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hr.economictimes.indiatimes.com | August 9, 2021
Conducting an effective performance conversation is more of an art than a science. It isn’t an exercise where managers play the role of judge and jury.


Brothers, Lucky and Plucky, are star salesmen selling ‘MaX’ personal computers to B2B customers in different geographies and enterprise mix. The pandemic has affected their sales performance. Nevertheless, Lucky and Plucky have managed to beat all odds and achieve 105% and 120% of their sales revenue targets respectively. The million-dollar question is who is a better performer?

It is a no brainer that all things being equal, Plucky has beaten Lucky this year. In most cases, the Sales Head would have had a friendly performance appraisal conversation with Plucky with his speech littered with ‘Shabaash puttar’ and ‘Great job done’. He would also have rated Plucky higher than Lucky and awarded him a bigger bonus but pray, in life, are all things ever equal? Is it possible that the opposite can be true where Lucky has outperformed Plucky? Would it be fair to the brothers, if their performance was evaluated purely on the basis of sales outcomes or are there other factors?

In my two decades of experience as a Human Resources professional, I have observed that most managers across functions adopt a narrow perspective of evaluating performance which is focussed on the ‘What’ or ‘What is achieved against the target?’. Moreover, if the key goal is achieved, which is the sales revenue in this case, they turn a Nelson’s eye to other auxiliary goals, if any. This tends to stunt the employee’s growth as learning from past actions tends to be restricted. However, this is not very apparent and organisations continue to maintain the status quo.

Few managers go to the next level of evaluation, which focusses on the ‘How’ or ‘How was the target achieved’ or even further, by finding out what were the behaviours displayed during the period in question. While this requires a lot of preparation and longer performance appraisal conversation, the additional investment in time will go a long way in achieving fairer evaluations of performance as well as greater learning from past actions. This leads, as a consequence, to higher engagement and productivity in the team.

Let us go back to Lucky’s and Plucky’s performance evaluation. Considering that the case is related to B2B sales, the manager could have asked the following questions, which will make the performance appraisal fairer and incisive.

- How many new customers did you add in the last year?

- How many customers did you lose last year? What are the top three reasons for them to defect to the competition?

- What is your net promoter score (NPS)?

- What is your share of the market?

- What is your profit from your sales achievement?

- What are the challenges you faced last year, especially that affected target achievement?

- How many of the top 20% of your customers buy their products only from us? Do they also buy from the competition? Has there been a change in their order patterns or order mix in the last year?

- How many complaints did you receive last year from top 20% of your customers / all your customers?

- What is your compliment/complaint ratio?

- What have you done to improve your customer relations last year? Did you introduce any new rituals in the sales process? How many events did you conduct?

- What changes did you introduce in your sales process?

- How many kaizens did you contribute last year?

- How many hours did you invest in your personal training & development? What did you do to upgrade skills in your team?

- What were the top five learnings last year?

- In hind sight, was your sales-strategy right? What should it have been?

- What threats and opportunities do you foresee in the coming year?

It will also be prudent for the Sales Head to examine the environment in the territories where Lucky and Plucky operated by determining the brand equity of ‘MaX’ in both territories and how salient ‘MaX’ is as compared to competing brands. Further, do both territories have good customer support and after sales service facilities as they have a significant impact on sales numbers. Last but not the least, were the goals given to Lucky and Plucky for the period in question, realistic?

The performance related questions mentioned above are not exhaustive and there can be many more depending on the product, industry et al. Most of the above questions are related to a key performance metric or indicator (KPI) and it is recommended that a sales manager be appraised on at least 5-6 predetermined KPIs rather than just sales revenue. Moreover, these KPIs should be a balanced mix of lead indicators like the number of sales calls in a week and lag indicators like NPS or market share.

Similarly, professionals in other functions should have about half a dozen metrics with a good mix of lead and lag indicators against which their performance should be measured to make a fair appraisal of how they performed at the end of a period. These metrics could change with time depending on the organisation’s strategic goals and what success means to the sales head. Is it sales turnover, NPS, market share, customer experience etc?

Performance conversations can be very meaningful and transformative provided they are taken seriously. We need to go beyond tasks and results and focus on the behaviours that led to those results. When done on a continuous basis, they can put individuals and teams on a steep learning curve, improve performance and galvanise the team. That’s how fighter pilots, formula1 racers and sportsmen raise the bar as they thrive on constant feedback.

Conducting an effective performance conversation is more of an art than a science. It isn’t an exercise where managers play the role of judge and jury. It isn’t a monologue. In a good conversation, the manager listens more than he talks. It should be more of a coaching conversation where the appraisee is assisted to identify his shortcomings and what he needs to do to improve his performance in the future. If the manager is supportive and caring, he is more likely to be effective in the exercise. Research indicates that even the seating position of the manager and appraisee has an impact on the conversation. Side-by-side seating or being seated at right angles to each other are preferable to facing each other.

Managers would do well by experimenting with alternative methods of conducting performance conversations as the traditional methods of giving feedback tend to make individuals more defensive and lead to mistrust, which can adversely affect engagement. The least they can do is to tweak the way they conduct performance conversations.

A little creativity on how, when and where you conduct these crucial conversations can make this exercise mutually beneficial and worth everyone’s time and energy. Who says we can’t have a meaningful performance conversation in a pub over a glass of beer or during an evening walk in the garden? Who says we can’t have a reflective performance conversation with our team?

During reflective conversations, a concept that was developed by the Mahindra Group, the dialogue between the manager and appraise isn’t a verbal ping-pong. They have the liberty to respond to a question after a pause and due reflection. This group exercise has the potential to fuel ideas which can lead to innovative solutions, practices and rituals that can make the appraisal process more effective.

Why can’t we focus on ‘feed-forward’, a concept made popular by Marshall Goldsmith? Feed-forward has been found to be more effective than feedback as appraisees’ tend to be less defensive. Even though ‘ratings’ are passé, why can’t we do an informal peer appraisal to rate our team members as this input from internal customers can bring more fairness to the exercise.

Aggregate analysis of engagement reports across industries the world over show that the statements related to performance appraisal have one of the lowest scores. Consequently, it makes business sense for us to unleash our creativity to make performance appraisal conversations more engaging and meaningful to the team.

Who is the outperformer, Lucky and Plucky, is a matter of perspective and an informed decision can be taken only by looking at performance using a series of pre-determined metrics. Managers will do well by conducting regular performance conversations by preparing for them and using a coaching style. A caring, supportive and creative approach on their part can result in greater learning from the exercise, higher engagement and above all, give a good return on everybody’s time.

(Source: https://hr.economictimes.indiatimes.com/news/workplace-4-0/performance-management/who-is-the-outperformer/85167859)