Why KPI performance appraisal doesn't work in China?

Many foreign excellent management systems are unaccustomed in China. Just like KPI performance appraisal, they are not well implemented in China, and it is even worse to use the local management method of human governance. Why? Why is the enthusiasm of learning balanced scorecard method and KPI in China very high, but the effect is often limited? One of the main reasons is that the specific management conditions and theoretical premise required by KPI management model are not really clear. Theory is established on the premise of hypothesis (hypothesis refers to the conditions under which analysis and opinions can be established). Setting the premise is a concrete manifestation of the rigor of thinking, which is also one of the essence of management science. Once, Einstein said to his students, "There are two workers who are repairing an old chimney. When they climb out of the chimney, one is clean, but the other is covered with coal ash. Which of them will take a bath?" A student replied, "of course it's the man with the soot all over his face." Einstein said, "Really? Please note that the clean worker saw another man with soot all over his face, and he thought it was dirty to climb out of the chimney; And the other saw each other clean. Let me ask you again, who will take a shower? Another student was very excited to find the answer: "Oh! I know! Clean to see another dirty, feel dirty; But when dirty people see each other clean, they feel that they are not dirty! So the clean man must have gone to take a shower. All the students seem to agree with this answer, only Einstein said slowly, "This answer is wrong. Since both of them climbed out of the old chimney, how could one be clean and the other dirty?" If the premise is incorrect, the result is definitely meaningless! Without the established preconditions, the conclusions drawn from the analysis are meaningless and even wrong. There will be different conclusions under different assumptions. The same is true of management issues. The use of KPI is based on a ceramic enterprise in Foshan, Guangdong, whose market sales performance hovers around 5 million yuan year after year. This enterprise is a typical family-run private enterprise. The boss's three relatives and six relatives are all over the management positions of the enterprise. It is very prominent that there are overstaffed people in the enterprise and the plan can't keep up with the changes. There are many hills in various institutions, and the internal friction of enterprises is serious, which leads to the confusion of corporate values. Many things can only be effective if the boss asks himself. In order to realize the second leap of the enterprise, the boss made up his mind to implement changes in the enterprise. After process improvement, enterprises implement ——KPI assessment, hoping to improve production and operation performance. However, enterprises have applied it for a period of time and found that the cost has risen instead of falling, and some middle-level companies have finally had to return to their old ways. The reason is that enterprises mechanically apply management tools when using KPI assessment method, and fail to fully understand the assumptions of this method. For example, only the word assessment is valued, but there is no agreement on the assessment standards and contents of employees, and it is taken for granted that "the plan can't keep up with the changes, and the natural implementation results are not satisfactory. This phenomenon is not uncommon when China enterprises introduce advanced management tools. How can we achieve the perfect combination of management tools and specific management practices in China? What specific preconditions should China enterprises pay attention to when importing KPI methods? Hypothesis 1: The enterprise has a clear value orientation and goal. The fundamental starting point of performance appraisal system is to achieve organizational goals. Obviously, the prerequisite for the application of this tool is that enterprises should have clear value orientation and goals. But how many enterprises in China have clear value orientation and development goals? Enterprises themselves don't know where to go, let alone performance appraisal. Hypothesis 2: The responsibilities of employees are clear. Clear responsibilities are not only the premise of performance appraisal, but also the basic requirement of enterprise management. Since the performance of employees' duties is the main basis of performance appraisal, it is obvious that employees' duties must be clear, but the enterprise obviously does not have this condition. In this ceramic enterprise, due to the rapid increase in demand for building materials, the scale of the enterprise has expanded rapidly. In this process, the enterprise has not established a set of standardized management systems, and the phenomenon of "setting posts for different people, multi-leader and leapfrog command" is everywhere. The boss is the chairman and general manager, the proprietress is in charge of finance, the proprietress's sister is in charge of purchasing, the proprietress's brother-in-law is in charge of marketing and sales, and there are other relatives in every corner of the enterprise. The proprietress directs the workers in the workshop, and the boss personally asks about marketing. Multi-head leadership not only interferes with the establishment of the authority of middle-level leaders, but also affects the value standards of grassroots employees. How can an enterprise like this implement performance appraisal? Hypothesis 3: Managers have the motivation to objectively evaluate their subordinates' job performance. Since managers are directly responsible for performance appraisal, the obvious prerequisite is that managers have the motivation to objectively evaluate the performance of their subordinates, that is to say, they should dare to shoulder the basic