Hello! I am currently writing an essay for my final English project. It is a persuasive writing with required citations from at least 5 sources. Length requirement was 8-10 pages, which was met. Want to make sure all transitions are smooth and content isn't too boring. The Performance Evaluation Curve;
Ineffective Process of Ranking Employees against Their Peers
The annual performance evaluation of employees by a predetermined performance curve is ineffective and outdated in corporate America. This has been the practice of companies across the country for decades. This reactive approach to employee development is no longer adequate as the current generation in the workplace wants coaching and development to be a more frequent and ongoing process. The development of employees needs to happen as often as the business strategies change in order to have a truly effective staff. The pre-established performance curve also creates a compensation issue based on categorizing employee performance incorrectly to meet the requirements of the grading system. Writing and delivering formal performance evaluations for large staffs is a waste of company resources and has a negative effect on employee morale and performance.
The evaluation of employee performance based on a pre-established curve is outdated and being replaced by new performance evaluation methods. Many companies have been wanting to redesign their employee evaluation and compensation process for the last few years. Cigna, GE, and Deliotte are just a few large names that recognized the old way of doing things was not only outdated, but it was working against them. The practice of pre-determining a performance curve that any number of employees, when being evaluated, are placed into is referred to as the Performance Evaluation Bell Curve. This practice has been in mainstream corporate America for decades. An employee's performance is ranked on a scale of one to five. Most people will fall into the "3" category which is usually a 'Meets Expectation'. Very few people fall into the other categories, and there is a pre-determined number of each of those ratings that can be given out. Out of groups of people in the hundreds, maybe three or four will be allowed to receive the rank of 5 or 1, whichever is the 'Outstanding Performer'. Once an employee receives a rank or score, their compensation is determined from that score.
Oddly enough, GE was one of the companies most known for its use of this evaluation system. They were well known for their "rank and yank" system which was taken on by CEO Jack Welch during his reign from 1981-2001. GE is now moving away from the "rank and yank" performance management system, and taking on a new approach. "No longer defining performance by a single number, these companies were emphasizing ongoing, quality conversations between managers and their teams". (Jones and Rock, Harvard Business Review) GE is distancing themselves from performance evaluations completely, and depending on its leaders to have more frequent and less formal feedback sessions and conversations with their teams. The company who was once among the most known for using the Performance Evaluation Curve, is also one of the first to retire this archaic practice for an approach that is more conducive to working in teams and creating a better workplace for their employees.
New performance management approaches based on more frequent development conversations are yielding far better results based on the current demands of the work environment. Employees that are consistently recognized for what they are doing well will continue to deliver those competencies at a high level while remaining more open minded to improving their opportunities. When an employee doesn't feel their worth to the company is based solely on a number or rating, their engagement increases and benefits their personal development as well as company performance. As said by Jones and Rock, "When Microsoft removed its ratings, employee calibration skyrocketed" (Harvard Business Review). When the pressure to maintain a certain performance rank is removed, team collaboration improves immediately. Employees are working together now without competing against each other for a better performance rating. This is crucial to the success of the company as well as its ability to keep up with the demands of the industry.
Current work environments move faster than they ever have before. The demand to keep up with the consumer as well as the competition is high and continues to move at a steady pace. Based on the rate at which any industry or business changes strategies or focus, the practice of providing feedback or making changes to one's development plan needs to happen equally as fast. How can an employee continue to be at their best for both their performance and their development if they are only having those conversations once or twice a year? If a business changes gears to meet the needs of their customers at an average of once monthly, it only makes sense to have strategy and expectation discussions with the employees monthly, if not more often. This will only increase overall production and efficiency. This process of providing coaching and development more frequently will also increase employee engagement. People want to know how they are doing at work. It's hard to improve opportunities one doesn't know about, and it really doesn't feel good to find out how many opportunities one has all at once in a meeting with your boss that is scheduled to take place once a year.
