Do you really need performance evaluation system in

place- Ask to yourself?

Sanjay Srivastava
When did you realize that you need a performance evaluation system, a process of employees’
evaluation or so called Performance appraisal. This question to be asked to CEOs, entrepreneurs,
and HR Professionals.

Why I’m asking this is because it has become a fashion for the family run organization to have a
performance appraisal system in place. Entrepreneurs from family run businesses discuss among
their peer groups at the coffee table or in parties that someone has started implementing a
performance review system and they pass on the verdict to its HR. companies where HR is a
follower, starts preparing a format and just rolls out. Some HR managers or CHROs are the first thing
they do in their new assignment to roll out a performance system or make some changes in format.
Some introduce 360-degree appraisal and some make some changes like self-appraisal. But do they
really know if they need it at all and why they want to introduce it?

What is the purpose of introducing the Appraisal system?

Every organization needs an identification of performers and non-performers, is the basic reason
behind the appraisal system. Should we have performance evaluation to meet the organization
performance at the desired level? Answer would be “yes”. Basic purpose of any performance
tracking system is to help its people to attain and increase their performance standard to achieve
the organizational performance rather than to categorize the employees as “performers”, non-
performers or dead woods.

Many organizations where performance dashboards are robust, have done away with any formal
performance evaluation system. They are dependent on organizational performance dashboard. If
the organization is doing well, it means its employees are doing well too. If the organization is not
growing or meeting the losses, have no meaning or any individual performance tracking. If the
organization is meeting losses, one standalone can’t be a star performer. This is to promote the
group performance standard.

Then why do we need a performance tracking system? Ideally the need should be to have a talent
management system in place. Purpose should not be to punish or reward out rightly based on the
ratings generated, because in most of the cases ratings are either given based on the last
performance or on personal bias.

Talent management system, is the foundation of the performance evaluation system.

Progressive companies target to have robust talent management systems. Companies having talent
management systems have inbuilt performance tracking systems to evaluate the individual
performance and the group performance. They use the appraisal results to manage their talent pool
and their contribution in Organizational health. Organizational health is dependent on the talent
pool, therefore, major focus should be on the gap of talent or the competency required to meet the
desired performance.

Desired performance behaviour v/s Performance Evaluation

Why do we need to track the performances? Why can’t it be automatically at the desired level? In
my opinion, reinforcing the desired behaviour for performance and feedback system would be the
permanent solution to the performance tracking system. Every organization has different groups
operating at different levels and also their performance which decides the organizational
performance. Companies should have a desired behavioural pattern in place to perform and device a
system of reward on weekly or monthly bonuses on the behaviour shown. Behaviour such as
addressing the rejection level in a week. Managers in many companies have started reviewing
performance on a weekly basis and doing corrections there and then to enhance the performance
standard by changing behaviours.

Improvement and growth approach would be an ideal solution.

Approach of performance should be improvement of an individual and his growth as an individual
contributor. If this practices all across, the work culture itself becomes promising and desired
performance is achieved. But the debate is whether traditional appraisal system to be done away
where the reward is associated and deadwoods are earmarked for weeding out. What should be the
culture of rewarding the strong ones with money and getting rid of the weeks? Can we change the
performance culture by motivating them through coaching?

The traditional evaluation system is good only when human resources are available in abundance.
We may allow the poor performers to go and reward the best one. But this may not be useful in the
current scenario when the shortage of quality manpower is felt everywhere. The better approach
should be to enhance the performance standard through the constant coaching and keep the
reward as per the performance achieved and increased.