may help them in future work.
- An effective and applicable feedback system. Feedback should be given in a constructive and actionable way. Management must guide employees towards future success.
- The need for training not only for employees but also for management. It is important for managers to receive and maintain training so that they can improve their coaching skills and lead employees in performance management.
- Performances should be rewarded publicly and frequently. Management cannot expect employees to be motivated if they are not rewarded for their performance, but many companies overlook this important step. Make sure employees are rewarded and recognized for their hard work.
As frequently mentioned, although performance management and performance evaluation processes are different from each other, they are parts of the same function. The steps identified above for the success of performance management also determine the results of the performance evaluation. Also, one of the most important points that should not be overlooked is the Performance management system; While there is no harm in supporting manager/supervisor opinions, feedback and coaching activities verbally/manually, in the performance evaluation process, criteria, KPIs, targets, employee qualifications, numerical degrees, abundance of evaluation methods, etc. Since there are many data that need to be concretized, such as, successful, objective, quantitative and analysis-appropriate reporting of the evaluation process; It depends on how digitalized the evaluation system is.
Throughout the article, we focused on what the performance management system and its functional evaluation systems are/should be like. Before ending our article, let’s take a brief look at the performance management approaches of the world’s best companies;
- Deloitte: Since 2015, they have needed to change their performance management systems and have reconstructed them based on 3 basic understandings. These;
- Recognizing Performance : Recognizing and defining the individual and individual performances of people in each group / department,
- Seeing the Performance : Being able to see the accurate picture of performances without bias.
- Igniting Performance : Helping/supporting employees to develop their performance potential.
- Google: The performance management process adopted at Google is based on an innovative approach that is based on data and analysis, is completely digital, and also supports managers with training. Managers and employees are subjected to an evaluation system that is future-oriented and parallel to development goals. Emphasis is placed on the OKR (Objective Key Results) system and employees are subjected to this system. By using this system, goal setting processes are revised, which gives very good results.
- Facebook: Facebook has a performance management process that places great emphasis on one-on-one feedback. It actively uses this feedback system in semi-annual performance meetings to see how well the teams are performing and to understand where cooperation is taking place and where it is not. They also developed in-house digital software to provide continuous, real-time feedback. Thus, issues are resolved before they become problems.
- Adobe: Employees are frequently given pulse surveys to evaluate the leadership performance of managers.
- Cargill: Instead of classical performance management systems, it has implemented the Daily Performance Management System with an innovative perspective. Features of this system; It is based on being continuous, focusing on a positive employee-manager relationship, and turning daily activities and feedback conversations into action instead of dwelling on past actions. The implementation of a daily performance system has achieved positive results in professional development in 69% of cases, and in a feedback system in which employees feel valued in 70% of cases.
As we conclude our article, we find it useful to summarize; Performance management and evaluation systems, like all human resources functions, are constantly developing and evolving. The main issue is; Rather than trying to introduce and implement all new trends, we design the system that best suits the company culture, company scale and employee profile;
- Simple and easy to apply,
Strengthened with feedback system,
- Including the evaluation of managers,
- It has a flexible structure that can renew itself when necessary,
- It is to have a structure that is digital, that is, can be evaluated, tracked and reported through systems.