It is that time of the year again.
The final numbers are in and are being crunched at the firm, division, and individual levels against the set targets of the top line, bottom line, zonal, individual targets, etc. In a few days, every organization will kick off its annual Performance Management review. It is time to review the performance of the performance management system and the process.
Performance Management Process over the Years
There are multiple ways an organization approaches the performance review process.
The most typical and widely used is the bell curve. In a bell curve employees are placed in buckets of below average, average, and excellent based on their performance. The farther the employee is from the middle, the less their performance and hence the bonus earned, promotion, growth, etc.
Other performance review techniques include Management by Objectives (MBO), balanced scorecards, peer review/feedback, etc
General Electric’s Jack Welsh had built a validity model for employee performance described as the 20-70-10 system. The top 20% are the most productive, 70% do vital work and the bottom 10% is unproductive and need to be discarded from the team.
Depending on where you are in the performance grid, it is either annus hornbills or annus mirabilis!
With the change in times, nature of work, and demand for talent outstripping supply, is it time to review the performance management system itself?
Especially, the performance review of the frontline workforce, is easily the largest group in any organization.
Performance Review of Frontline Workforce
The frontline workforce constitutes the largest group of employees in any organization. These employees are in sales, customer service, and operations and are in touch with the customers directly impacting the business outcomes. How their performance is reviewed impacts the customer and hence the organization directly.
TMI Group in its research found the following while reviewing the performance of the frontline workforce in different sectors.
Employees in the same zone, branch, and the same residency in the system have performance variations
The performance variation is sometimes 4 to 25x from the top to the bottom performer.
The performance variation is despite the same manager, and inputs in terms of tools – training, compensation, etc.
Every organization applies the Pareto principle and declares,”20% of the team delivers 80% of the performance”. If so, why the organization is carrying the burden of 80% non-performers?
Questions to ask?
Are we setting the right parameters to measure?
What are the inputs being given to the frontline workforce to perform?
What are the outputs being measured?
How do the individual outputs rolled-up to that of the reporting manager, zone, and the organization itself?
In the next few blogs, we will share the findings of TMI Group’s research on frontline workforce performance management and suggest a different way forward to meet the needs & challenges of the business world.