Equivalence of Goals & Rewards!

What´s most important step in performance Management? Goal setting – obviously!  You get goal setting process wrong, and all subsequent process steps possibly can´t correct damage done.

Should incumbents of similar jobs have equivalent difficulty of goals? 

Well! This situation might lead to one employee having a better chance of making an impact compared to another employee, & consequently get a better rating.

So what do we do? We have to be fair to employees!

I see 2 possible ways of addressing such a situation.

•  We could have a manager playing moderator role – ensuring equivalent (comparable) jobs having equivalent difficulty of goals.   
• We could also let imbalance in goals exist.

o  But then we have to ensure that the process is not deemed unfair. A significant portion of fairness/unfairness lies in allocation of rewards on basis of performance -  what is the rating used for  - how it impacts compensation/next year´s assignments/career moves also needs to be taken care of.  Since goals are for year, hence differentiation of rewards on basis of performance should also be short term (e.g. – bonus for the year, merit increase for the year, etc) and not long term (e.g. –career moves, succession plans,  etc).

But then,  I feel that non-equivalence of goals can be a by-product (something that happens because of changes in environmental conditions in year).  

At goal setting stage, equivalence of goals should be attempted, and that is a managerial prerogative.  This is important, because as humans we always strive for an equal chance to be unequals- and we trust our managers to provide that equal chance.

It is possible that even after this equal chance, the results across equivalent level employees vary dramatically (in terms of business impact) for equal levels of effort.  Environmental changes might significantly tilt the playing ground towards one/some employees.

Again, as managers, we can either moderate the results (factoring in environmental difficulty) or rewards in terms of business impact.

In later case, linkage of rewards system to performance system has to be tweaked. Since the performance is for the year, we should also reward (on basis of performance) for the year – a reward that at most has an impact for a year´s time!

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Sourav