responsibilities of a manager. However, whether such preconditions can be met is still a question mark for many enterprises. In many traditional state-owned enterprises, "letting things go is the basic philosophy of many managers. When managers understand that the results of performance appraisal directly affect the income and appointment and dismissal of employees, it is natural and unnatural to give poor subordinates a good assessment result, while the assessment results of outstanding subordinates have not stood out, and the review or approval of assessment results has always been a formality. In this way, the performance appraisal can only become a mere formality. Hypothesis 4: Enterprises are willing to pay a certain assessment cost. Management needs cost, and the finer the management, the more management cost it needs to pay, so does performance appraisal. To make the performance appraisal system really work, it takes money and time. From an economic point of view, whether it is worthwhile to invest in cost management lies in the fact that the benefits obtained from this management can be higher than the cost invested. Whether the performance appraisal is worth making great efforts to implement is puzzling to many enterprise managers, because the investment and effort for performance appraisal are real, but the benefits brought by performance appraisal are unknown, and how to accurately measure the benefits brought by performance appraisal is also a difficult problem. It is normal for an enterprise to implement KPI assessment, which will bring turbulence or even decline in performance in a short period of time, which is also one of the costs that the enterprise should pay. Successful enterprises at home and abroad have told us by practice that it is necessary and economical to implement performance appraisal management for enterprises that expect sustainable development. Therefore, enterprises should pay financial costs for performance appraisal, and managers of enterprises should pay time costs for performance appraisal. Hypothesis 5: the existing salary level or career opportunities of the enterprise are attractive to the assessed. Kpi Performance Appraisal Table The main reason why employees pay attention to the performance appraisal results is that they expect their work results to be rewarded in salary or career development. If employees are indifferent to the performance appraisal results, it is hard to imagine what role the performance appraisal system will play. When carrying out performance appraisal, some managers always complain that the results of performance appraisal are difficult to cash. If the income increases through the appraisal results, everyone will be happy, but the income decreases, that person will definitely resign. Because it is easy to resign but not easy to introduce, after a long time, performance appraisal will inevitably become a mere formality. For such enterprises, the main reason for the failure of performance appraisal is that the existing salary level or career opportunities are not attractive enough for the assessed, so we should re-examine the salary level and the construction of employee career development channels, rather than staying on how to improve the performance appraisal system. When learning a theory and method, enterprises in China should first understand what its premise is, especially consider the differences in different industries, different growth stages of enterprises, preferences and culture, legal and economic policies, business concepts and so on. Let KPI really play a role in investigating the KPI practice of domestic and foreign enterprises. In order to achieve the expected effect of performance appraisal, some use behavior anchor scoring method, while others use key event method; Have a plenty of monthly assessment and have a plenty of annual assessment; Some are assessed by direct superiors, while others are assessed by 36 degrees, which can be described as "eight immortals crossing the sea, showing their differences." However, a truly effective performance appraisal system has the following characteristics: Feature 1: The realization of organizational goals is regarded as the most fundamental starting point of performance appraisal. Management is not an end but a means, and so is performance appraisal. In terms of management control theory, performance appraisal is not only an important human resource management function, but also an effective management control means to protect organizational goals. Organizations decompose organizational goals into individual performance goals through performance appraisal system, and at the same time measure the current situation of the organization through performance appraisal, and compare the current situation with future goals to find the gap, on this basis, adjust and optimize the resources (human resources is only one of them) and management mechanism of the enterprise, continuously narrow the gap, and finally realize the organizational goals. Therefore, achieving organizational goals is the real starting point of performance appraisal. Feature 2: The performance of employees' duties is the main basis of performance appraisal. What should be assessed in performance appraisal? A very common saying is "virtue," "ability," "diligence and" achievement. Does a person's morality and ability change every month or quarter? Can the performance appraisal system accurately measure this change? The answer is obviously no. In fact, this understanding is to expand the extension of performance appraisal. "Virtue," "ability," "diligence" and "achievement" are comprehensive appraisal of employees rather than performance appraisal. "Performance appraisal, as its name implies, is to assess" performance "and" efficiency ",that is to say, to assess the performance of employees' duties. Therefore, when setting assessment indicators, it should be set reasonably according to different positions, that is to say, the performance of