Performance feedback and development should take place as often as the business changes performance goals. It doesn't make sense to evaluate an employee's performance based on goals set a year previous when the business plans or goals have changed several times in that 12 month period. "Successful performance management must concentrate on the continuous development of skills, rather than employee rankings" (Sommerefield, Kiss, Inside Magazine issue 12). Goals set for employee performance that are a year in the rear view mirror may be completely obsolete by the time the employee gets to discuss their progress on that goal. This not only negatively impacts the business performance, but it is very confusing for the staff member. How can they or their manager effectively measure their success based on this process? The answer is they can't.
The current workforce demands coaching and feedback on a continuous basis. They also want input from others besides their direct leader. "The way millennials are used to working and getting feedback, which is more frequent, faster, mobile-enabled..." (Nisen, Quartz). GE has implemented a mobile app for its employees where they can see any feedback given on a work project at any point in time. Staff members also have the ability via this app to request feedback by the press of a button. They receive feedback from all involved in the project, not just their leader. This is helping to shape a culture where the employee's need for development is heard and engaged. This also creates a team environment where feedback is viewed as a gift and is a normal part of all work performed. This approach brings a positivity to the work experience and sets the stage that all receive feedback in a way that allows the employee to do their job better.
The structure of the development process needs to be redesigned at many major organizations to focus more on positive feedback to encourage good behavior. Negative feedback can over-shadow positive work behavior if not delivered properly. Bersin states "Research shows that reducing a year of work to a single number is degrading" (Forbes). When approaching feedback sessions from a positive point of view, the receiver of the feedback tends to be more receptive to any opportunity feedback given. "Humans don't really like to give negative feedback, it's just not something that anybody does well...if you want the person that's working for you to improve, you have to think about it in true coaching terms." (Nisen, Quartz). No one wants to be told they did something wrong or their work is not to expectation, but if the conversation is approached from a "this is how we may have done it better" point of view, the feedback will still carry the same weight without feeling so negative. Affective coaching is frequent and balanced. It's not all positive, and it's not all negative.
This isn't to say that accountability conversations should no longer take place. A work environment can be built on a culture of positive growth practices, but that doesn't mean its employees are not held accountable for their actions or their performance. Based on what many companies are learning about the performance management process, most work cultures that embody frequent development conversations tend to have less negative accountability conversations. If an employee discusses their own performance with their leader on a consistent basis, many opportunities to improve the outcome of their work should be identified in the earlier stages. This process alone would help eliminate larger problems and opportunities down the road as well as overall efficiency of an organization's employees.
Now there is a new issue to discuss. If employees as a whole are more productive and have become accustomed to having developmental conversations more frequently, employee performance increases right? The next problem with the Performance Evaluation Curve is the compensation element. Most companies talk regularly about attracting great people to work for them, and developing the ones they have already. Based on this, if even partially successful, many companies would have a larger population of top performers. So how can the evaluation curve really be affective if even an organization's top performers have to be ranked as a 'Meets Expectations' to satisfy the requirements of the Performance Curve? The answer, once again, is it can't. If a very small number of people can be ranked as an 'Exceeds Expectations' during the review process, but there are double that number of employees that should be ranked as an 'Exceeds Expectations' either the performance curve won't work or many hard working employees will be short changed. If an employee goes above and beyond their role description, they should not be pigeon-holed to a certain rank just for the company to meet the criteria of a pre-determined curve that does not properly measure employee performance or contribution.
The compensation increase an employee receives yearly should be evaluated based on individual performance, not a numeric rank or a peer's performance. Any organization should determine an employee's raise amount based on what it would cost the company to replace that employee. The employee that is important to the organization based on their performance and production should receive larger increases than those performing at a median level. "All pay-related decisions should be based on the importance of the worker's current competencies" (Sommerefield, Kiss, Inside Magazine issue 12). It's always the same story. Someone who consistently performs their job well gets nothing but small increases yearly. They continue to put forth a consistent effort and high quality work, but never receive the actual raise they deserve. That is, until they put in their two week notice to leave the company. Now all of a sudden the tables have turned.
