HR is synonymous with the terms - performance appraisal and bell curve. They use these to promote, place, and assess employee training needs. Till now, it was the HR facilitating the performance appraisal of all the other employees in the organization - but recently there's a lot of buzz around HR - some are asking if we really need HR? some are saying they're the most important - but underutilized - resource in the company. We thought, why not find the answers to these questions by conducting a performance appraisal of the appraisers?
We got in touch with Yash Mahadik, Executive VP and Global CHRO, Sun Pharma, to know his thoughts on the need for HR performance appraisal and the bell curve.
"Performance appraisal is an important activity in the entire process of building a performance practice and culture in any organization, be it an organization for profit or an organization not for profit. It is a sub process that involves a discussion and agreeing on the performance level," says Yash. "Performance appraisal of HR is equally important as it is for any other function because in an organization you have to appraise (assess and evaluate) the performance at individual, department/functional and overall organization level".
"HR like any other function within an organization has a purpose of existence and has very clear objectives and deliverables. The deliverables or the outcomes (results) of all the activities that we perform are mostly about creating value for the organization and its business and it's something that needs to be measured and improved upon. Gone are the days when HR was a support function adding value. It's all about creating value now. If the function is just adding value, then it might well be outsourced and probably can be done at half the cost sitting outside the organization. But if you are in the organization, you have to create value. For example, Marketing function creates value by building brands, Sales function creates value by building customer relations - similarly HR now creates value by building employer brand, by building culture in an organization, be it a performance-oriented culture, an engaging culture or a value-based culture etc. "
Considering the paradigm shifts that have happened in the way organizations and business are run today HR has become a very strategic function that's focused on Talent, Leadership, Learning, Rewards and Culture as opposed to pure admin activities that it used to perform a few decades ago. Hence the manner in which you need to manage and appraise its performance also needs to change and be aligned to the contemporary expectation and needs of the business.
When asked about the bell curve, which everyone seems to be curious about, he said, "According to me, bell curve is a statistical tool which is used for measuring the excellence of any process. The more you are within your defined upper or lower limit of your process, the better your process is. I think there is a bit of a misnomer that our performance management process is a bell-shaped curve in-itself. First we need to understand the process of performance management in our company clearly and then decide what means you will use to measure and improve it. Bell curve is just one of the statistical tools that we have traditionally used. If you are trying to build process excellence in your performance management process, then I see no reason why you should not use a statistical tool to measure it. But what has happened is that the tool that was supposed to build excellence has itself become an end instead of becoming the means. And that is where it started crippling the organization because that's when people started getting force-fitted." The intention of using that particular tool was right but it got misused. Now the question that remains is, "If not a bell curve what else will you use to manage, measure and improve the excellence of your performance management process"? Are we throwing the baby out with the bath water?
"As you build a high-performance organization, you cannot easily forecast or predict or box people in a certain performance box or section of a curve. If you have an organization of say 100 people, a typical bell curve will tell you that about 15% of your people are on the right hand side of the curve, about 15% of the people are on the left hand side of your curve and 70% of the people are in the middle of the curve. Now what if 60% of the people have actually over performed and are at the right hand side of the curve. Your entire forecasted plan of force fitting and then budgeting their reward will go for a toss. Because your budgeting for reward was not done in that manner. The other question that stands is, was the defined performance standard right?
I think companies are trying to get away from that. If we trust people to perform to their optimum, then we should not have quotas and boxes."
"I would like to leave you with the thought that the need for the day is wherein the HR function should clearly identify areas where value needs to be created in an organization. Build capability to create and deliver that value. Then measure the value creation and improve it continuously. It's our strategy to impact business and its flawless execution that will separate the best from the rest."
We are sure you are eager for more such food for thought. To know how the HR Performance Appraisal goes, join us at the SHRM India Annual Conference and Exposition 2016.
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