Modern performance management in organisations relies largely on rewards that are based on outcomes of actions performed.

The underlying philosophy is that the organisation must deliver results in a controlled, predictable manner, and that each member of the organisation must therefore deliver his share in an equally controlled, predictable and measurable manner. The quest for a high degree of control on outcomes however, has major negative consequences. Firstly, in an environment where only end results matter, individuals begin to take shortcuts to achieve results and compromise on quality of effort or in some cases integrity.

Secondly, the organisation as a whole becomes resistant to change, because an obsession with outcomes stunts initiative and experimentation. After all, why try anything new when results could be completely unpredictable, and qualify the initiative as failure. Finally, the lack of control over outcomes of actions can itself interfere in the process of accomplishing those outcomes by creating stress, insecurity etc.

Orientation What is required then is an expanded view of what performance management means, and what it is supposed to accomplish. Here it may be instructive to look at the idea of Karma Yoga.

The fundamental premise of Karma Yoga is that one is entitled to only perform actions, but not necessarily to the fruits of those actions. It entails performing duties with a selfless attitude without attaching oneself to rewards.

The philosophy of Karma Yoga also recognises that outcomes are a function of a multiplicity of factors coming together, with effort being only one component. The intuitive truth contained in this approach to effort can be applied to the field of performance management to create organisations that are more ethical, creative and uplifting for its members. Potential features of such a performance management approach are outlined below.

Reward inputs over outputs Traditional performance management is obsessed with outcomes, particularly those that are quantifiable.

However, a karma yogic system may instead focus on input efforts, rather than outputs. Designing the right kind of input measures will be critical here.

A good input measure is one which measures the quality of specific efforts, which in turn will produce the desired outcomes automatically. For example, if the end result is to sell X units of a product, the input measure for a person selling it would be the number of high quality pitches made to the right customer segment.

Not all input measures will be objective and measurable by a reviewer. Thus significant capacity development of these ‘reviewers’ may be required so that they are both able to evaluate subjective input efforts, as well as design good objective input measures. Another important issue that rewarding inputs addresses is that it implicitly encourages new initiatives on the part of individuals, who now only have to worry about putting in high quality inputs without fear of failure on the results front.

Reward teams over individuals Performance management as understood today is highly individual driven.

However, no success in an organisational context is possible without a team where each player contributes his bit. Thus the idea of individual stars may not quite serve any purpose, particularly when viewed through the lens of Karma Yoga which advocates selfless service as against ego-centric efforts.

It is quite easy to grasp that a system where participants function with a selfless attitude is bound to work smoothly in the long run, and that highly individual specific rewards may no longer make sense in such a system.

A shift to team-based rewards would fit more elegantly in this situation. This may of course create situations where some team members don’t contribute their fair share. However, it can be expected that each team will organically figure out ways to handle this situation over time.

Responsibility-based individual rewards In a system where selfless team based performance and sharing of rewards is the norm, it will still be important to ensure that star performers remain motivated.

This should be done primarily through offering wider responsibility to the stars. This could take multiple forms including expansion of role, elevation to higher levels in the organisation, inclusion in higher level decision-making in the organisation, and so on.

Of course some of these rewards may well involve individual-specific monetary dimensions, but only pertaining to the experience level of the individual and the position occupied by him in the hierarchy.

In other words, the organisation’s primary reward mechanism is team-based, and the secondary reward mechanism is enhancement of responsibility of the high contributors.

Difficult enterprise Re-aligning an organisation to a collection of selfless teams rewarded collectively based on input efforts will of course not be easy. It may be disorienting for some, given how wired society has become to value only output results.

However, with the right kind of capacity development, people can be enabled to understand what the right inputs for a given goal may be, how to measure those inputs objectively to the extent possible, and how to be part of a selfless team or be a selfless leader as the situation may demand. Finally, an organisation’s planned outcomes (targets, profits etc) too will have a role in such a system, particularly when it comes to designing input measures, but these planned outcomes will serve more as a conscience keeping benchmark, rather than a report card on the value of an organisation or a person.

The writer is a corporate strategy professional.

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