The focus now for that employee's leader is to find a way to retain their great talent. So at this point the conversation changes to a compensation discussion. Employees that are not compensated properly are a flight risk to the company. One thing so many in the workforce have complained about is how they are not worth a certain pay annually until they are ready to leave. Then in a desperate attempt to keep a part of their workforce, whose personal stock just shot through the glass ceiling, promises of salary and benefit increases are now made and plentiful. As great as this may sound hypothetically, to most people that are currently at this point, this is a low blow. The immediate thoughts of "Oh so now I am worth it because you realize just how much I do!" start popping up, and a once loyal employee is even more frustrated and on the defensive. At this point, you may as well hand that great employee over to your competition on a silver platter. And to top it all off, they will most likely make more money because they are an external hire for their new employer.
Before an organization starts to lose some of its best employees, it would be wise to find a better way to evaluate and reward good or great performance. Most people wake up every day with the intentions of doing a great job both at work and in their personal lives. Based on the amount of time the average full time employee spends at work, most people devote more time daily to their jobs than they do to their families. This is the "norm" of our current society, but that doesn't make being under-compensated or under-developed any less frustrating. When someone devotes their time, sweat, stress and loyalty to a company, it is extremely defeating to be reviewed once for a year's worth of hard work, and to have a single digit number attached to that work. The frustration continues to grow when an employee is told they are being ranked a specific way because there are not enough ranks available to give them the rank they may deserve. Now what this person is hearing is "sorry, we have to hit a certain number so you are going to have to just take this one on the chin".
Now let's link the actual ratings given out to the pre-determined salary increases. Based on this performance curve, a budget is set for the overall funds to be dispersed to the organization's staff. Then specific amounts are set for the different rankings. Once an employee receives a rank, they get a specific increase, which can be a dollar amount or percentage of their annual salary. So in the case where many employees fall in to the category of 'Meets Expectations' most of them receive the same increase. This is a depthless attempt to evaluate an employee's performance. The message given to the employee by their employer is they need to give their best at all times, always strive to achieve more. When it comes time to evaluate and compensate them for that, they will be labeled with a blanket number that has also been stamped on many other employees. How can that possibly be fair? Miller from SHRM states "Rating them once a year, based on a bell curve, will send top performers-and profits-right out the door" in a writing about evaluating employee performance. People want to feel recognized and appreciated for the work they do. So how does someone feel when a peer who clearly produces less in the workplace gets the same performance rating, and in turn, the same salary increase?
Aside from a poor employee experience, the Performance Bell Curve creates another problem for most organizations, turnover. People who are good at what they do are desirable to other firms or competition. Most companies are always looking to source great external candidates. According to Aguinis, "Individual performance has to be re-evaluated so managers can identify and go after lead performers. These people are desirable to outside firms, so success means thinking about excellence and improvement all the time, talking with top performers continuously to find out what they need to grow and advance". Top performers and potential top performers need to be identified, their development needs assessed, and to be compensated based on their value to the organization, not a bell curve. The workforce will be loyal to employers that appreciate their performance as an individual person, not a number on a scale.
As the work environment continues to evolve in to a more employee-friendly place, the practice of evaluating a staff on a pre-established curve needs to become a practice of the past. People want to be treated as people, not numbers. Business and consumer demands are moving faster than they ever have, therefore, the workforce needs to move at an equal pace. This demands a faster, more efficient way to coach and develop a team. Lastly, employees need to be compensated and receive yearly increases based on their worth to the company. If certain staff members would be a devastating blow to company performance and profits if lost, their annual compensation needs to reflect the importance of their role and company contributions.
A few areas I may improve my writing would potentially be wording passages perfectly and in a way the reader would understand them as they would in a verbal conversation. I believe I may also improve the attention to detail for things like proper spacing, when to indent specific things, etc. I also tried to make my writing sound more persuasive and less informative. Thank you for your review.