I am quite sure that most of employees in corporations had an experience of Performance Evaluation, whether negative or positive. Nowadays, many corporations still use them in their incentive / reward scheme. Mainly, it is a motivational tool to increase company productivity, encourage the employees to achieve the set milestones, correct their behavior, or facilitate the general supervision.
These all sound quite standard and acceptable, but there are couple of questions arising in my mind immediately that reveal the contradiction between many recent researches.
– As per recent research by Shawn Achor, “The Happiness Advantange”, it is been discovered that Happiness fuels success. “When we are positive, our brains become more engaged, creative, motivated, energetic, resilient and productive at work”.
How does Performance Evaluation cope with the idea that productivity increases due to happy employees? If your employee worked hard but didn’t get the expected reward because of the poor evaluation, you definitely do not make him happy and, thus, sharp decrease in his performance and demotivation.
– Do your Reward Mechanisms / Incentive Strategy correlate with the latest Researches/Developments in Occupational Psychology of Behavioral Physics? In one of the RSA videos it was mentioned that monetary rewards do not increase employee productivity for a long-term. Additionally, according to Researches from MIT, University of Chicago and Carnegie Melon Universities the following results were found:
For more mechanical skills, where tasks are simple and straightforward – the monetary reward mechanism works perfectly: Higher Pay = Better Performance
But when task involves more cognitive rudimentary skill, task gets more complicated and requires some conceptual, creative thinking – monetary rewards demotivates: Larger Reward = Poorer Performance.
Thus, money is not a right incentive. The more stronger reward is a purpose-driven professional engagement, where employee realizes importance of his contribution and significance while being part of a team.
As suggested by another research, there are three factors that encourage better performance and personal satisfaction.
1. Autonomy – Desire to be self-directed which is perfect for Engagement
2. Mastery – Urge to et better at something
3. Purpose – that Drives Organisations, to be destructive or to add a real value. (ex. Skype, Apple etc.)
I understand that performance evaluation is a reflection of some expectations that in turn should be clearly communicated and precisely delivered to avoid any misunderstanding and surprises. This creates another dilemma. As suggested by Warren Buffet:
1. Great Leaders hire people and don’t tell them what to do
2. Great Leaders let good people set their own standards and direction
3. Great Leaders delegate almost to the point of abdication.
According to Dr. David Vik, ” The Culture Secret. How to Empower People and Companies no matter what you sell” book, it is vital to create environment that empowers people to function at their best, thus establishing organisational culture. it is not sufficient to hire people and then leave them alone. You need to create specific environment, where they can flourish, be happy at work and feel success.
Culture Building Leaders:
1. Connect rather than withdraw
2. Build “chains of empowerment” not ” chains of command”
3. Concentrate on the success of others
4. Exercise “power with”, not “power over”.
5. Tell people what needs to be done not what to do.
6. Focus on employee strengths
7. Express gratitude
8. Make people feel they matter
9. Emphasize positives even when dealing with negatives
10. Use ‘we’, ‘ours’, and ‘us’
11. Show interest
12. Know names.
I guess, most of these culture building features are directly opposite to the sense of Performance Evaluation. If you are a good leader who focuses on employee strengths, expresses gratitude, concentrates on success of employee, how will make him feel that he matters with your negative/satisfactory Performance Evaluation? It is obvious, that result is the opposite , i.e. complete demotivation of the person.
In this regard, I believe that it is not Performance Evaluations that needs to be used for improvement of organisational behavior or productivity increase, but the leadership style that empowers subordinates through engagement and success.
Below are some tips from Francesca Gino, author of the HBR Press book “Sidetracked”, where she suggests how you can measure employee productivity accurately:
1. Don’t confuse effort with outcomes
2. Make sure your metrics are maningful
3. Examine your incentives
4. Look at the whole picture
Fidan Aliyeva is a VP of R&D for ztudium. She is specialised in leadership, strategy, Innovation, People Management, behavioural economics, digital transformation. She writes for intelligenthq.com, openbusinesscouncil.org and hedgethink.com. Fidan Aliyeva’s background experience is in senior level leadership, project management, having coordinated operations for ztudium holdings and its multiple platforms and projects since 2011. With a career background in international Energy, Oil and Gas industry, Fidan has been working with big energy Multinationals close to CEOs and Boards project managing global projects. Fidan has an MBA in Oil and Gas Management from the University of Dundee, Scotland. In the last years she has been working, researching and writing about micro and macro trends in business, energy, oil and gas industries. She has a passion for leadership, strategy, geopolitical, environmental, tech and other global regulatory concerns with interest in behavioural psychology. Her current study involves EnioStyle – brand new socio-cultural theory on informational metabolism, psyche-typing, energy-informational exchange between people and nature based on analytical psychology, neuro-linguistic programming, transactional analysis and socionics. Application of EnioStyle to business challenges as a decision-making technique – is her new frontier for exploration.