Performance management - new realities

Performance management is coming under increasingly critical scrutiny.  Some well-known organisations are alleged, by the business press, to have abandoned the practice entirely. 

In reality, what we are seeing is increasing sophistication around the way performance-related behaviour really works. So, what are the reliable lessons we can apply now to make performance management more effective?

Emphasise feedback

At the heart of today’s thinking is employees’ (not just millennials) increasing desire for feedback, coaching and development – to build the capability they need in today’s job and to advance mobile careers.  This means shifting away from compliance and the ‘naughty step’ as levers on performance and towards conversations about potential and learning. And there’s a demand for more immediacy.

Get the timing right

Feedback must follow fast on the footsteps of performance events and trends, while recollection is fresh and there’s maximum impact from lessons learned.  Regular check-ins between manager and employee need to be more frequent and should relate to the rhythm of the individual’s work rather than to a forced annual cycle.  And there’s merit in focusing on near-term priorities as well as longer-term goals; real-time feedback initiates real-time action.

Break down bureaucracy

The trend is towards better use of data to adjust objectives in response to change, to track performance ‘on the fly’, and to cut down the form-filling that discourages managers from spending their time seeking insights into individual performance.  Companies are either clarifying or, at the limit, breaking the linkages to some other HR systems, such as pay, where they inhibit development-focused conversations.  And they are abandoning hard-to-justify policies like forced ranking and up-or-out that undermine engagement and encourage gaming behaviour rather than authentic change.

Enable the participants

The key is adult-to-adult conversations between managers and their people, more openness about mutual expectations and outcomes, and better training of all participants in the performance system.  Deloitte, for example, focuses on what a manager would do with an individual rather than how they rate them.  And abandoning the bell curve starts to build trust in the system by addressing employees’ concerns about fairness and shifts the focus away from the pecking order towards conversations about potential.

Overall, performance management has not gone away; it is simply in transition.

At Kiddy & Partners we believe that a business must ensure that every employee makes the right contribution. But we also see that a new and more thoughtful understanding of the psychology around performance is yielding better ways to manage it.  We bring both the business and behavioural perspectives to bear when helping our clients to improve their performance systems and their managers’ ability to use them well.