Ditching the traditional appraisal system

This is that season of year when you need to do BS. I personally had bosses who had this writers block and believe me, in my around 9 years of career there was never a manager who sat with me and told his expectations and set goals for me. Height of all this happened when I went to one of my manager and asked his expectation from me, and he couldn’t come up with any expectations. Oh God, think about me, what would be my condition in that case. He did not know what I am supposed to do.

There is a famous appraisal system put together to appraise the employees of any organization. It is called Bell Curve system. Bell Curve system usually tells that any organization can have 10-20% top performing employees, rest of the employees are further divided into performing 70-80% group and then bottom 10% who are not able to perform. It goes something like this:

It also goes like this:

I have seen many organization which put so many mumbo jumbo around this bell curve system that they further divide these three groups in five or six groups and every year they waste 3-4 months of management bandwidth doing this drama.

I was thinking if I were to open my own company then how would I get rid of this system. This system does not sound like appraising the humans. It seems more like appraising cows or chickens based on their production. Even if we talk to some dairy owner or chicken farm owner, there are chances that even they might not have deployed this kind of system. In my company I am not going employ bell curve system. I am going to do away with all these systems and different groups.

What I am thinking of doing is that everyone gets a hike every year linked to market condition. Market conditions could be inflation, recession etc. If there is food inflation touching 20% in market then there is less sense giving my guys 10-12% hike. They will leave the company for a better pay cheque so that they maintain their lifestyle. Mind it, everybody getting same hike. Now comes the twist. How do I keep such employees motivated who walk extra mile, who are naturally high performers. For such employees I plan to design a SRA (special recognition award) program. Companies like Accenture and Shell already do it but in different ways. SRAs can be awarded for brilliance shown on the job. SRA might give that employee 3-8% of their CTC. This way they get rewarded for what they did on occasion. Remember, brilliance can not be like the way river flows. Brilliance is occasional and not daily routine. I highly regard the statement, “Consistent performance is better than occasional brilliance”. This way if one employee even manages to get one SRA in a year, s/he is around 8% ahead of everybody.

How about the guys who are not able to cope up with system? Who are not able to perform without constant supervision? I would say in this case their goal setting is not done properly. I would ask the manager of that employee to go and read One Minute Manager and do a proper goal setting. Oh, I forgot to mention that in my company managers won’t be there. With proper guidance technical people are capable of self organizing them. So who is going to do goal setting? See goal setting is not a rocket science. All you have to tell a person what he is expected to do in his office time. Any senior person in team can do so for a junior person. If s/he is still not coping, then we can send him to some boot camp kind of thing where he brushes up his skills (this should be provided by company).

Yes, there are outstanding questions in this approach. There are so many aspects which need tweaking, but this is how I would like to start in my company because this is how I would wish to be treated in any other company (treat the person the way you wish to be treated).