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Fairer performance management

Lorenzo Vitturi

Tools for measuring how well your employees are meeting goals come in many guises, with new, experimental methods being introduced regularly to combat perceived shortcomings. Whatever approach you take, it needs to be underpinned by a convincing sense of fairness, say Bryan Hancock, Elizabeth Hioe, and Bill Schaninger, writing for McKinsey Insights.

Many human resource departments are rejecting longstanding systems which rank individuals against their colleagues. They are beginning to delve deeper into what actively encourages a staff member’s motivation and productivity. However, surveys conducted by the three authors revealed disappointing results from efforts so far in terms of employees’ sense of a fair appraisal.

“Employees still complain that the feedback they get feels biased or disconnected from their work,” say Hancock, Hioe and Schaninger.

Managers surveyed by the authors regarded performance management as a “bureaucratic, box-checking exercise”, even claiming the process had a detrimental impact on achievement. Some have abandoned annual reviews altogether, leaving employees out on a limb, while others have returned to the old-fashioned status quo.

Addressing this sense of stalemate, Hancock, Hioe and Schaninger believe that looking at fairness from the employee’s point of view is the key to a satisfactory assessment. They have pinpointed three essential elements to make performance-management methods more likely to be viewed favourably.


1) Be clear about what you expect of employees. If their tasks are linked to the larger goals of the company there is a better chance of creating trust in performance management. Encourage flexibility and individual input, fostering a sense of common investment. Be prepared to alter goals when necessary to ensure their relevance and achievability.

“Of respondents who reported that their companies managed performance effectively, 62% said that those organisations revisit goals regularly,” say Hancock, Hioe and Schaninger.

2) Turn your managers into team coaches. Working with individuals in their departments on a daily basis, managers are perfectly placed to tap into the abilities and development needs of their teams, give regular feedback and promote a consistent sense of fairness. This doesn’t always come naturally, so it’s important to invest in training to boost their skills and their confidence, particularly when it comes to “difficult conversations” with employees.

3) Create a sense of balanced compensation. The predominant proportion of middle achievers require careful handling. Sizeable variations in salary at this level can be viewed as unfair. Retaining some form of ratings system will help employees to understand their position and their pay scale.

Cirque du Soleil, for example, sets a base salary for all employees that aligns with market rates and there’s little difference in pay in the middle section. By contrast, clearly outstanding performers receive an additional 15-20%.

Technology can be a powerful tool, but choose it carefully. Apps that allow goals to be tracked on a daily basis can make employees feel that Big Brother is watching. Putting the emphasis on development, tapping into individual’s strengths and offering coaching for their weaknesses offers a more positive slant.

Hancock, Hioe and Schaninger stress that employees know what seems fair enough to them, so always put them at the heart of any new structure for your performance management.

Source Article: The Fairness Factor In Performance Management
Author(s): Bryan Hancock, Elizabeth Hioe, and Bill Schaninger
Publisher: McKinsey Insights