Performance over meritocracy?

Performance over meritocracy?

It is important to recognise and reward both performance and meritocracy. Both hold their own significance at crucial junctures, analyse Usha Sharma and Renuka Vembu

Pay packet essentially stands out as one of the most important attractions that lure people into a company. Work culture and ethics, job role and satisfaction, rewards and recognitions do not take precedence; they come in at a much later stage when an employee assimilates into the company and is on the job. And once into the organisation, every performer wants to be recognised and rewarded for his contribution and overall achievement.

Recently, on a worldwide level every organisation’s financial status is disrupted due to the uncertain economic situation. Every organisation has tried to come out easily. In this battle though industry was focussing to save each penny through cost cutting version, which hampered badly to the employees in the organisation where cost cutting syndrome was moving around and forced workforce to leave organisations. Though they had many years of industry experience with knowledge in their respective fields, but nothing helped them out. The pharmaceutical industry does not expect to be very affected. Ranjit Shahani, Vice President and Managing Director, Novartis India, feels, “A cost cutting situation communicated well and supplemented by leaders who walk the talk helps reduce anxieties in the workplace. Most times people like to be taken into confidence and explained the rationale behind certain decisions. If this is done and if employees are engaged in the ideation process and implementation of cost cutting measures then employees feel secure and this helps the final outcome.”

“It is obvious that when cost cutting measures are announced in the organisation, employees are bound to feel insecure in this race, good performers exit in no time and company stands to lose at the end of the day,” says Dolphy Goveas, Head Human Resource and Administration, B Braun Medical India. He adds, “Work environment changes, people only talk about cost cutting and employees are under tremendous pressure to perform, which can lead to breakdown or increas in stress levels. The solution would be transparency, wherein management clarifies their stand and involves employees in cost cutting measures by asking for their opinion and suggestion. This will help the management to build confidence in employees. When we make employees more and more accountable for their resources and performances, cost cutting naturally becomes accountability and every employee thrives to reduce the cost.”

In today’s scenario, flatter structures and multidimensional roles are both important. Meritocracy cannot be without performance. Performance and meritocracy are separated by a thin line—one being the actual output shown/produced while the other is the skill-sets, knowledge and talent possessed, which may not translate into the expected result.

Sonali Dutta, Vice President, Corporate Affairs, Bry Air, says, “Merit is the icing, whereas performance is the cake. Without the cake, just the icing will not sustain. Similarly, merit cannot be without sound performance but adds value to the performance. The appraisal process helps lay down expectations and performance criterion to rationalise on laid down values. So, while it is very important to judge an individual’s performance according to his mettle and merit, it is also important that he displays efficiency in his work and to see how he functions with people.”

Understanding the difference

“Most times people like to be taken into confidence and explained the rationale behind certain decisions. If this is done and if employees are engaged in the ideation process and implementation of cost cutting measures then employees feel secure and this helps the final outcome”

– Ranjit Shahani Vice President and Managing Director

Novartis India

Is it fair to have a difference in the pay scale for performance and meritocracy? If yes, on what basis, and if no, are these reasons enough to maintain parity? Shahani comments, “It is absolutely fair to have a pay for performance system. This helps identify fast trackers and drive a strong performance culture in an organisation. More than that, it helps motivate high performers to even better performance as well as raise the overall level of performance in the company. Though there is always an implicit negotiation going on between what management wants and expects, and what employees want and expect.”

Turning merit into performance

At the end of the day, it is the productivity that matters. Skills learnt and talent infused wouldn’t suffice if it does not materialise and showcase into an effective output and match the set scale/target. Deviance between the expected and the actual needs to be bridged because it is conversion of what lies within oneself to what is expected of them in the real world is of significance.

Goveas avers, “There can be many approaches to appraisals and it can create a hostile environment or culture, but it depends on the concerned superior and HR to ensure that these things do not happen or are nipped in the bud if they do. This is done sometimes to create internal competition within the employees.”

Skills might get an individual into the company, but the driving force to stay and grow is performance. An organisation’s role, its team of HR personnel and the immediate and middle-level managers should concentrate on this transformation—from possessing capability to converting it into something tangible, visible and measurable. Also, whether a high performer is recruited or a meritorious candidate is selected depends upon the position for which there is a vacancy needs to be filled and the organisational policy with regards to the same.

“Performance appraisal helps to rationalise performance at some common parameters. In a deeper sense, it is a formal structure that allows for timely measurement and evaluation of an individual’s performance, whilst influencing an employee’s job related attributes through such factors as increased job satisfaction and recognition, Dutta added.

Functioning effectively and efficiently, changing with changing times and adapting to the changes in the most effective manner and growing the business is the new-day mantra; hence aspects like excellence in performance should receive right and timely attention, from defining to recognition.

The variations

Promotion and designation are directly related to the ability to execute and implement tasks that can be adhered to, to achieve goals. All employees cannot be equally equipped to handle tasks, challenges and crises. Many other parameters are important while deciding promotions. Leadership qualities, people management, performance under stress, etc also count. A great performer in one function may not have the capability to perform in larger responsibilities.

Companies have their own policies and reasons with respect to recruitment, increment, appraisals, etc. During appraisals, it is most often the key result areas (KRAs) that count, not expected performance. Merit often holds prominence only while getting an entry into the company; thereafter, it is the work and productivity that needs to shine and steal the show. But it has to be featured highly in the initial stages for employees and clients to hold the company’s values and philosophy high.

For the HR team, the purpose of any such system, is not only to measure performance of employees but also to find skill deficit areas for further development through employee feedback, identify excess potential that could be better utilised, and communicate objectives more accurately to workers. Performance evaluation measures and techniques are essential for all organisations, in absence of which, the work place will remain inefficient.

“Criteria for measuring performance in an organisation need to be transparent and clearly understood by all. In addition, implementation of the appraisal system needs to be fair across the company. In such a scenario there can be no reason for a hostile work environment,” Dutta point outs. In a materialistic world, even a slight unevenness in the monetary value can create a rift. Companies need to be clear of their policies and transparent in their working and processes. At the end of the day, whatever it is, performance or merit, it all boils down to optimum productivity, performance par excellence and retaining the best employees.

Way to work out

It is possible to have different designations and wages for similar jobs in the same organisation. This depends on performance as well as the level at which an employee entered the organisation.

“If a new employee was already drawing a higher salary than his counterpart in the new company, surely he will come with a better wage and designation. Over a period, this difference is minimised based on the salary corrections and performance. This is also based on the skill and talents of the individual employee to excel in the organisation,” Goveas avers.

“The entire exercise has to be transparent and not bureaucratic. Most of the process involves subjective as well as objective inputs, while the basic tenets may be same for all organisations, the actual process has to be customised as the need of the organisation, the industry segment, categories of employees, size of organisation and many other factors,” Dutta sums up.