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SEREBWA: Potential alternative to performance contracting

Performance contracting is static, while the workplace and employees are dynamic.

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by PETRONILLA SEREBWA

Big-read09 May 2023 - 13:56
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In Summary


  • Teamwork is a key pillar in the modern workplace. Yet performance contracting is pegged on individual work.
  • Organisations have an alternative to performance contracting in the name of Agile HR.
Vihiga Governor Wilber Ottichilo during the performance contract signing by his CECs in Mbale.

The Concubine is an African literature masterpiece by Elechi Amadi that portrays village life in Nigeria. The novel's protagonist, hardworking and beautiful Ihouma, is the attraction of every man in the village. Yet any man that expresses love for her meets with mysterious tragedy. But man after man continues to woo her, despite the tragedies that befell those who came before them.

This story, where exemplary attributes of men to win the woman seem not to bear fruit, reflects emerging performance contracting outcomes in the ever-changing workplace.

Since inception in Kenya, a decade or so ago, performance contracting has been embraced by virtually every organisation as a means to an end—improving performance. However, over time, the limitations of performance contracting have emerged, and are slowly anticipated to overshadow its benefits in the future.

Like men attracted to Ihuoma, organisations seem to be glued to performance contracting, perhaps because of the absence of alternative suitors, despite emerging evidence that something is not right. This article looks at the inherent challenges of performance contracting and explores a potential alternative.

Performance contracting is static, while the workplace and employees are dynamic. Every year, employees sit down with their supervisors to set targets. The targets are permanent and cannot be changed over this period. On the other hand, an employee will be required to meet their own targets in addition to carrying out responsibilities not set initially.

The role of employees is not static. If they are not holding for a colleague who is sick, they are standing in for another that just resigned. Occasionally, they will be incorporated into ad hoc committees and spend time, sometimes weeks, yet these committees were never envisioned when the employee was setting targets and will therefore not be scored.

Because an employee is aware that these non-target roles will not be scored, productivity on them is low and they do not work to their optimum.

The aim of performance contracting is to improve productivity, right? However, in performance contracting, evaluation of an employee’s performance is done at the end of the year. Some organisations have introduced mid-year evaluations to reduce this gap. Studies support that employees need to get their feedback almost immediately after a task. If the aim is to improve performance, waiting for a year or six months is rather long.

Teamwork is a key pillar in the modern workplace. Yet performance contracting is pegged on individual work. Limited personnel and other resources are encouraging employees to work in teams, besides the nature of work shifting to team-based delivery. Performance contracting only recognises individual efforts, despite other responsibilities delivered through teams.

From inception, performance contracting was accompanied by reward. Over time, reward for best performers has taken a backseat. The lack of motivation has seen employees lose enthusiasm for performance contracting. Equally, objectivity in the scoring process continues to be questioned. In a number of studies, participants have reported bias in performance contracting evaluation and scoring.

Organisations have an alternative to performance contracting in the name of Agile HR. Agile is a methodology borrowed from the software development field. Let by HR, Agile approach prioritises adaptiveness and speed of responsiveness within the organisation. It is effective in increasing productivity, managing teams and giving team-based feedback instantly.

It addresses some of the challenges mentioned above with a shift towards team-based timely feedback and promoting overall teamwork cohesion. Agile can be used alongside performance contracting, especially when handling ad hoc meetings, team-based roles and assigned roles not set as targets initially.

In the end, because of the tragedy that befell every man that wanted to make Ihuoma his wife, the witch doctors revealed that she could only be a concubine, not the real-only wife. While no major tragedy befalls organisations as it did the men in the novel, there is nevertheless need to explore alternatives and treat performance contracting as a “concubine” and not as the only “wife” in improving performance.

Certified Human Resource professional and member of the Institute of Human Resource Management

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