Narasimhan A R
It was almost the fag end of the week, Saturday evening just before closing hours; HR manager came up with the task “Promotion for the year”. It is usual that at the end of each year employees are assessed on their performance. After having done performance, one of the difficulties on both HR and the supervisor part is to choose employees for promotion. The question here is “Why is it so difficult to decide promotion?”
Let us assume that an individual is promoted to the next level based on his performance. This evidences that an employee has met the standard. The issue is not stopped here. What is the guarantee that the promoted employee will perform well in his new job. That is the moot point to test in the given situation.
The Peter Principle “Promotions and declining productivity” suggests that the individuals performance will become worse after being promoted. This originates from the hypothesis that each individual can be identified in to three categories:
i. an individual performing worse,
ii. an individual performing bad, and
iii. an individual performing good.
An employee who fits in the first category will definitely be terminated soon; second one will often be under tremendous pressure to perform good thus striving hard to third category. Ironically, the probability of sustaining good performer for a longer period is less. Other things remains equal, this implies that those who do not get a promotion should do better after being turned down than they did before. Also it suggests that an individual who is good at one job may not always be good at another job.
Suppose a company decides to study the effect of giving promotions thus takes longer period to make such decisions then the impact would be one, on positive side the longer the Company waits to make a promotion decision, the better the information but on negative side wrong job will be with one individual for a longer time. This may end up maximum attrition. Then how to offset both extremes?
Promote individual at random. Statistics and history shows that giving promotions using computer model on random basis works most efficiently. This is based on the theory called Parrondo's Paradox. It is a game theory wherein each having higher probability of losing than winning. How it is proved this is the best model? Though it may ruining employee morale, (ie., performer may not be rewarded) when employees know promotions are at random, individuals like creativity most and work better.
Let us assume that an individual is promoted to the next level based on his performance. This evidences that an employee has met the standard. The issue is not stopped here. What is the guarantee that the promoted employee will perform well in his new job. That is the moot point to test in the given situation.
The Peter Principle “Promotions and declining productivity” suggests that the individuals performance will become worse after being promoted. This originates from the hypothesis that each individual can be identified in to three categories:
i. an individual performing worse,
ii. an individual performing bad, and
iii. an individual performing good.
An employee who fits in the first category will definitely be terminated soon; second one will often be under tremendous pressure to perform good thus striving hard to third category. Ironically, the probability of sustaining good performer for a longer period is less. Other things remains equal, this implies that those who do not get a promotion should do better after being turned down than they did before. Also it suggests that an individual who is good at one job may not always be good at another job.
Suppose a company decides to study the effect of giving promotions thus takes longer period to make such decisions then the impact would be one, on positive side the longer the Company waits to make a promotion decision, the better the information but on negative side wrong job will be with one individual for a longer time. This may end up maximum attrition. Then how to offset both extremes?
Promote individual at random. Statistics and history shows that giving promotions using computer model on random basis works most efficiently. This is based on the theory called Parrondo's Paradox. It is a game theory wherein each having higher probability of losing than winning. How it is proved this is the best model? Though it may ruining employee morale, (ie., performer may not be rewarded) when employees know promotions are at random, individuals like creativity most and work better.
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