Written by: Dr. M. Amr Sadik
Edited & Published by: Mariham Magdy
This is a real case demonstrating the strategic worth of Human Resources Management, which took place in a manufacturing organization.
One day in the early August 2006, the phone rang in my office. I was asked to go to the Chairman’s office along with the Vice President for an important meeting. As a matter of fact, those types of meetings most of the time are useless and end with no conclusion, and I hate to attend without pre-meeting agenda and/or without knowing what I’m supposed to contribute with or get out of it. All speculations went through my head, as I have just started this new assignment in early July, what went wrong?
At the Chairman’s office and over a cup of espresso, he addressed this question:
“What would you do if the performance evaluation system does not work the way it is supposed to be, taking into account that we have tried to adopt several evaluation systems in the past years, but they all failed to produce the right results. Moreover, employees are frustrated with the results, morale is very down, many of our good people are thinking to resign, and of course, their performance is at the bottom level.”
There was no right or wrong answer to that question in my mind, but simply I have to think, act and evaluate differently. However, I have to provide some sort of provoking statements so they can give me time to investigate and analyze causes.
In straightforward answer to the Chairman and his Vice President I said:
“There are no magic answers! And, I do not have a bag full of magic tricks, and most probably the systems have failed because you were copycatting other systems as is! Instead of imitating systems from here and there, you should have adopted and adjusted them first to your own environment and culture or even perhaps develop a complete new system“. A period of silence from both of them.
Anyway, we left the Chairman’s office wondering what we are going to do to overcome this tragedy.
We know that nobody likes performance evaluation systems too much. Managers find them unworkable and uncomfortable. Many experts think we should scrap them altogether. Employees do not hate the evaluation, but they hate how we evaluate them. Performance evaluation is often perceived as a technique of personnel administration, to a great extent this is a fact.
Back to my office and sitting with the HR team trying to understand what went wrong, and after a full investigation about the reasons of failure, I came to know that the implementation of 360 degree Performance System was very much wrong and as well as other performance evaluation systems they have used in the past.
I am a great believer that HR can do far better things rather than just copying systems from different companies, and that was the main reason behind the failure of performance system in this company.
As the company was going into a mega project to move from family business approach to corporate approach, we thought to create something unique that will differentiate them from other competitors.
I called for a meeting with the Chairman, VP, and the executive directors to get their reaction and then commitment on what HR is going to do. Before that, I came to know that the Vice President is a fan of the late Peter Drucker principles of Management by Objectives, so called MBO, and therefore I have decided to gain his vote during the meeting by adopting MBO in the performance evaluation criteria.
“We have decided to create an in-house Performance Management System so called Panoramic Evaluation System using several concepts from all different approaches, and will involve everyone in the development of such system. It is a crazy idea, but I was convinced of its applicability!”
In a brainstorming session, we have agreed to evaluate our people on the following five (5) levels parameters:
Each level will be assigned a different weight factor.
A new question aroused, who will going to develop the company values and the core competencies? Spontaneously I said we will do it ourselves, our employees; as the principle idea to develop the Panoramic Evaluation System, is that all employees, labors to directors will participate in developing the system in which they will be evaluated on. The Chairman and all directors agreed.
Furthermore, we agreed to use the company’s brand name as a catalyst. Through the employee competition, we have requested all employees to provide the best phrases that represent every letter of our trademark. Best statements was financially rewarded during annual staff party.
On a later stage, middle and top-level executives came together in a full-day workshop to convert these statements into actions and behaviors, so that we can measure them numerically.
In order to come with the core competencies we went further. We have decided to engage local business school, particularly those students who are interested in HRM and doing their postgraduate thesis. The result was overwhelming.
The core competencies that were developed by one of the students were approved by the business school to be the module for the similar manufacturing organizations in the country. Moreover, that student was hired in the company to manage the Performance Management System after the graduation.
So far, we have established our values, core competencies, and only five (5) major and critical job tasks was refined and agreed upon from the job descriptions, we called them job effectiveness description, in which we will use them on evaluating our people.
As for MBOs’ and Projects, we further agreed that every member will have (3) annual objectives and one unique project, and in order to have consensus from all employees, HR have conducted employees’ opinion survey.
It took some time and dedication to develop this comprehensive program, but the results were magnificent as follow:
- Saving of a substantial amount in consultation that was estimated above US$250’000
- Achieved two distinctive awards; Organization with Innovative HR Practices & Best Continuous HR Strategy at Work
Remember, every accomplishment starts with the decision to try, and ability is what you are able to do, motivation determines what you do, and attitude decides how well you do it.