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In the current scenario, most businesses are dependent on human resources’ contribution and performance, and it is vital for organisations to optimise their resources. This can be done by assessing the productivity per individual, where employees should meet minimum expectations, which directly influence the final outcome of a company and has an edge in competitive market.
Offlate, a trend of hiring external HR firms by companies for performance reviews, is gaining momentum. Big enterprises, MNCs and conglomerates have been opting for this service. Not only does it aid their HR divisions to concentrate on their core line of business, it also enables them to make optimum utilization of time.
Benefits
HR firms bring to the table ‘developed competencies’ in performance reviews, versatility, individual and company’s experience, and help in improving a company’s process of findings and implement performance review measures effectively to uplift the performance of employees. HR firms have scientific tools to judge the psychometric approach, where inclination of the person towards work is assessed, training needs are identified and accordingly activities are assigned to the person in the future.
Often, findings from internal audit teams are not very effective and there is a resistance from employees to the internal resources. On the other hand, on hiring HR firms for performance review management, companies confront less or no resistance from their workforce. Besides, employees do come forward in sharing their thoughts and also explain their aspirations and challenges from their employer(s) to take their career graph ahead.
During the performance reviews, HR firms also recommend the corporates to run the ‘DISC’ (Dominance, Influence, Steadiness, Conscientiousness) profiling on some of the highly talented resources; those who may be underutilized or are not able to perform during a certain tenure. An external HR company may not be biased or have personal preference during the performance reviews and have a transparent system to run across the resources.
Role of Companies’ HR Manager
Without adequate support of the companies’ HR manager, a performance review exercise by an external HR firm would be incomplete and unsuccessful. In-house HR managers of companies are responsible for providing overall information about each employee, their respective departments, and feedback collection from seniors, peers, customer, vendors etc. Besides this, they assist the HR firm so that their services can match up to expectations and levels of the firm. Regular meetings with the HR agency help to discuss the progress of the audit & manage roadblocks.
Methodology
Most of the time, HR firms have substantial years of experience in performance review management in similar or other industries and they give customised inputs to every organisation. So, before taking up any project from any organisation, multiple stages of discussions take place, like general understanding about an organisation, its existing performance management system, why performance review management is being done by a HR firm, objectives of the project, expectations from the HR firm, and whether the performance review management is for a few departments or for the overall organisation.
Once, goals are apparent, the exercise takes place. After studying the existing performance management system, the HR firm brings a few techniques and tools into use, and if found appropriate, then recommends those modifications to the company and synchronises a performance management system with competencies. The company does due diligence and if found relevant, then finally execute the new PMS for all the levels.
The HR firm covers three elements in a performance management system as follow:
PMS for Organisation: First and foremost, existing PMS of an organisation is analysed and based on discussions, broad goals would be defined;
PMS for Divisions: The broad goals of an organisation are narrowed down to the divisions level. Divisions’ targets may be different from those of the firm, so therefore, different PMS is set up for different divisions;
PMS for Individuals: The performance standards devised for the departments are further segregated and developed into individual competencies. Employees are assessed based on the competencies defined for the role they are performing in the organisation.
Instance
In the recent past, we took up a project on ‘performance review’ of one of the leading IT companies. Our findings revealed that on an average productivity per individual was just 48 percent in that organisation. This was alarming for the company and contrary to what it perceived. We swiftly took initiatives, did skill mapping exercise for all employees, identified training needs of employees, found out resources requirement per assignment and accordingly deployed workforces in different projects.
Performance reviews by a third party is done for all across the levels and it takes almost six months to one year to complete the comprehensive exercise. A performance management system by a third party is generally very effective as the firm can be assured of satisfied and highly productive employees.
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