Thursday, 13 August 2009

The soap opera called annual appraisal

Once a year (at least), in every company, a special event takes place. Its something everybody dreads, but know it has to be gone through. Its called the annual appraisal (OK you can choose more politically correct terms; maybe “performance management exercise”).

Ingredients to this event are many. Firstly an incomprehensible and long form to be filled. The form has been “simplified” this year – shudder to think how it was last year. The boss puts it off for as long as he can. He has 25 subordinates and he recoils with horror at the thought of filling 25 forms. Each employee thinks he was the star performer of the year and deserves the highest rating and the largest raise. OMG. But the focus of this post in on HR. So lets assume it gets done somehow.

This is the moment the HR function is waiting for all year. For a few weeks, they are the most important lot in the company. They are burning the midnight oil and feeling happily overworked.

Now to the fun and games. HR loves to “normalise” ratings. They are captivated by a bell curve – a lovely normal distribution is the holy grail. So they “challenge” each line manager and try to downgrade a few ratings so that it can be fit into a nice curve. A smart line manager knows that this will happen – so he’s already massaged his ratings so that he can afford to give a few away to HR and still come out trumps. The smart HR manager knows that the line manager is playing this game; so he’s shifting his normal distribution so that at the end he’ll come out with the shape of the curve he wants.

Pause and step back a moment. Is this what you want ? A perfect normal distribution ? An average and mediocre company. A company chiefly composed of plodders. Wow !

Many years ago, there was a man (bless his soul) who ran his huge place like a tyrant. He was incredibly hard, but good at heart. He hated appraisal forms and refused to fill them. His system of performance management was simple. If he thought you did a good job, he would look you in the eye and say (tu teek hai – you are OK). People would die for that one moment.

As bright young MBAs with fanciful ideas, we sniggered and thought the old man was a fossil. Now I am not so sure.

Interval time. Onwards we march to the second act of the opera. The raises. In walks the remuneration head. That’s for tomorrow.


A journey called Life said...

para 4 was HILARIOUS!! as an after thought, that is what happens.. its all about the curve..

kiwibloke said...

If you have "normal" people you have a "normal" company. Connect this back with the netflix philosophy of bunching together a large number of highly capable preple, viola! forget the appraisal drama!
PS: The obsession with Normal Distribution can be attributed to the fact that our touchy/feely HR folks can't get their head around any thing more complicated. Next time an HR buddy bandies around normal, ask him if it meets one of the following tests of normality - Kolmogorov-Smirnov Test, Spiegelhalter's Omnibus test or Ryan-Joiner test. I actually asked this of one of my HR buddies and that was the end of normalization

Anonymous said...

with you have missed out the part of rationing of the available miniscule prize and also the big joke of high performance vs potential to justify rewarding..

thethoughtfultrain said...

I don't think I have ever agreed with every line of someone's post. That is until your started your HR week. The normal curve sounds absolutely ridiculous - it means if their whole company is filled with the top of line professionals, they ll ensure they have tagged majority as "average"!

PS: Are you sure a week is enough to cover all that HR is doing wrong?? :-D

Ramesh said...

@AJCL - Yes the curve seems to be the holy grail

@kiwi - ROFL - absolutely hilarious. Did you really do that ?

@Anon - Oh yes the rationing is part of the opera for sure.

@thoughtful train - I'm tickled pink that you wholeheartedly agree. Yippee Yay !

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