Choose the Right Performance Management Strategy
Marissa Mayer has caused another stir with her latest HR stunt. Last month the Yahoo! CEO implemented a forced rankings performance review process at the company, meaning managers rank their employees on a bell curve and fire those at the low end.
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Forced—or “stacked”—rankings have fallen out of favor with some companies. Microsoft recently dumped its controversial forced ranking system in favor of more frequent and qualitative reviews, according to Business Week.
Companies developing a performance review strategy should take their time with this decision that will affect the culture of their business. “If this topic were simple there would not be over 25,000 books listed on Amazon’s U.S. book site for the query ‘performance review,’” Steven Stinofsky writes on Business Insider.
Here are some alternatives—or additions—to forced rankings that companies are using to bolster their performance review schemes.
Employee Review Calibration
Calibration is a face-to-face process, in which managers who oversee similar groups review one another’s employee-performance ratings. In these "rater reliability" sessions, supervisors discuss each of their employee’s performance rankings and their reasons behind the evaluation. "A calibration session catches the 'easy graders' and 'tough graders' and helps them rate their employees more realistically," Joanne Lloyd writes on JobDig.com.
Instead of relying on one supervisor to evaluate an individual’s performance, some companies ask everyone with whom the employee interacts to weigh in. That’s the idea behind 360-degree feedback, a technique that collects performance data from a number of stakeholders like team members, customers and direct reports. “When it’s done well, 360 programs allow all your team members to improve in key areas that might be limiting their upward career path or actually causing major conflict within a team,” Eric Jackson writes on Forbes.
Employee Management Objectives
First outlined by management whiz Peter Drucker, management by objective occurs when supervisors work with employees to outline goals and desired outcomes. Managers evaluate staff members based on their ability to achieve results. The advantage of the MBO process is that it allows employees to actively participate in goal setting, according to the Society for Human Resource Management.
Peer Review Solutions
As the term implies, peer reviews require co-workers to comment about each others’ performance. “Coworkers often know more about their peers' strengths and weaknesses than supervisors do, and letting employees review one another is a great way for management to share in that knowledge,” Stephanie Gruner writes on Inc.
Companies in India have used these approaches for decades, but they’re continually experimenting with new feedback iterations that combine input from employees and their peers. Cornerstone provides talent management software that makes collecting performance information easier than ever, and provides management the tools they need to make the best succession decisions.
There has been some heated discussion on LinkedIn recently around forced rankings. One contributor reminds us, “It really doesn't matter what form is used; what matters is how it is used and what the results really mean.” It’s hard to judge one company’s forced rankings system without understanding other programs that might support or counter balance it.