The performance appraisal implemented by many domestic enterprises is actually only a link in performance management. Complete performance management should be a cyclical process, including performance goal setting, performance coaching, performance appraisal and performance incentive. Lin Guangming, director of human capital consulting at Mercer Consulting Shanghai, pointed out that the biggest difference between the two is that performance appraisal is to review past performance at the end of the year, and even some companies hastily formulate assessment standards, terms and weights at the end of the year, with the aim of focusing on; Performance management, on the other hand, is forward-looking and process-oriented, and usually takes one year to complete the whole process.
Every employee needs to set a performance goal at the beginning of the year, and then the immediate supervisor will guide and adjust him irregularly, check the completion of the goal and existing problems, make a review and feedback in June and July of that year, and finally make an evaluation at the end of the year to link the performance results with the incentive mechanism. If the counseling and feedback are done well and the performance is continuously monitored and developed during the performance year, then the year-end performance appraisal is only a formal discussion form, and the pressure will be greatly reduced. Lucy Zhou, a senior consultant of Hewitt, said this.
Sub-rule 1: goal decomposition and formulation
This is the initial link in the process of performance management. Whether the index design is reasonable or not determines whether the enterprise can achieve its strategic goals vertically and consistently. Most consulting companies, including Mercer, Hewitt, Boyman and Stansted-Zhuo Yuan, invariably put forward that the whole enterprise should first reach an understanding of the vision and long-term strategy. It is an important added value of performance management to convey the company's strategic objectives from top to bottom. Lucy Zhou stressed.
According to the survey, only 10% of enterprises can implement strategic objectives as planned, and 90% of them will eventually be abandoned. For individuals, the traditional performance goal setting is based on job responsibilities. It is possible that everyone's job responsibilities have been completed well, but it has nothing to do with the company's goals and the overall strategy has not been completed. This leads to disconnection. The correct approach is not bottom-up accumulation, but vertical decomposition of individual performance goals from corporate strategy. Dr. Sun Yongling of Boyimen Consulting pointed out that from the perspective of strategic decomposition, the human resources department is obviously in a weak position and needs the intervention of the company's top management to achieve cross-departmental promotion.
The next year's goals put forward by enterprises, such as improving customer satisfaction and management ability, are mostly abstract to employees and do not provide a clear definition for their work, which leads to difficulties in implementation. Lenovo's practice in this respect is worth learning. Lenovo holds a company strategy formulation meeting and a decomposition meeting every year. This meeting is not just an armchair strategist, but a communication and education meeting from top management to business departments, from business departments to specific operation departments, and from department heads to employees. The result of the meeting is that the company's strategic objectives go deep into every employee and let them know what to do and to what extent.
Through layer-by-layer decomposition, each employee will get several tailored key performance indicators, namely KPI. Lin Guangming analyzed that different KPIs drive different behaviors, and the setting of weights also determines whether employees' work can be consistent with the company's strategic direction. Taking the barber shop as an example, he explained that if the strategic goal is to improve customer satisfaction and attract more customers, the membership card sales index of the barber shop will be too heavy, which will cause customers to resent and damage the image of the whole store; In order to adjust the deviation, the number of regular customers should be appropriately increased at this time to urge hairdressers to improve customer satisfaction.
Another example is the performance management of sales staff. The simplest indicator is of course sales. But according to the company's different goals and priorities, it can be refined. If we attach importance to the promotion of new products, then the index weight of new product sales ratio should be higher; If it is required to develop new markets in the near future, the index weight of new market sales ratio should be increased accordingly.
When decomposing indicators, we should also consider the balance between business indicators and behavior indicators, and between outcome indicators and process indicators. In short, it is to prevent employees from doing whatever it takes to accomplish financial tasks. For example, in order to improve this year's performance, someone may affect next year's work or harm the interests of other colleagues. Through behavioral indicators, the employee's workflow conforms to the constraints of corporate culture and values.
When designing indicators, Lucy Zhou will conduct behavioral event interviews with department managers and high-performance employees to discuss what behaviors incumbents need to show beyond business indicators and what value-added points they provide to customers, and formulate a series of behavioral labels accordingly. Employees can understand the enterprise's behavior expectation, and link it with the performance appraisal system in an appropriate way, which will change employees' behavior and way of doing things, such as the change from passive to active, from control to service.
