Don’t let bells and whistles overshadow true performance management

The performance management systems are improving release after release. There are more automated functionalities, more options and special features. The purpose is to relieve the managers and HR from the administrative burden that the annual reviews place on them. The system alerts push managers to do what they are supposed to do: manage the performance of their employees. However, some of the fancy features may do just the opposite.

One of the popular features is goal cascading. It allows the company to display and sometimes delegate goals downstream the organizational hierarchy. Goal alignment is important for uniting the workforce behind the company priorities. There is a risk however that the managers might think that just pushing the button in the performance management system is enough to get everyone rallied around the team goals. The system should not replace company and team meetings where the management explains why the goals are important and how they relate to everyone’s individual goals. If the employees can participate in the goal setting process, it also increases their engagement. Cascading the goals in the system for administrative purposes after all the interaction has taken place is fine, as long as the system does not take over the discourse.

The idea of the performance management system pushing for more frequent reviews sounds like a great idea at first. Quarterly or monthly reviews could mean so much more feedback for employees compared to what they used to receive before. There is nothing wrong with having a monthly or quarterly review to step back and make sure the priorities and the development plan are still on the right track. However, if the company wants to drive high performance, it should not send the message that monthly or quarterly review is enough feedback. Informal feedback needs to be timely, based on observed performance, not driven by system alerts. Letting managers settle for less creates a culture that looks at feedback as evaluative instead of developmental. The way to increase the quality and amount of feedback is not through system alerts but through clear expectations and training managers.

The improved systems also provide a more user friendly and more granular way to rate and evaluate employee performance. You can find color coding, sliding scales and many ways to compare employees. Although the scales may help the managers in the decision making regarding the ratings, the system does not change the fact that the manager still is the one responsible for the developmental discussion with the employee. No matter how granular the rating is, the most useful information is what the manager sees as the employee’s strengths and the areas for development. A forward looking dialogue focusing on a few concrete actions is more powerful than anything you can see in the most advanced performance management system.

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Do we need performance reviews?

If you believe research, we don’t need performance reviews to improve performance. Reviews seem to have no impact on individual performance. But hold off, before you jump and hit the delete button, read a bit further. Performance reviews serve another purpose. When they are done well, they improve retention. Performance reviews are a great opportunity to rerecruit your good performers and spend some quality time together talking about their future aspirations. So don’t stop doing reviews, just do them differently.

Performance reviews usually cause apprehension in employees and create hectic scurrying around for managers. For evaluation purposes, the review should be just a summary of the feedback the employee has already heard throughout the year. It should never include any surprises. It’s a good chance to look back and recognize the best accomplishments. It pays to focus on the positive. In a study on performance management approach, a strengths-based approach to management resulted in a 36% increase in performance, as contrasted with a 27% decrease associated with a weakness focus.

But hey, what do you do with low performers? You certainly shouldn’t wait until the review time to address their performance issues. If you use annual reviews to force your managers to deal with low performance once a year, you have a bigger problem than mind-numbing performance reviews.

As many companies use performance rating system that feeds into many other processes, such as rewards planning and succession planning, the performance review is a natural opportunity to be transparent about the implications of the performance rating and the employee’s standing in the talent pool. The manager’s job is easier if the rating process and its link to the other processes are objective and logical. Contact Forte Consulting if you need help with this.

The performance review should be forward looking. As you discuss the goals and results of the past year, probe for what the employee learned and wished they had known. When you give behavioral feedback, turn it into concrete development goals.

Many companies combine the performance review and the goal setting dialogue, as they easily flow together. As you plan next year’s goals together, look at them from a development perspective as well. What will your employee learn from each goal? Could there be an assignment that would be especially beneficial on their career path? What skill development and coaching will the employee need to be truly successful in accomplishing the goals?

Don’t miss the opportunity to ask questions about what keeps your employee engaged in your company. Ask about what makes them stay. Ask about obstacles. Talk about their long term career aspirations. Performance reviews just might turn into valuable dialogues that provide insight to both you and your employee.

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Copyright 2010 Liisa Pursiheimo-Marcks, all rights reserved. SVPGMGDX8TEC

Raise your hand if you hate performance management

Performance management has got such a bad rep among both employees and managers. For employees, the performance review is the annual dooms day, and for managers, it is a month filled with endless bureaucracy. The sad thing is that performance reviews don’t really drive performance. They are necessary for other talent management processes, and should be done well, but any manager who thinks that the annual review is enough to check the box for performance management completed for the year is WRONG.

According to CLC (Corporate Leadership Council) research, the top three performance drivers are risk taking, informal feedback and clear performance standards. Managers who cut some slack for their team members to try out new things will find process improvements and increased productivity. If some of the new ideas don’t work out, they don’t slam the explorers. You need lots of new ideas to find one good idea. At the same time, these managers don’t allow risky and unsafe behaviors.

When it comes to performance management, the most effective way to drive performance is to be clear about expectations and give frequent feedback. No complex computer systems needed! The key is a skilled manager. Employees must know what the expectations are in the form of job descriptions, company behavior standards, and specific goals to accomplish what is important for the company. When the expectations are clear to everyone, employees are more likely to feel that they are treated fairly.

Once the manager has set clear expectations, it is equally important to let the employees know how they are doing against the standards. Most everyone comes to work to do their best. If they are doing their job right, or great, it doesn’t take a lot of effort to let them know that. If they are off track, the manager needs to alert them to the deviation. The earlier the correction is made, the easier it will be. The worst annual reviews take place when the employee hears from the manager that they have not met the expectations but didn’t know about it. Feedback is so simple and it is just about the most powerful weapon to boost your team’s performance.

So why do we even have annual reviews if they don’t really drive performance? CLC research reveals that annual reviews drive retention. It is a chance to discuss career development and how much the employee is appreciated. Annual reviews trigger a chain of events in a company that values its talent. The performance ratings from annual reviews are used to differentiate rewards and development. When the reviews are more forward looking, they become less dreaded and more valuable. Let’s not forget that bulk of performance management happens every day.

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Copyright 2010 Liisa Pursiheimo-Marcks, all rights reserved.
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