Previously, we wrote about the pressing need to solve the
performance management puzzle that
baffles so many of our organizations.
As we noted in that post, Deloitte’s
2013 Human Capital Trends report
addresses the issue in a section called, “The Performance Management Puzzle,”
which offers a number of insights into exactly what’s vexing most employers
(changing performance pressures, stagnating measurement and evaluation
processes, evolving but unproven technologies, and the quality of the training
and tools given to managers, to name just a few).
To “solve” performance management, we not only need to
address each piece of the puzzle but we also must come to terms with a new set
of realities. Progressive employers have already begun to accept these truths
but many more employers need to follow suit if they want to keep top talent
from slipping away.
Here are five of the most critical new realities that, once
embraced, will help us all solve the performance management puzzle:
1.
The
traditional performance management model has always been broken for many
employers. This is compellingly illustrated in the Deloitte report: “Many
companies continue to rely on traditional performance management processes ....
Year after year, managers follow a well-worn routine: Fill out goal forms,
track progress, fill out more forms, conduct a formal annual assessment, and
then fill out more forms.” Indeed, this is the approach some employers have
taken from the start but it was never what the traditional model of performance
management intended. Annual reviews were meant to be more substantive than the
rote formula of “fill out forms, track, assess, then repeat.” This formula is
no way to motivate and engage people. As the Deloitte report’s authors point
out, “Creating tight alignment between the work of the individual and the
organization’s objectives promotes greater context, commitment, and pride in
accomplishment.” This tight alignment and the intended outcomes have always
been part of the traditional performance management model. But they demand a
high level of interaction, communication and collaboration between managers and
their direct reports—higher than many are providing—no matter what “model” you
use.
2.
Annual
reviews aren’t enough. No matter what performance management model you use,
our businesses and our people move too quickly these days for annual reviews to
serve them well. Performance goals and targets (for both individuals and teams)
are now linked to shorter-term projects and other strategic deadlines as opposed
to the fiscal year. Therefore, our people need more immediate, frequent and
ongoing feedback. As a result, a growing number of employers are supplementing
their annual reviews with more frequent, informal meetings. Managers and direct
reports get together more often to discuss goals, track progress and strategize
on performance adjustments when necessary. Many still hold annual reviews but
these meetings are used primarily to address development and career pathing issues—and
to discuss compensation (annual pay raises, bonuses, etc.). Bottom line,
meeting only once a year to discuss performance is a dying practice.
3.
Technology
is compulsory. No matter what a company’s review process is,
technology-based solutions are a necessary component of a successful performance
management process—especially when you factor in the tight timeframes many
managers are dealing with and the widespread push to base reviews on metrics
and hard data. Dedicated performance management software and systems help to
keep the review process, managers and employees on track and working as
efficiently as possible.
4.
Companies
need to work from the bottom up to keep employees engaged. Companies should
have employees either help with or initiate the review processes and be an
active participant in establishing some of their performance goals and targets.
This goes a long way toward keeping people engaged in their work. If your
organization uses a top-down approach—placing accountability only on your
managers—employees have precious little incentive to take ownership of their
goals or become involved in their own development.
5.
We can’t
look at the box for a “completed picture” of the performance management puzzle.
There are no blueprints or reference materials because performance
management isn’t a cookie-cutter issue. Yes, we’re all shooting for the same
result—to fairly evaluate, compensate and motivate employee performance. But
the puzzle pieces that fit together and work effectively will be somewhat
unique to our organizations. Some will be served well by social tools, some
won’t (at least not yet). Some will find great value in “crowdsourced” reviews,
others will encounter problems. And so on, and so on, with each component. If
you’d like some guidance on your particular challenges and options, Reviewsnap
is just one of several highly respected performance management companies that
will be happy to discuss solutions that might suit your company’s needs.
At it’s core, performance management is about helping your
people deliver their best day in and day out. It’s about employee development. Organizations
that treat annual reviews as a mere formality are simply going to lose out—and
lose talent—to those that focus on improving engagement through the review
process.
We’d love to know what your experiences have been and the
lessons your organization has learned in addressing its performance management
challenges.
Share your stories
here on our blog or email us at info@reviewsnap.com and we’ll compile them for a future post or
report.