employees' duties should be regarded as the main basis for performance appraisal. Feature 3: Managers are directly responsible for performance appraisal. Who should be responsible for the performance appraisal? Many people blame the human resources management department, in fact, this is a performance appraisal. Admittedly, the human resources department is the organization department of performance appraisal, but the main responsibility of the human resources management department is to establish and set up a performance appraisal management system that can help managers better evaluate their subordinates' work, so it is not direct responsibility but indirect responsibility. Only managers at all levels know the organizational goals and how to decompose them into personal goals reasonably, so as to realize the fundamental purpose of performance appraisal; Only managers at all levels can fully understand the performance of their subordinates' duties and make the assessment results not deviate from the objective facts. Therefore, managers at all levels of the organization are directly responsible for performance appraisal. Feature 4: Assess employees' performance through quantitative methods. The management of modern enterprises is becoming more and more sophisticated. It is not enough to make a qualitative judgment on the employees' performance, but to describe the employees' job performance quantitatively. At the same time, the maturity of modern management technology (such as IT technology) also provides theoretical support and technical means for quantitatively measuring employees' performance. The organization and implementation of performance appraisal is to quantify employees' work performance. The complexity of performance appraisal system is reflected in how to quantitatively evaluate employees' work performance. How to accurately identify the gap between employees' actual work performance and predetermined goals? How to accurately measure the gap between two employees' job performance? This is the most important responsibility of the human resource management department as the performance appraisal organization department. Feature 5: The results of employee performance appraisal are directly used in the decision-making of employee salary adjustment or employee career development. Most enterprises that implement KPI directly link the performance appraisal results with employees' salary levels and career development opportunities. They hope that employees can pay enough attention to performance appraisal, and at the same time, salary adjustment and decision-making based on performance appraisal results can reflect the sufficiency of decision-making basis. In fact, such an arrangement has more positive significance: on the one hand, linking the performance appraisal results with employee compensation can allow employees to share the operating benefits of the enterprise, or share some operating risks when the operating benefits of the enterprise are not good; On the other hand, the combination of performance appraisal results and employees' career development can effectively realize the organic combination of employees' development and enterprises' development, and help to shape the corporate culture in which employees and enterprises share the same fate. Summing up "Happy families are similar, each unhappy family is unhappy in its own way. Management can not be separated from specific human nature, historical and cultural traditions, natural endowments, human resources quality, industry, entrepreneurial style and other factors. Because of these conditions, it is particularly difficult to copy experience. Why is the enthusiasm for learning GM and Toyota in China very high, but the effect is often limited? One of the main reasons is that the specific management conditions required by GM and Toyota management models are not really clear, that is, the theoretical premise of Toyota and GM model. Theory is established on the premise of hypothesis (hypothesis refers to the conditions under which analysis and opinions can be established). Setting the premise is a concrete manifestation of the rigor of thinking, which is also one of the essence of management science. Theory is the induction and refinement of a large number of cases, and theoretical abstraction is the process of finding the uniqueness of cases. The study of individual cases also contains idealized elements, so it is necessary to emphasize the theoretical assumptions. Assuming that the conditions are not necessarily completely consistent with the actual conditions, it is necessary to set the conditions at this time and put forward new theories, viewpoints and methods accordingly, instead of clinging to the shortcomings and carving a boat for a sword. When many enterprises import management tools, they often don't think deeply about the specific use and system requirements of these management tools. Managers are wishful thinking and turn limited truth into universal truth. Without in-depth thinking, the result is often mistaken. Even if scientific management tools are applied and advanced ideas are introduced, in the end, it is often half the effort. This reflects China people's lack of rigor and scientific attitude. Therefore, when learning a theory and method, China enterprises should first understand what is the premise of the theory. In particular, we should consider the differences between different industries, different growth stages of enterprises, differences in preferences and cultures, differences in employee maturity, differences in basic management, differences in legal and economic policies, and differences in business concepts. On the one hand, learning this rigorous science is conducive to guiding us to turn experience into theory and method and guiding enterprise practice; On the other hand, when we study ideas and methods, we should deeply understand and know the specific existence conditions of the theory, so as to learn more effectively.