Published in Corporate Dossier ET, May 10, 2013.

I am an HR head of a large company. We have just gone through an appraisal system and there is lot of angst in the organization about the process. I feel the process has value but we aren’t doing it the right way. Can mythology offer some new way to look at it? Maybe new ideas from outside will help in making the process more robust and also changing employee views about the process.

You need to clarify: who has the problem? The appraiser or the appraisee?

Hanuman’s mother once asked him why they went through all the trouble of building a bridge across the sea, fighting demons, and killing Ravan to save Sita. “You could have just lashed your tail and in a single sweep gotten rid of the demons and saved Sita without any trouble. So why didn’t you?”

And Hanuman said, “Because no one asked me to. Besides, it was Ram’s story not mine.”

This folktale draws attention to two points. The appraisee (Hanuman) knows that he is being celebrated from his compliance not his capability but he does not begrudge the appraiser (Ram) as he knows the story is about Ram’s exploits and not Hanuman’s.

So whose story is your appraisal system measuring and what exactly is it measuring? It is not a measure of the employees alone or in isolation; it is a measure of the employee in a particular context; it is a measure of what the employees were asked to do and whether the resources allocated to them was good enough to enable them to reach the results. If the results are bad, then the problem is not just with the employees, it is also with the organization’s expectation and resource allocation. The appraisal system reveals how good, or bad, the organization is.

But that is not how we see appraisal system. We use it to determine how much should we pay the employees, who should be promoted. In other words, it is at tool that is used to determine distribution of company expenses. We use it to judge employees and measure them against each other, determine how much a person should be paid. We do not see it as an appraisal of organizational capacity and capability. It is as much about the subordinate (manager) as it is about the appraiser (manager) and the organization as a whole.

Check what makes the shareholder and CEO happier: more profits (company has done well) or better bonuses (people have done well).  This will reveal the attitude towards appraisal system.

Try this simple process. Check how many times does the CEO check if the sales has been achieved. And then check how many times he checks if the appraisal has been done. You will find that if you do not chase the CEO, the appraisal is often not done. But no one has to chase the CEO to ensure the sales are closed on time. He, in fact, is busy chasing the CFO to delay closing.

What does this mean? It reveals how much people matter in a company. How much do we truly value them. Are they simply means to an end or a valid stakeholder, as valuable as the shareholder? Often in companies we talk about company growth but often that is regardless of people growth so there is no connection between the balance sheet and the appraisal system.

But people join a company for their own growth, not the company’s growth. Nobody says this publicly; it is not politically correct. This detail is not appreciated in modern management. We are too driven by institutional models to value individuals. And so naturally, the appraisee feels invisible and is never happy with the report card. Even if he has given more his spectacular best in a particular market, he knows the bell curve of the organization will democratize him, make him equal to others, and give him the average best, which is never good enough. Naturally there is lack of ownership and a lot of angst.