The importance of performance reviews for an organisation, and their purpose, cannot be stressed enough. They are indispensable when it comes to appraisals and promotions. They also help identify the high performers and reward them appropriately, thus helping retain the best talent.
“We use this data to identify the counselling needs of our high performers if we find their performance dipping over time.”
Kamlesh Dangi, group CHRO, Incred Financial Services
The data collected for reviews is vital, and different organisations will have different ways to collect the same.
A variety of methodologies and tools can be used to collect the data, including feedback from managers or even a 360-degree feedback. Ultimately, everything boils down to how companies use this valuable data. How is this data helpful in other areas and in ensuring efficiency?
Apart from the quantitative data which is collected, in today’s time, organisations also practise taking feedback from employees and managers which becomes a source of qualitative data. Insights derived from these qualitative data points can be used to make actionable decisions on improving other HR processes at the firm.
“Performance review gathers a huge amount of qualitative data which can be used to measure employee engagement with the help of Natural Language Processing (NLP). Through algorithms, it is possible to measure employee sentiments by analysing the language used in the performance reviews.”
Satyajit Mohanty, CHRO, Crompton Greaves
As psychologist and Nobel laureate Daniel Kahneman once said, “Often the performance review reveals more about the appraiser than the appraisee.”
Not only can the data be used to reduce noise and bias in the evaluation process, it can also be used as a very good feedback and development tool for managers.
Aligning roles vertically
The performance review data is used to align certain roles vertically. Let us take the instance of the roles of accounts manager and payroll manager. In the review meeting, the conflict between the two roles sometimes comes to the fore. Many a time, the payroll managers may claim they did not get some approval from the accounts managers, which led to delays. Aligning these two roles with each other, will ensure clarity. It will also improve the relationship between co-workers. “The data can be used to clarify the job roles and align them with each other, so that one role does not blame the other for non-delivery, as in the above-mentioned example of the account manager and payroll manager,” explains Sudhansu Misra, CHRO, Tata Coffee.
“The data can be used to clarify the job roles and align them with each other, so that one role does not blame the other for non-delivery, as in the above-mentioned example of the account manager and payroll manager.”
Sudhansu Misra, CHRO, Tata Coffee
Improving recruitment
The data, which is collected in the performance-review system, also helps improve the recruitment process of the organisation.
As per Avadhesh Dixit, CHRO, Acuity Knowledge Partners, “There are some mature organisations that use this data to improve efficiency in their recruitment process. They combine the recruitment data with the performance-review data, to analyse how many of the candidates who scored well in the hiring process turned out to be high performers.”
Rajeev Singh, CHRO, Yokohama Off-Highway Tires shares that at Yokohama, the performance review data is used to set internal benchmarks for hiring candidates in different roles.
“From the performance review data points, we get to know the attributes and skills required to be successful in a certain role. These benchmarks help us to make decisions while hiring people,” tells Singh.
“From the performance review data points, we get to know the attributes and skills required to be successful in a certain role. These benchmarks help us to make decisions while hiring people. At Yokohama, we have a programme called performance review and enhancement programme, where the company uses the data collected in the form of feedback from employees and managers to carve out team and individual training and development needs in the organisation”
Rajeev Singh, CHRO, Yokohama Off-Highway Tires
“Through use of qualitative and qualitative data, it is possible to derive correlation between competencies, behaviours, and performance. The same can be used for assessing ‘right fit’ at the time of interviews. Also by gauging the manager bias, the recruitment process can further be augmented,” opines Satyajit Mohanty, CHRO, Crompton Greaves.
At Crompton, a continuous performance feedback process has been initiated. “We not only draw significant inferences about talent assessment, career development and training, but also increasingly have started to understand and apply the data in some of the other uses,” says Mohanty.
Checking role fitment and performance
Some employees may be struggling in their current roles, and the organisation may find that some are better suited for other roles within the organisation, and make the necessary changes. That means, data tells one about role fitments in the organisation.
It will also be able to reveal who among the regular high performers are losing their touch. A trend may come to light where the performance of the regular performers may show a decline. Such revelations allow for the timely identification of such people who can then be counselled before it is too late. “We use this data to identify the counselling needs of our high performers if we find their performance dipping over time,” Kamlesh Dangi, group CHRO, Incred Financial Services.
“There are some mature organisations that use this data to improve efficiency in their recruitment process. They combine the recruitment data with the performance-review data, to analyse how many of the candidates who scored well in the hiring process turned out to be high performers.”
Avadhesh Dixit, CHRO, Acuity Knowledge Partners
Improving performance and training
Performance-review data points out the training needs of the organisation. It reveals where the employees lack in performance and how such gaps can be filled by training.
As Singh shares, at Yokohama, they have a programme called performance review and enhancement programme, where the company uses the data collected in the form of feedback from employees and managers to carve out team and individual training and development needs in the organisation.
Google for instance uses its performance-review data to identify certain must-have traits in its managers under Project Oxygen, a strategy derived in 2008 and revisited in 2018, to train future business leaders and inculcate best performance practices. This had some great impact because using the people analytics data made it more credible. As it was derived from a popular mandate which was employee feedback, it inspired other employees to follow suit. It just had wider acceptance. Also because it was based on data, managers themselves accepted and acknowledged the need for scope of improvement in their management style and function.
Combining engagement data with performance review data
As all companies conduct annual engagement surveys, how about combining that data with the performance review data? This will help the companies avoid regrettable turnovers amongst employees. By combining engagement scores with that of the performance-review scores, one will get to know the sentiments of the high performers. Whenever one finds some of the high performers going through a bad experience at the firm, one can take timely action and avoid losing a quality talent.
“Performance review gathers a huge amount of qualitative data which can be used to measure employee engagement with the help of Natural Language Processing (NLP). Through algorithms, it is possible to measure employee sentiments by analysing the language used in the performance reviews,” explains Mohanty.
Therefore, other than in the areas of succession planning, promotions and compensation, the performance-review data can be effectively used in many ways that can be beneficial to the organisation. It would be easier for HR teams to carve out plans, strategise and deliver HR solutions more efficiently.