KPI indicators are both quantitative and qualitative, which are the so-called hard indicators and soft indicators. For example, behavioral indicators and process indicators are difficult to quantify, while indicators such as customer satisfaction and brand influence are sometimes difficult to obtain accurate data. There is no need for enterprises to blindly pursue quantification. Lin Guangming reminded that some subjective factors are inevitable in performance management. Quantification for the sake of quantification will make this index system complicated and ridiculous. In addition, the consultant suggested that employees' performance indicators should not be too many, generally 4 to 7, with a maximum of 10, otherwise, not only the key points are not prominent, but also the managers are not good at following up.
Section 2: Performance Coaching and Tracking
All managers must guide their subordinates and help them improve their performance. And this link is the most lacking part of enterprise managers at present. Dynamic performance management needs to be tracked all the time, but many managers find it difficult to stick to it, so they leave it aside when they are busy, let alone hold counseling meetings to communicate with employees. What the consultant feels most helpless is that once the consulting project is over, it seems that this performance management work is over.
The performance management of enterprises is easy to go into many misunderstandings in this link. First, there is insufficient continuous communication, which is difficult to implement among employees. Enterprises often set up a complex and accurate system, but employees don't understand their intentions, so why use these indicators to measure themselves? Lin Guangming pointed out that the goal setting of specific employees inevitably requires the communication and counseling of direct supervisors; It is necessary for both sides to review, feedback and adjust the objectives from time to time. Dynamic performance management focuses on the relationship between managers and employees, not exams and exams, but designing the future together, involving employees and promising to do their jobs well.
Second, the sense of participation and management level of middle and senior managers are not enough, and they think that this is only something done by human resources departments or consultants. In fact, consultants can only help in the establishment of the system and the design of key indicators; It is impossible for the human resources department to know the performance goals of hundreds or thousands of people in the whole company, and generally it has no right to supervise the implementation of each department. Many managers think that establishing a system is enough, or regard performance management as a simple assessment. The data seems to be generated automatically, Lucy Zhou said. At the end of the year, you can grade it casually, but there is no management process, and you will definitely fail. If the company's top management can't set an example to do a good job in the performance management of department managers, it will naturally not pay attention to the work at the grassroots level. As a result, performance appraisal is only aimed at grass-roots employees, not managers, which often leads to the failure of performance management.
Third, we don't pay attention to the collection of management information data, especially the data of process and strategic indicators can't be obtained smoothly. Without data, management cannot be carried out, forming a vicious circle. Sun Yongling suggested that, especially for large-scale enterprises, IT is best to establish an IT system to record and collect data, otherwise manual tracking will be very heavy. But she also stressed that the system is only a platform, and the awareness and ability of managers to use the platform for management is the most important.
Sub-rule 3: Performance comparison and evaluation
Performance management is carried out from top to bottom in principle. Therefore, in the assessment process, it is basically the manager who evaluates the subordinates, and the subordinates give feedback, combined with two-way communication. At this point, the practice of grading supervisors by subordinates is generally not adopted.
Traditional assessment, set the same benchmark to measure everyone, and compare the advantages and disadvantages according to the score; Performance management is tailor-made for everyone, and everyone can see how they accomplish it against their own goals. Some enterprises have not changed their concepts. They not only set performance management objectives, but also make horizontal comparisons, compulsory distribution and even elimination at the bottom. It is difficult to justify themselves in communication with employees. Lin Guangming said, for example, that an employee has achieved his sales target, but others have overfulfilled it, which doesn't mean that he will fall behind in the ranking. This is the contradiction between the two concepts. He believes that if the last elimination system must be implemented, employees may try their best to let a colleague fall behind instead of trying to improve themselves. This obviously can't achieve the purpose of improving the performance of enterprises.
Sub-rule 4: Performance Award and Development
After obtaining the assessment results, it must be linked with the incentive system and ability development plan in time to play a role. Performance management is the foundation of other human resources work. The consultant pointed out that performance salary increase and floating salary are based on this, which increases the transparency of enterprise decision-making; The training department can obtain more accurate information, analyze the shortcomings of employees' unsatisfactory performance, and summarize the priority training needs; In the selection of reserve cadres, we can also get strong support from performance records, because the performance in the past few years usually indicates the potential development direction in the future. While employees help the company realize its strategy, individuals should certainly benefit, so that they are more motivated to achieve the company's goals. Sun Yongling thinks that only in this way can the whole system run smoothly.
In most state-owned enterprises, this is not the case. Lin Guangming introduced his own experience. He said that even if the department manager had a good evaluation of employees' performance, he had no right and freedom to provide employees with bonuses or training opportunities, so obviously performance management could not achieve the expected results. Therefore, the higher the degree of marketization of enterprises, the easier it is to succeed in this respect.