DIANA MAHABIR-WYATT

We are entering a post-Drucker age, where laws, judgements and precedents are ignored and mass rule dominates. Or tries to.

Logic and reason never leave, though. They just wait, receding like an outgoing wave while the new one comes in. Well, civilisation has been there before over and over and over. Started there, in fact. Scientifically it is called “chaos.”

Business is not immune. Like the new Olympian sport, it will learn to ride the waves. In order to survive, it always has.

How does a business really determine the value of one employee relative to another in an organisation? Obviously, some type of performance appraisal system must be used. Has been, since Roman times. Hence the hierarchical management structure in most organisations. It is simple, entrepreneurially suited and familiar to people from education and religious experiences from childhood.

Once Drucker's process emerged, the systems became more formal and structured. Hence variants of his management by objectives (MBO) have become the core of every performance management system since, from manufacturing organisations where a large segment of permanent employees have similar functions, to the short-term, project-oriented or “gigs”-type employment contracts that became prominent in the last two decades, because of their flexibility and adaptability to market changes.

In the uncertainty facing business and financial organisations in today’s rapidly more technological and highly competitive world, the need for productivity going forward, faced with new Brexit regulations, transport and shipping costs, forex tightening, new taxes and tariffs and pandemic regulations imposed by increasingly financially-panicked governments, a conflict between the traditionally rigid control, profit-focused structures and those swinging with the newer generation featuring individualism, flexibility, results and problem-solving on-the-spot empowerment have made traditional systems of performance management difficult for many employers to maintain.

An interesting study by the international firm Anderson Consulting has recorded a shift from the MBO-balanced scorecard architecture dominating in those organisations where supervisors, and often managers, find the MBO methodologies difficult to implement. This is, partly, it appears out of a difficulty in setting clear and understandable objectives aligned to the overall strat plan.

[caption id="attachment_912018" align="alignnone" width="1024"] A graphic representing Drucker's management by objectives principle. Image taken from businessstudynotes.com -[/caption]

So some organisations look to the re-emergence of the familiar forced ranking system, often on top of the MBO structure, which, by its simplicity and ease of understanding, is used to make the process more relevant to everyone who uses it.

According to the Anderson report, it is a system best suited to organisations that require flexibility and require individuals to ta