Employee appraisals: Bell curves must give way to AI tools

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Updated: April 4, 2019 7:25:31 AM

It is critical to integrate all of them on a single digital platform thus facilitating seamless support for ongoing assessment, feedback, learning, coaching and analytics.

Digital platforms bring in transparency amongst all stakeholders about the assessment of capabilities vs opportunities available and thus set up customised career paths for employees without having to wait for the annual appraisal system to let them know where they stand.

It’s annual appraisal time once again in most organisations and HR managers are busy getting their employees to fill up appraisal forms. Annual appraisal system has traditionally been used by most organisations to determine salary hikes and the rewarding mechanism, using the bell curve as a guiding principle. However, with talent retention and engagement having become the key areas of focus, organisations are recognising the importance of continuous performance management with regular feedback and coaching of employees.

Performance management system therefore is now being supported by digital platforms which capture the aspirations and interests of employees helping them assess their skills, identify the skill gaps based on business needs and focus on areas of improvement on a continuous basis. This approach not only helps individuals upskill and remain relevant for the business but organisations are able to finetune their talent pool leading to higher retention. Digital platforms bring in transparency amongst all stakeholders about the assessment of capabilities vs opportunities available and thus set up customised career paths for employees without having to wait for the annual appraisal system to let them know where they stand.

Therefore we need new metrics for performance management system. According to Stephen Balzac, the best practices for creating new metrics for the modern workforce should include providing feedback on things employees can change rather than personality traits or characteristics they can’t change and focusing more on strengths than weaknesses. Therefore HR managers have started moving away from the bell curve phenomenon for force-fitting employees in the predetermined bands of reward and retention system to focusing on democratising the performance assessment system by providing the framework for enabling employees to assume ownership of charting one’s career, accessing the required knowhow for the next role, receiving continuous feedback and reaching out to the right coaches to enhance their productivity and learn to adapt quickly.

Another major departure from the past is how employees are assessed and their compensation structured. The compensation system is linked to not only their individual performance but increasingly several others factors also play an important role. The modern, agile approach to determining compensation has to be centred around contribution of employees to the company, towards its innovation ecosystem, in creating knowledge assets, in building relationship with customers and their learnability quotient. Performance reviews therefore are being driven by a lot more real-time data than mere goals set up in the beginning of the year supported by insightful analytics which form the basis for course corrections. It’s the combination of continuous learning leading to customised career paths, effective coaching for superlative performance and recognition among peers coupled with rewards for their contribution, resulting in impact created beyond the stated goals that make it attractive for employees to stay on with their organisations.

Hence it is imperative that organisations invest on digital learning platforms and tools to facilitate continuous learning. Further, organisations need to be equipped with AI tools that equip them with the ability to curate customised individual needs and styles of learning. Further, most of the HR systems such as knowledge management system, performance management system, communications between employees on business matters and HRMIS function in silos. It is critical to integrate all of them on a single digital platform thus facilitating seamless support for ongoing assessment, feedback, learning, coaching and analytics.

The writer is chairperson, Global Talent Track, a corporate training solutions firm

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