With more than 25 years experience as an international HR executive in Fortune 500 companies (Pepsi, Starbucks, Nielsen), Luk is recognized as a top European Predictive HR Analytics expert. He is revered as a leading thinker and influencer, and is a well-known blogger, speaker, columnist and author of many articles. Luk teaches HR Analytics at the Universities of Nyenrode (NL), Leuven (BE) and Antwerp (BE). He is the Co-Founder and CEO of iNostix (www.inostix.com) - predictive workforce analytics company.

While I was writing this column on a sunny day this spring, HR business partners were probably chasing their line managers as usual to make sure they’d deliver their annual performance appraisal forms on time. It being March and April, accounts closing and bonus pay-out time in most companies, you know. These were terrible times for me in the past, and they have been so for many years in my previous CHRO role. HR considers this annual appraisal fad the absolute crown jewel, one of the most critical organisation processes. Alas, in reality it has nothing to do with real performance management at all! And I struggled with it big time.

Another year safely filed away

We should all just admit it: when the appraisal process is safely in the past again, the whole thing is filed away for another year, to the great relief of everyone – including HR. I’ll be blunt: this worthless process totally undermines HR’s credibility! The management intellectually ignores HR’s penchant for form hunting and has thus exposed one of its deeply rooted tender spots: its total lack of well-conceived ‘real’ performance management directed at pivotal roles (to quote professor Boudreau), at those who really make a difference for the organisation, and at critical business processes.

No correlation to real performance

While HR considers the process successful when the hunt has yielded a 90% trophy rate (read: neatly completed forms), everyone knows it adds no value at all. Though HR might have a warm heart for the people behind the organisation, it remains a gigantic defeat for the function as a whole. I call it the ‘moral hazard’: we tolerate this entirely useless appraisal process, because HR has sold documenting performance as being indispensable. ‘But we use state-of-the-art technology for this,’ an offended HR manager recently retorted. Indeed, in the past few years HR has devoted a lot of attention to simplifying the process and making it more user-friendly. However, the whole thing stays collecting would-be performance data that doesn’t correlate to an organisation’s real performance.

Fantastic privilege and job

Am I a prophet of doom? Even after more than 25 years in HR, I still consider my job the greatest in the world. It’s a fantastic privilege to be able to (help) direct the most important part of an organisation. But it’s also a critical and important profession. A job where esteemed social inspiration covers up the grim reality, namely that HR is not the real developer of an organisation’s performance and that it’s got lots of (administratively oriented) data, but can’t deduce any useful information from it.

Levers for success in critical roles

The alternative? Focusing on maximum 10% pivotal (read: critical) roles that make a difference in the organisation, analysing those for their real levers for success (including scientific research on this) and correlating this with results: marketeer market shares and volumes, call agents’ customer satisfaction, software developers’ code quality, front line customer satisfaction, etc. Couple all this with these pivotal people’s specific characteristics and learn from what they have in common for future recruitment, introduction, training, coaching, etc. Wouldn’t it be fantastic if HR business partners’ business card were to say, ‘Jenny, overbooked business performance coach’?! At the moment it just says, ‘Peter, socially inspired orphan of the organisation’.