A Gallup study found that eight out of ten employees feel that the traditional system of performance review does not function as a factor of motivation to them. Performance management practices adapted by some of the leading companies in the world have been illustrated below: -

1. Google

“We need people to know how they’re doing, and we’ve evolved what might at first seem like a zanily complex system that shows them where they stand. Along the way, we learned some startling stuff. We’re still working on it, as you’ll see, but I feel pretty confident we’re headed in the right direction. And with any luck I can save you some of the headaches and missteps we had along the way.”– Laszlo Bock, SVP, People Operations, Google.

Ranking and sticking to an annual timeline have never been a part of Google’s technique. Instead, they focus on goal-setting and motivating employees to meet those goals, all the while looking at specific Objectives and Key Results (OKRs).

2.  General Electric

“It existed in more or less the same form since I started at the company in 1979. But we think over many years it had become more a ritual than moving the company upwards and forwards.” –Susan Peters, Head of Human Resources, GE.

There is a purpose to the meeting between GE’s Managers and employees of held once a year - employee’s future goals. The company has also launched an app to help with regular feedback, and, is being used by more than 80,000 people.

3.  Cargill

Cargill utilised constructive feedback to ensure that the workforce identified the wrongs so that they could handle the situation in a better manner in the future. The company enforced the suggested process in writing to assess the situation and the proposed solution in the right manner.

4.  Eli Lilly

Eli Lilly is one among the world’s leading pharmaceutical companies for a reason. The performance management process is amazing since the company has remained big on best practices, and, stuck to implementing progressive benefits and perks by encompassing the theme of employee trust and empowerment.

5. Adobe

Adobe utilises a process that is aimed at inculcating employee and supervisor conversations towards engagement and empowerment. The practice which is in vogue since 2012, includes setting priorities, understanding the role of HR and providing resources, and, has resulted in a ten percent jump in employees indicating that the prevailing system of feedback aids their performance.

That performance reviews are no longer a one-time event, and, a system of continuous feedback works to enhance employees’ performance has been derived from global giants such as Airbnb, Facebook, Google etc. With such a premise to performance, leading companies in India have completely steered away from Bell Curve since force-fitting employee performance has gained significance. These companies have started making use of quarterly feedbacks and real time performance monitoring to assess employee performance.

Ideally, performance management should happen every day. Maybe we will not like it if our boss waits until the time of appraisal to point out our flaws, which may well have been communicated to us a lot earlier on a timely basis, and, could have benefitted both the organisation and the employee. It was estimated by Josh Bersin, Principal, Bersin by Deloitte, that 70% of MNCs are moving away from the outdated approach of annual reviews to manage performance. Many technology firms such as Dell, Microsoft and Adobe are leading the way. Even GE has decided to drop the bell curve and use some real time performance management tools. The research has identified that an estimated 52% companies conduct annual performance reviews.

On a fine Thursday around 3.00 P.M., there is a knock on the Manager’s door -

Zoya: May I come in?

Manager: Hi Zoya. How are you?

Zoya: I am doing great, but to be honest, I’m a little tense and nervous at the moment!

Manager: (Smiles) I understand Zoya, That’s absolutely normal. I get tense before my reviews too. Zoya, we highly appreciate the contributions you have made so far- the way you handle our customers have been well applauded. You were able to handle customers in a variety of situations. And, you also ensure that the work environment is good, and the office a good place to work.

Zoya: I am glad to hear this. Thank you.

Manager: I appreciate your performance all through the year. You have performed well in some areas, but, there are a few areas which need improvement. Overall, I am pleased to acknowledge that it has been satisfactory.

Zoya: Satisfactory? You said that the customer surveys indicate customers are very happy with my service!

Manager: Yes, absolutely! You truly deserve a lot for getting amazing results on customer surveys! Your ability in handling customers not only reflect your skills, it is also a motivating factor to your team members.

Zoya: Then why is my performance considered as only satisfactory?

Manager: Though the quality of customer service is very high, the cost incurred by your department is way over budget, indicating a fall in efficiency.

Zoya: Yes, I agree that we are slightly over budget, but, we have to keep our customers happy, right?

Manager: Of course, Zoya. I understand what you are saying, but, we also have to keep a check on the costs incurred. Even the average calls handled by the customer service personnel has fallen from 13 last year to 8 this year. You should also tell your team about the quantity of calls handled.

Zoya: I don’t understand. I am working as hard as I can, and, I just don’t see how I can do any better.

Manager: If you wish, I am happy to sit with you and try to find out ways to save costs in addition to maintaining service quality.

Zoya: In that case, may I also know the hike you have decided for my performance?

Manager: Effective immediately, we are jouncing up your pay by 6 percent.

Zoya: I think I deserve more. I really expected more.

Manager: You are really capable. We will certainly think of a good hike the next time, meanwhile, you can concentrate on how to improve the quality of calls with cost effectiveness.

Zoya: Well, I will do whatever I can. But, you could have told this much before instead of waiting for my appraisal.

Manager: Thank you, Zoya. I appreciate that. I do appreciate your work. I appreciate having you working with us.

The meeting ended. However, the Manager was really worried for having waited until the time of appraisal to communicate employee performance. He was asking himself as to what went wrong, and, whether he should have told this well before time, and, if the goals were not set by him clearly.