Is Normalization of Performance Ratings required?


Year after year, employees perform with the hope that the organizations will recognize their performance. On the other hand, organizations are constrained by the budget for salary increments that are allocated by management each year. The Human Resources (HR) in most organisations, often finds itself caught between the expectations of employees and the demands of management. Interestingly, the concept of the normal distribution curve is sometimes applied inappropriately or forcefully. Management may use a forced rating system to adjust employees' performance ratings, often overlooking individual contributions. In the worst cases, when forced ranking fails to yield the desired results, organizations may implement cost-cutting measures under the pretext of Normalization.

Who suffers more: employees or organizations?

While it may seem that employees bear the brunt, it is ultimately the organizations that suffer the most.

The million-dollar question is: if both employees and organizations experience negative consequences from the inappropriate use of this concept, why do organizations continue to apply this scientific tool in such an unscientific manner?

 The reason lies in the fact that organizations often lack the proper HR tools to prevent what can be termed "normalization." There are two main reasons for this:                                                                                           

1.       Organizations do struggle to set right KRAs despite having popular concepts of SMART, SIMple, BHAG etc, leading to employees not setting right KRAs and consequently, every employee overachieving on their performance. The main reason is not having the right Performance Management Framework, again despite having concepts like MBO, BSC etc.

2.      Another and perhaps the most critical reason is organizations not having a tool which empowers managers to the level that they can make appropriate decisions while granting ratings to their employees.

Prajjo on its platform has solved both the challenges with its two of the most accoladed Software. These are:

1.     SGR: The Performance management System

SGR that is Strategy, Goals and Review has removed two of the oldest obstacles in making PMS effective.

The first is conducting Goal Cascading. With SGR, now organizations can achieve more than 95% Goal Alignment from the top to the bottom management.

 The second is involving every function where each employee equally contributes to the success of the organization. Organizations can even calculate the value of functions which were marginalized due to not having any practical tool and methodology.

 SGR is a copyrighted product.

 

2.      IMS: Increment Management System

Theoretically, it is the immediate managers who should know the actual performance of individual employees and not the other senior managers in the hierarchy. In practice, the immediate managers receive the least weightage while finally deciding the performance ratings of employees. This happens because immediate managers are not empowered with an appropriate tool, and they end up granting biased ratings; if accepted at face value will lead to higher wage bills for organizations that may be untenable.

Prajjo has conceived and developed a comprehensive Increment Management System by which organizations can on one hand empower their managers and on the other hand improve the quality of recommendations.

Organizations using these two tools from Prajjo can avoid relying on the flawed concept of Normalization, which can lead to undesirable results: Unhappy people – Unhappy Organizations.

 

 

 


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