A non-performing performance appraisal process

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October 31, 2016 6:15 AM

In our system of public management, connections, friendships and extraneous considerations usually matter much more than performance

Leadership, friends, is a function to be performed and not a status to be enjoyed,” roared the main speaker at a management seminar I attended long ago. “And administrative leadership is no exception to this principle.” Somehow, these words struck a chord with me and I remembered them again recently when I heard about the government’s decision to accept certain recommendations of the Seventh Pay Commission.

In brief, the government has decided that all manner of promotions, increments and financial upgradations will not now be automatic, as hithertofore. The benchmark level to earn these has now been raised to ‘very good’.

Many will regard this reform as symbolic because even today 90% of officials are rated “very good”; in fact, this rating is a benchmark for promotion. Problem is that it is routinely awarded both to officers who are genuinely very good as well as those who are not. We have routinely over-graded officials of average calibre and as a consequence, built up a culture of mediocrity and entitlements where performance is the least important of the factors which govern a person’s career. This leads to a sad spectacle of officials of average calibre routinely rise to the highest echelons of the government. “Why work when you can network,” advised a colleague of mine many years ago and he was correct. In our system of public management, connections, friendships and extraneous considerations usually matter much more than performance.

In this context, the government’s decision reflecting a certain intent to improve efficiency and break away from the current syndrome appears admirable. It could also be the beginning of a substantial reform, if it is followed up and implemented properly. For this initiative to succeed, however, performance appraisals will have to reflect much greater objectivity and fairness. How this can be accomplished is an important question.

Currently, annual appraisal reports tends to be subjective. This is because they depend very heavily on reporting officers’ exercising good judgement while appraising the performance of their subordinates. It would help if they could be made to focus much more on actual performance in relation to targets rather than on personal qualities. Some good ideas in this regard have come from the Pay Commission itself: in order to make appraisals more objective, the Commission has suggested that the weightage assigned to personal attributes to be reduced from 60% to 40%, and that of actual performance increased from 40% to 60%.

Implementing this idea by itself may not be enough. The trouble is that our government, along with many others, continues to grapple with some very basic problems related to performance measurement in public organisations, only some departments like Income-tax are fortunate that a large part of the work can be quantified. It is possible, for example, to ascertain both at the local as well as the national levels, as to how many scrutinies were carried out, how many rectifications were made, how much revenue was collected and how much refund was issued. But even here, the indicators in vogue were laid down decades ago. They are used mechanically; and have hardly been supplemented or replaced by new ones which capture the achievements of an officer in a better manner.

Many other departments perform functions where quantification of work is not always possible as objectives are diverse, diffused and contradictory. It was recently noticed by quite a few departments, departmental objectives cannot easily be split into concrete goals for field formations against which actual achievements can be measured.

The other major problem relates to prescribing results to be achieved without linking them to actual outcomes. In any particular year, an education department of a government may prescribe by what percentage absenteeism of teachers should be reduced and the enrolment rate increased. Will it really help if these targets are achieved by a teacher even if her students continue to perform below par? It is important then to formulate sensible indicators that also measure outcomes sought to be achieved. Even more important, they should be sensibly interpreted after they have been so formulated. Doing this is not always easy. Unlike in the private sector, where quantification of results and outcomes is much easier, in government, the exercise of developing and prescribing suitable indicators needs to be a much more inter-disciplinary and broad based exercise. This is because roots of suitable indicators often lie in disciplines as diverse as economics, management, accountancy, public administration, political science and sociology.

This does not mean that the departments should not try and modernise their indicators. But while doing so, they should also consider assigning this task to a committee of insiders and outsiders, drawn from diverse backgrounds.

Some best practices also emerge from the private sector. One such practice relates to obtaining a 360 degree feedback on an employee. So apart from her immediate superior, the feedback of her peers, subordinates and boss’s boss is also important to arrive at a holistic view of her achievements. This also needs to be conveyed to her so that to the extent possible, she can improve.

Also, employees are much committed to action plans if they are consulted in the process of their formulation. This is best achieved in a bottom-up consultation process in which each superior consults her subordinates while formulating the targets for her unit. What might ultimately emerge may be a more realistic plan than the one coming out of a mechanical top down exercise.

WA Niskanen, an American economist, in his book, “Bureaucracy: Servant or Master”, highlighted the inherent problem of inefficiency in bureaucracy. Describing it as a hierarchy existing outside the discipline of a market, he asked the question whether it could be made efficient via intra-organisational competition. In such monopoly conditions, is it possible to simulate a market and create healthy internal competition, by comparing the performance of individuals and units, comparably placed, with one another? If so, sensibly devised performance indicators could help here as well.

The author was chief commissioner of Income-tax and ombudsman to the I-T department, Mumbai.

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