By - Sinhani Prem
Source: The World Economic Forum
INTRODUCTION
"If an organization wants to be able to work on opportunities, it must be able to abandon the unproductive and slough off the obsolete" – Peter Drucker (Drucker, 2012)
Peter Drucker is arguably the greatest management thinker of the last century (HRIQ Editorial Staff, 2009); with Drucker’s four-pronged strategy of “innovation, continuous improvement, technology and knowledge worker” for increasing employee productivity ageing like fine wine.
The COVID-19 pandemic has forced most organizations to shift almost completely online; and, along with difficult organizational challenges brought to most companies who have had to adapt to this “new normal”; often human resource departments have gotten neglected, except during the end of the year- during the employee performance appraisal period.
ORGANIZATIONAL BEHAVIOUR THEORIES OF PERFORMANCE APPRAISAL METHODS
Robbins, in his book titled “Organizational Behaviour” (Roberts, Judge, & Campbell, 2017) has described theories of performance appraisal methods. He explains the concept of a 360-degree evaluation method focused on “pooling feedback from all of the employees’ customers”. (Roberts, Judge, & Campbell, 2017) Under the 360-degree feedback evaluation method, he writes of the different ways to solicit this feedback- written essays, critical incidents, graphic rating scales, behaviorally anchored rating scales (BARS) and forced comparisons. (Roberts, Judge, & Campbell, 2017)
Written essays are probably the simplest and most self-explanatory of these methods- they require an evaluator to elaborate on an employee’s “strength, weaknesses, past performance and suggestions for improvement”. Critical incidents require evaluators to lay down the specific incidents that made an employee effective or ineffective. Graphic rating scales are the most used performance appraisal method, usually comprising of questions such as “Does the employee deliver work on time, according to schedules?”; containing multiple-choice options such as “Usually late” and “Mostly on schedule”. (Ahoy Team, 2020)
BARS is a tool used for performance appraisal that combines the critical incidents and graphic ratings scales, requiring evaluators to rate employees for a specific incident using five, seven or nine-point scales. (AIHR Analytics, 2020) Behaviour observational scales (BOS) are similar to this method, in that they allow the evaluator to gauge the frequency of efficient work done by the employee. (American Psychological Association, 2020) Finally, forced comparisons are carried out either in terms of group order rankings— requiring the evaluator to rank the employee within the group using classifications such as the “top half” and the “bottom half” of the team— or in terms of individual ranking from “best to worst”. (Roberts, Judge, & Campbell, 2017)
Source: (Roberts, Judge, & Campbell, 2017)
(The above diagram explains the 360-degree performance evaluations by gathering feedback from all of the employee’s customers)
However, Pulakos and O’Leary (Pulakos & O'Leary, 2011) write that traditional performance management procedures are too formal and rarely beneficial as they involve “burdensome administrative steps, processes and tools” (Saks & Gruman, 2011) that generally only work in theory and not in practice because of their disconnect from day-to-day activities. Therefore, improving manager-employee relations seems to be a better way to enhance performance. In 2002, Brian Jensen, head of Global Human Resources at Colorcon, told his team that the company would not be giving out annual reviews of employees anymore (Tavis & Cappelli, 2016). While this may have seemed unconventional, Jensen also explained a new model of performance management (in a subsequent Wharton lecture) that involved “frequent, informal check-ins between managers and employees” (Tavis & Cappelli, 2016).
The ongoing coronavirus pandemic has increased occupational stress in employees. Job stress continues to rise through the pandemic as employees feel the need to devote more hours to their jobs, a consequence of working remotely, and hence end up spending lesser time indulging in leisure activities and with their families, contrary to common belief (Rahman & Masri, 2020).
The American Psychology Association reported that employees were more likely to quit their jobs due to stress (American Psychology Association, 2019). All of this has called for better management of employees and using performance ratings as a medium of motivation.
Although one can observe instances of straying away from traditional methods of employee performance appraisals- in the cases of Adobe, Dell, Microsoft, Deloitte, Accenture, General Electric, among others- the COVID-19 pandemic demanded a lot more than better management techniques. Only vehement managers have been able to pull through the past year of crisis management. This short paper will analyze employee performance and management techniques applied by Facebook, Inc. during the COVID-19 pandemic period of FY 2020-21.
FACEBOOK’S PERFORMANCE MANAGEMENT SYSTEM
Facebook’s performance management employs a bi-annual review format. They also make use of a continuous stream of 360 real-time feedback. This process essentially spans over two weeks where an employee has to collect peer feedback, usually from 3-5 peers, following which they have to write a self-assessment. Molly Graham, a software engineer from Facebook explains that following this “managers read all the peer feedback and the self-assessment and determine a ‘Performance Assessment’ or rating of the employee's performance over the last six months as well as whether or not it is the right time to promote the employee” (PerformYard Staff, 2019). The incorporation of this method of performance review has allowed Facebook to provide real-time reviews and also be fair, transparent and development-oriented (Goller, Gale, & Grant, 2016). Therefore, Facebook’s performance reviews had been working (since the pre-pandemic era) to boost employee morale and aid their development rather than to discourage them.
