The adoption of meritocratic practices by companies have a positive impact on results and is pursued by executives.
More and more companies have been seeking to implement and strenghten the adoption of meritocratic management practices aiming at recognizing and rewarding its employees based on merit. Organizations that embrace these practices significantly increase their chances of attracting and retaining qualified professionals, becoming more competitive, creating an environment where people feel more valued and are willing to contribute to organizational purposes.
In the business environment, meritocracy may be presented as a strategy for eficient aquisition and application of the human factor on the basis of increasing the intelectual content at work, of the importance of innovation, of creativity and of increasing the talent competition in a world that gets more and more global, complex and dynamic.
Performance evaluation is one of the closest concepts coupled with meritocracy, because it may be considered as a systematic appraisal of every employee according to the activities they develop, achieved targets and results, their expertise and development potential. It is a process which enables a judgment or estimation of value, excellence, team and individual competency and, above all, what their contribution to the company’s business really is.
The comparison between the target and what was executed is the best way to measure the employee’s participation in the organization’s results and these targets must hThe ave a foundation on the company’s strategies. The unfolding and definition of strategies is a critical stage, because if this process isn’t well conducted, the company may direct their employees’ efforts mistakenly, consequently causing a disruption between everyday work activities and the strategy. Another consequence would be demotivating employees, when they begin to believe that targets will be accomplished inspite of their efforts or won’t be accomplished at all.
Other conception that is closely linked to meritocracy is recognition and rewarding practices. Fixed wages, a 20th century product to compensate routine work times of greater stablility, is becoming insufficient and several successfull organizations are migrating to or practicing flexible and variable remuneration, tied to performance and capable of motivating and stiring people’s brio.
Compensation and reward usually consist in money value, while recognition is more intangible, related to making something public due to a great effort where someone obtained superior, or at least, satisfactory results in performance
Recently a research was conducted with executives in São Paulo with the objective of identifying their understanding of meritocratic management practices and its impact inside organizations. Their positive view on the subject of adopting meritocratic practices occurs because they believe these practices have great influence on the organization’s results and also bring a positive impact on staff management. They consider it worthwhile for the company as well as for their employees and, as a great advantage, recognition and reward were connected to performance.
Nevertheless, according to the interviwees, these companies do not adopt such practices with the required frequency and, as a concern, they pointed out the assessment’s subjectivity and the relationship among colleagues, where competition may become prejudicial and even unfair.
The interviewees desire for meritocratic practices was evident when almost half of them stated that companies, always or frequently, took into consideration such practices in deciding about filling a position.
According to the interviewees, the adoption of meritocratic practices has a significant impact on the company’s results – 78% stated this always or frequently occurs.
The effectiveness of organizational strategy can be improved through a well elaborated target program, which contemplates an aligned unfolding and systematic follow-up. The interviewees considered an advantage for organizations to have a program as this one, because they can colaborate in more ways with the company, know its priorities and focus their efforts effectively. However, they still see some problems and difficulties to make it a more robust program.
The Management Through Guidelines and the Balanced Scoreboard where pointed out as the most common unfolding method, however another interesting point in the research is that many of the interviewed people did not know or stated there wasn’t a methodology in their organization.
Also considered important were the plan of action elaboration and the periodic follow-up, but their adhesion was not elevated among the respondents. According to the executives, the factors that most stimulate people to commit to targets is that they are linked to bonuses and performance assessments.
One of the largest difficulties identified in this process is target construction, most of the times they are incomplete – not having objectives, value and/or deadlines – or, simply it is not made clear what needs to be measured or monitored. Most of the participants have individual targets which are based on their activities routine or strategic planning.
Bellow are the difficulties pointed out by the interviewees.
Biggest difficulties in a target management program
– 33% Difficulty in defining targets
– 31% Difficulty in carrying out periodic monitoring and target results management
– 30% The proposed targets aren’t in consistent with the company’s priorities and strategies
– 26% The company’s priorities change frequently
– 19% There is no time for planning
– 15% The top management does not monitor the defined targets results
– 11% There is no difficulty
– 11% People do not committ to targets
– 9% Don’t know
– 2% Others – There is no target program
– 2% Others – Difficulty in planning because is subjected to third parties
Performance evaluation is understood as important, the executives believe this is a path towards performance improvement, professional growth and a fair way to be recognized and rewarded. For the majority, the assessment is done by the direct supervisor and the items addressed are performance (behavior) and results.
Among the issues of concern, the highlighted ones were the manager’s lack of preparation (who conducts the assessment), friendship between the evaluator and the evaluated and the perception that the process seems unfair and biased.
The majority of interviewees belive that performance assessment, always or frequently, contributes to an improvement in employees’ performance.
The compensation and reward practices are important for the respondents, especially when linked to performance, because the latter is improvement by it. The most common practice is a coupling a bonus to target achievement. The greatest challenge, according to the interviewees, is making the compensation and rewarding process more transparente and, apparently, companies haven’t adopted these practices as frequently as these executives desired.
According to the respondents, the rewarding and recognition practices stimulate employees to obtain better results more frequently.
Therefore, it was observed that the interviewees were for meritocratic practices, where companies seek to recognize and reward those with the best performances. They also believe that organizations could intensify the adoption of these practices and that every one, the company and its employees, would benefit from this model.
The main benefits identified were relating performance and recognition, payment of rewards, assessment transparency and means of measurement. As for concerns or risks, the highlighted points were the subjectivity present in assessments and also in recognition and rewarding ways, and problems within the team regarding the relationship among the employees, due to the discouragement to team work and increase in internal rivalry, which can even arise the possibility of disloyal competition among them.
These executives demonstrated being eager for meritocratic management practices in the organizations they work, however, even where these were implemented, they admit improvements and enhancements are vital for some aspects. It is believed that the process is overall beneficial and the difficulties can be worked on in order to make it more robust and elaborated. As mentioned before, the glitches relate to lack of transparency in the process, larger interaction between the company and its employees when conducting assessments and feedbacks, and construction of objectives and evaluation criteria.
Companies may implant the meritocracy concept in order to obtain better resultts and keep their individuals always motivated and satisfied. Nevertheless, it’s necessary that organizations have a well structured and robust program to allow this “concept” to become a competitive advantage and not only a discourse which, after all, ends up discouraging its employees and causing losses.
Consultant at Mereo Consulting