Business and HR Part 2: Never have a PMS process for people

Performance Management System or PMS is believed to be an HR process to evaluate people’s performance in order to reward people, decide on increments, variable pay and promotions.  Therefore,  line managers see it as additional work.  One hears a usual rhetoric, “Should I do my business or should I spend time on completing PMS on the HRMS or discuss performance with team”. I would strongly suggest that line managers should not waste time if PMS is for people.  They should stay focused on business. 

However, imagine a situation where an organization employs 5000 people.  Can a CEO do everything to achieve his Objectives?  Or can the ten people in the leadership team do everything to achieve their or CEO’s objectives?  On the contrary while the leadership can provide direction, the real work is done by 4500 people at the bottom of the pyramid – salesmen, production engineer, maintenance engineer, bank teller etc.  Unless their objectives are aligned with objectives of the CEO, CEO cannot deliver on the expectations of shareholder.

A.      How does an organization align the entire organization with the objective of a CEO?

PMS is the tool to align the organization with the objectives of the CEO.  Therefore PMS is primarily a business tool and it may also provide inputs for various HR processes.

B.  How does business leadership effectively use PMS to help CEO deliver on his objective?

1.       Own: Business leadership should own and drive PMS process.

2.       Cascade: While everyone knows the importance of cascading the CEO objective through PMS, it is usually executed well in sales driven organizations.  The other businesses struggle quite a lot to effectively cascade the objectives.

3.       Helping people deliver:  Having set the goals, aligned with organization, line managers have to constantly help their team members deliver by:

                                                         i.            Providing Constant feedback

                                                       ii.            Coaching them on course correction

                                                     iii.            Demonstrating how to execute, where needed

Obviously this is again something line managers, who know their job, can do the best.

C.      What should HR do in the PMS process?

1.       Custodial Service: HR should provide the custodial service to line managers by program managing the process. In addition, it should be the eyes and ears of leaders to ensure their objectives are met.

2.       Capability Building of people managers:

HR should focus on capability building of people managers to help:

                                                               i.      Cascade the objectives seamlessly

                                                             ii.      Coach their team

                                                           iii.      Provide constructive feedback

                                                           iv.      Train team through demonstration

D.      What is their in PMS process for people?

Primarily a PMS process helps people to deliver on organization objectives, which in turn helps people, learn and grow.  The learning is based on what they do, manager’s feedback and his coaching and guidance.  This is the biggest source of learning for people.

By the way, PMS also provides input for:

1.       Learning and development

2.       Compensation

3.       Career Growth through lateral and vertical opportunities

So PMS is the mother of all HR processes. But PMS itself is a business process.

Most PMS processes that fail are people centric and do not deliver business results. Therefore business managers are not interested. In the bargain people do not learn and grow. The input that such a PMS process provides to all the other HR processes is not rich enough, making all the HR processes redundant from business perspective.