Facebook’s top employee performance ratings include “redefines”, “greatly exceeds expectations” and “exceeds expectations” (Seetharaman, 2020). With the COVID-19 pandemic, Facebook gave almost all of its full-time staff of roughly 45000 the same “exceeded expectations” review to make sure they were all receiving bonuses and to keep up morale during these unprecedented times. Facebook also sent its contractors home with pay, including
content creators (Seetharaman, 2020). Although Facebook gave out the same reviews, they didn’t cease to collect peer-reviews as per their bi-annual review structure. This uniform performance review allowed all 45,000 employees to receive a $1000 bonus during the coronavirus pandemic.
THE “NEW NORMAL”
The coronavirus pandemic was unprecedented; moving into a completely remote workplace may have caused distress to employees: they were unable to manage their daily schedules and mental health. However, every dark cloud has a silver lining, and many employees have begun to favour the pros over the cons of working remotely as this has allowed them to spend more time in their comfort zone and allowed them to think more freely. There has been an increase in the trend of working remotely, and as indicated by the following diagram and graph, an increasing number of American employees are choosing to work remotely.
Source: Gallup Panel (Brenan, 2020)
(The above statistics indicate an increased willingness of employees to work remotely during the coronavirus pandemic, even as government restrictions began to ease. Approximately 60% of employees in the IT sector have begun to favour working remotely, and the COVID-19 pandemic has been influential in allowing employees to favour this new method of working. )
Source: Gallup Panel (Brenan, 2020)
(The above graph sourced from the Gallup Panel shows the willingness of employees wanting to work remotely rising steeply due to the coronavirus pandemic)
FACEBOOK’S NEW HYBRID MODEL
CEO Mark Zuckerberg publicly announced that the COVID-19 pandemic has led him to envision a 50-50 structure with one half of the workforce completely remote in the next 5-10
years (Sandler, 2020), subsequently calling Facebook the “north star” for other companies in the IT sector to follow. Almost 95% of Facebook employees worked remotely during the last year, however, CEO Zuckerberg has stated that this would not continue as the company would be keeping its real estate, even if it would only allow half his workforce to be present. This sort of hybrid model seems to be working in the favor of employees, enhancing their performance as they are present in their comfort space (their homes) and getting rid of rigid and established workplace structures (Venkatesh & Zhang, 2013).
It is also evident in Facebook’s performance during 2020 that the “new normal” has worked in favor of their employees.
Facebook’s financial highlights for Q4, FY 2020:
Source: Facebook Investor Relations (Facebook, Inc., 2020)
(The above statistics are a highlight of Facebook’s Q4 performance in FY 2020. Facebook clearly continued to grow during the past year and this growth can be accredited to good crisis management)
Facebook’s outstanding performance continued to peak despite the COVID-19 pandemic. Daily Active Users (DAUs) increased 11% YoY to 1.84 billion as of the fourth quarter of 2020, with Monthly Average Users (MAUs) increasing 12% YoY at 2.8 billion. The highlights of FY 2020 can be found in the above picture.
CONCLUSION
According to a Harvard Business Review article, the COVID-19 pandemic has increased biases, especially against women and even more against women of colour (Mackenzie, Wehner, & Kennedy, 2020). It suggests a process of “criteria monitoring” essentially involving three steps- defining criteria of evaluation, using a uniform evaluation system and encouraging evaluators to be fair and equitable (Mackenzie, Wehner, & Kennedy, 2020). SHRM also lays down a template for managers to consider during the COVID-19 pandemic; in which they recommend including a communication segment to allow employees to record their experiences and comfort levels with working in the “new normal” (Falcone, 2020).
In conclusion, organizations seem to benefit from frequent and informal performance management mechanisms. Facebook’s employment of the 360 real-time feedback system even through the coronavirus crisis, will allow them to keep up with their continuous assessment mechanism; while also providing support, valuing their employees, and keeping up morale during the coronavirus pandemic with uniform feedback and bonuses. In contrast to most other companies in the IT sector such as Google, Facebook did not suspend performance management and instead used it to their benefit. Considering Google as a good role model, many companies decided to suspend employee performance surveys for at least 6 months. However, it is evident that it did more harm than good, with some employees being laid off and others losing bonuses along with depression, loneliness and other mental health issues that have arisen because of the pandemic. In general, most organizations have been advised to increase transparency and be unbiased in their performance appraisal methods. The technique employed by Facebook for employee performance management has been transparent and unbiased, since even before the pandemic. The equitable performance rating and continued bonuses during the coronavirus pandemic have helped boost employee morale and consequently performance, through positive enforcement. Facebook’s performance assessment model has therefore worked to the advantage of employees; the reflection of which can be seen in the company’s performance during the last financial year. This is indeed an example of stellar crisis management by Facebook.
Sinhani Prem is a second-year law school student at JGLS.
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