Wednesday, August 12, 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.