HR Leadership Column

Seeking the 'Holy Grail' of HR

Yahoo! and Microsoft recently announced they are revamping their performance-management systems in very different ways, but the two also now share a best practice that shouldn't get lost in the debate over the pros and cons of forced rankings.

Monday, November 25, 2013
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I have a confession to make. 

Toward the end of the year, as the holiday season approaches, I spend more time reflecting on how truly blessed I am. I have a happy and healthy family, a circle of friends I adore and I'm doing what I really want to be doing. 

And while I reflect on these blessings, I must confess that I'm thankful for one more.

It's the end of the year, and I don't have to complete a performance evaluation for anyone. Having done it for decades, for more than a hundred employees, I not only don't miss it, I'm grateful I don't have to do it. 

No matter what performance-management system we used, I believed that I owed my direct reports honest, meaningful and actionable feedback. And for every evaluation I did, I always wondered if it was frequent enough, if I could have done a better job, or if there was a better way.  

That may be why I was particularly grateful as I read the recent news about Microsoft and Yahoo!'s approaches to performance management. While Yahoo! has adopted forced ranking of employees, Microsoft has decided to eliminate forced ranking.

Yahoo! reportedly instituted a quarterly evaluation process that requires managers to rank their staff essentially on a bell curve, and those who have missed established targets at least twice are likely to lose their jobs. (In the face of multiple news reports critical of the ranking practice, Yahoo!'s CEO Melissa Mayer denied that the rankings were forced and insisted they were just guidelines.)

At the same time, Microsoft announced to employees that it was eliminating its numerical rankings in favor of more frequent and qualitative employee evaluations. The company will be "optimizing for more timely feedback and meaningful discussions to help employees learn in the moment, grow and drive great results."

The announcement of these two seemingly divergent paths highlighted something I think HR executives already know: There is no perfect performance-management system, and organizations will forever be tinkering with or redesigning their systems to try to improve results. The perfect performance-appraisal system is the Holy Grail of the HR profession.

Yahoo! and Microsoft are examples of two companies picking different approaches, each making a judgment about what's necessary, at this point in their evolution, to drive profitability. While one may rank employees and the other claims that it will not, I think what's most telling is that both are placing greater importance on giving employees clear goals, with more frequent and meaningful feedback.

Clearer goals and more frequent and meaningful feedback to employees: This is what will really drive profitability. 

HR executives continually remind and encourage managers to set clear, achievable goals and to provide frequent feedback, and most managers understand the importance of doing so. But the press of business, competing priorities and a reluctance to face conflict all conspire to keep it from happening. 

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What results are performance-management systems with mandated schedules for feedback, with a mad scramble to complete some designated form to prove the feedback was provided. The focus shifts from ensuring that employees are armed with clear direction on what's expected of them and meaningful, actionable feedback to simply documenting that feedback was given.

So, if I'm asked what I think about what Yahoo! and Microsoft are doing, I'd say it's interesting and that I hope their newest approach to performance management works for them. I'd also say I'm sure each company will continue to review and modify their performance-management programs in pursuit of that Holy Grail. 

But in both instances, I'd also praise them for focusing more on ensuring that managers provide clear expectations and feedback to employees. I hope HR executives demonstrate their leadership by doing some of the same: pushing for clear goal-setting and more meaningful and frequent feedback to employees, while also arming managers with the skills and abilities to make that happen.

That said, I'm grateful that I personally don't have to design and implement another new and improved performance-management system. 


Don't hate me for it.

Susan R. Meisinger, former president and CEO of the Society for Human Resource Management, is an author, speaker and consultant on human resource management. She is on the board of directors of the National Academy of Human Resources.


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