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We may start by saying that not all companies are run by the book anywhere in the world. It is not about the size of the company; it is about the thinking of the management, and it may be influenced by the industry in which they operate. Countries where application of laws is lax also display laxity in practices. Pakistan has gradually gone from good to bad to worse, and the slide continues. The two major deficits we are facing are legitimacy and authenticity. Legitimacy of successive governments has remained under question due to charges of election engineering and strong-arm tactics at candidates’ level. Authenticity of all institutions and people at high positions is under cloud for reasons known to everyone. For this reason, implementation of law has become extremely weak and erratic. Corporate sector cannot be aloof to social changes, nor can it withstand pressures from multiple quarters.
Social and moral decline is obvious in Pakistan and value system of individual people has crumbled to a large extent. Performance appraisal process has also suffered even before taking firm roots in the corporate working. Following areas may be identified as not-so-right areas in performance appraisal system.
Lack of True Spirit
Worldwide stats show that appraisals are dreaded or actively resented by majority of the employees. The fault lies in the way these are administered and handled. The appraiser sees the appraisal time as the time to show his power and settle scores, therefore, he starts with finding negative things. The appraisee is already feeling the bad vibes and becomes defensive immediately. If pushed further, he may react aggressively. I can say on good authority that too many appraisees leave the appraisal interview with heavy heart, stressed mind, and wounded feelings. Their morale is touching the floor, and they do not have enough energy for the next several days. This is a misuse of the appraisal system. These systems are not designed for target killing; these are for supporting achievement and continuous development.
A big hinderance in following true spirit of appraisal is our obnoxious desire to exercise authority. Our oppressed past under feudalism has affected our genes and has made us obsessed about power. We exercise power wherever we can – the commonest expression is domestic violence – and we bow immediately when we see a more powerful person. The manager, when he sits down to appraise, feels the rush of power. Fewer managers maintain the balance and practice the virtuous elements of management, and it is a difficult task as compared to showing power which can be done without effort.
The most glaring example of lack of true spirit is displayed by some managers when they ask their subordinates to sign blank appraisal form. “Don’t worry. Trust me. I shall fill it later and you will be taken care of”, is the common comment. The subordinate has no choice but to comply, but a great opportunity for feedback and development is lost. The irony is that even some managers do it and justify it also. Some other managers fill the appraisal with a lead pencil after half-hearted discussion. What they do later is not predictable.
Lack of true spirit has seriously damaged the appraisal process. The process is still done, but the positive aspects are lost, and a sham activity remains.
Lack of Commitment
Verbal talks besides, the chain of command is not really committed to the process. The commonest excuse is that merit is not the order of the day anywhere around us, why should we follow strict merit rules? Starting from objectives setting, whatever system may be there, to periodic measurement of performance against objectives, the process is not taken in the true spirit. There are too many people and multiple levels, the fine tuning of every staff by a senior person is not possible. A faulty foundation is set due to lack of commitment. Whatever is later built upon it, remains weak and faulty.
Lack of Competence
Probably, the biggest stumbling block is that managers are not competent to run the process effectively. They do not fully understand the process and the importance of its various parts. They are unable to help their teammates in setting proper objectives, and as appraisers, they are unable to assess properly. I know from my own experience of learning and training on appraisal systems that the comprehension is difficult for the majority. It is true that the appraisal systems are not as simple as they appear to be, and it requires effort to learn to use these effectively. The spirit of appraisal is to keep the team on track of achievement, and to keep developing them to do better. If not done properly, both areas are lost.
Building competence about appraisal system is also the responsibility of the corporate. Having one or two session for introducing the concept and its application are not enough. To get desired results, training process must continue.
Lack of Relevance
The corporate owners sometimes get carried away by the shiny appeal of some program, or this being a status symbol, or some smart guy sells it to them. The biggest example in present times is installation of SAP by many companies; SAP – Business One is particularly popular. Without regard to where the corporate is in its evolution, the authorized reseller sells the program, and the consultants arrive to implement it. The staff suffers badly, morale is lost, work gets disrupted, and the pain continues for two years or more. I have seen that most pharma companies are still suffering even after five years. They keep on paying license fees, consultant fees, SAP administrator salary, and development fees. Same is true for appraisal systems.
KPIs is the buzzword for appraisals now, the more enthusiastic ones are talking about OKRs, but no one tells which is more suitable for an organization at that particular stage. Pharma companies in Pakistan do not have very complex operations and can still work effectively with basic MBO system to keep the performance up and on track. Some amount of people development can also be added here. Mature organizations with seasoned management layer may consider KPIs system. OKR is not for Pharma companies; it is suitable for high speed, high tech, highly demanding industries.
Lack of relevance causes wastage of time and resources and causes demoralization.
An appraisal system is needed to run large scale operations. Pharma companies, even those with small business volume, have operations across the country. They would have salespeople based at many towns, and away from managerial headquarters. A relevant appraisal system shall help to keep performance on track and shall help to develop people and business. The choice of appraisal system must be done thoughtfully.
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