Performance assessments as legacy systems have survived three industrial revolutions, but as we enter our fourth stage of digital revolution driven by knowledge workforce, it will become increasingly difficult to navigate through this stage without reinventing how we manage our workforce.
According to a survey conducted by San Francisco-based consulting firm, Achievers, only about 2 percent of HR leaders think performance management as we have known it has a meaningful impact on improving performance. It is not surprising to acknowledge that we have driven away good people by poor performance management practices.
So where did we go wrong on performance management? Even though SHRM reported in 2000 that change was in order if we needed to attract and retain talent. It took us over 15 years to initiate a new chapter on performance management led by the fearless actions of a few high profile companies.
Regardless of what the new avatar performance management takes in your organization, there are a few fundamental elements to consider that are influential in addressing performance management in any organization.
Culture of Performance Management
“Research by the Hay Group reported that the ‘Most Admired Companies’ had created performance management systems that take a well-rounded approach to measuring performance. Such measurements include teamwork, long-term thinking, building human capital, developing and managing talent, and customer loyalty”. (Insala, 2007).
Quite simply performance management is just another engagement tool where an organization achieves success by establishing a performance culture based on values specific to the business. Accountability for actions, transparency, customer service, innovation, employee development, commitment to goals, fiscal responsibility and many others constitute the core elements driving performance and business. Employees want to know and are paying close attention to how their careers are managed once they are hired. Are you doing things that show you are interested in your employees and are you committed to growing talent that drives business forward?
Seminal to any successful performance management system is a clear definition of what performance means and looks like for an organization. It’s not only important to establish that culture of performance but also spells out what that entails in terms of expectations, results and how that would be accounted for or measured. Once that is in place for employees to see, understand and experience it is not an arduous task to develop and motivate individuals who will contribute to the goals of the organization.
In an effective performance management system, you are not guiding the performance of individuals but also honing their skills and knowledge to perform effectively and support the organization’s strategy and plans. When you add the feedback and coaching element to performance, you are motivating individuals to perform productively.
Alignment and Leader driven
For performance management to make sense, it has to be aligned at two levels, corporate and individual. Alignment with business objectives, strategy and customer needs is at the core of any organization’s performance management program/system. The more challenging alignment comes from an individual’s ability to align themselves with their respective roles and the expectations that come with it.
This is personal yet potent in driving change, development and making a difference to the overall outcome. What we have consistently failed to accomplish is assimilating information from various components of performance management and applying it to bridge the gap between expectation, measurable goals and satisfaction. This is where leaders need to pay most attention and ensure they are present to guide, coach and train employees to see how they contribute in painting the big picture.
“It’s no surprise that companies with robust business performance are also companies with strong employee performance management programs”.(Insala, 2007) This finding was reported by the 2007 State of Performance Study, conducted by WorldatWork and Sibson Consulting, which surveyed more than 550 HR professionals.
The study found that “Performance management techniques for both the effective and less effective organizations are not very different. The greatest difference is the level of active leadership support and championing of the process.”
The study also revealed that “The organizations getting the most impact from performance management are those that have strong leadership support, and that execute well in differentiating performance and giving performance messages.”
Over the years, we have all come to agree that the most important objective of performance management is Talent Management, and this must be demonstrated by leadership. As Mark Thomson, President and CEO of New York Times remarked on leadership that it’s “creating a safe place for other people’s talent.” (THE FOCUS, Egon Zhender, 2015). Employees need to feel and experience the opportunity to apply their skills, develop their talent and do it in an environment that supports their willingness and desire to grow,
The performance management system must start with, be led by, and be committed to by senior management. Leaders are the biggest advocate for an effective performance management culture and when they practice what the organization is preaching, it reaffirms faith and respect for the system and fosters acceptance.
Educating Managers and Employees on Feedback
Managers, team leaders or whoever else is involved in assessing an individual’s performance are the real executors of a PM system. The success of any PM system depends on the ability of the leadership team to effectively administer it. Building that ability requires training managers in discerning performance levels, the art of feedback and developing interpersonal skills to connect (engage) with people. Feedback here include both recognition/appreciation and constructive assessment. Perhaps the hardest task in providing practical feedback is initiating the conversation.
On the same continuum, we have employees who aren’t exactly welcoming feedback. Being receptive to feedback about performance and reviewing their development isn’t something that is handled well by all employees.
”There is something that is much more scarce, something rarer than ability. It is the ability to recognize ability.” – Robert Half
So how do we overcome this fear of feedback and enable managers to differentiate between good and great performance. Quite simply HR needs to invest in training managers to developing listening skills, teach them to help employees receive and process feedback, and the most important one train them to be an effective coach. This approach works when this is an expectation that is driven from the top and requires practice, role-playing and support.
According to a recent research paper by Blessing White, a division of GP Strategies “Performance Management: Assess or Unleash” (June 2015), workers who receive coaching are also more likely to view their organization’s performance management process rated as fair. (73% compared to 46% of those who don’t receive coaching). They are more likely to say performance management increases their engagement levels (50% versus 21%), accurately measures individual performance (56% compared to 26%) and gives them insight into improving their performance (70% versus 32%).
To keep managers motivated in executing an effective PM we need to recognize and appreciate managers that do a good job of managing their team’s performance and when they act as coaches and mentors to develop talent. It is a huge responsibility to develop an employee and HR needs to encourage and support managers in this endeavor.
Candid not Candied Conversations
The one time of the year where employees avoid their manager like the plague is the annual review. The performance conversation does not conjure a pleasant image. If we were to toss aside the traditional approach of performance reviews and consider the current feedback based approach. there is still the element of the discussion that continues to be a source of discomfort. Performance conversations are not the occasion to practice your oratory skills or embellish words or put on your Oscar Wilde hat.
These are by no means easy yet have to be cultivated into feedback or conversations where you engage in a meaningful, honest and transparent discussion about an individual’s roles, responsibilities, performance, expectations and goals, in short talent management.So you owe it to yourself and the employee to be candid.
In performance management, feedback has to be a supportive two-way process where both parties are committed and accountable for their performances and how their actions make an impact on the organization. The approach going into these conversations has to be open minded, willing to listen and be heard and more importantly depends on your ability to connect with the employee. Feedback conversations are not a platform to get personal with offensive or disrespectful remarks. The spotlight is on performance and development.
Remember the success of the conversation or feedback is built over time and depends on your ability to establish trust and respect, which comes through an understanding of the employee’s work, realistic and objective observations of performance and recognition of achievements. This shouldn’t preclude you from having firm discussions to address poor performance and providing constructive feedback and resources to improve lagging performance because there is nothing more defeating that putting up with deficient performers.