No one seems to love performance management. Generally, the term conjures up images of a manager and employee in an intense conversation — no smiles, just deep concentration. Not a lot of joy in those pictures.
All that said, I believe in performance management. In fact, if organizations want to ensure employees are aligned with the company goals, performance management is critical.
The intent of performance management is pretty simple: to ensure the workforce is aligned and executing the organization’s priorities successfully. When done well, the process guides employees on what’s important, how to be a part of the bigger picture, and sets goals that define how employees can contribute.
For many of us, performance management equates to the dreaded annual review — a 60-minute download of feedback about how the employee performed and what they could have done differently. The employee leaves the meeting with a list of “development actions” to improve.
In some instances, the employee is presented with a “performance improvement plan” with specific actions to implement before the dire consequences kick in. Not the easiest meeting and certainly not something to look forward to.
I’m a fan of performance management for not only the benefits mentioned earlier, but also because when managers use constructive feedback and coaching in a safe trusting environment, everyone wins: the organization, the manager, and the employee.
A growth mindset is key. When the performance management process is in sync with the employee’s motivations, employee satisfaction and performance soar. The process can instill a sense of eagerness and excitement about the work ahead.
Let’s look at how to transform your performance management process to emphasize growth.
In contrast with the annual or even bi-annual feedback “download,” imagine a series of check-ins and feedback loops throughout the cycle:
The first step, goal setting, establishes the target for the employee — where the link to the overall organizational goals is described.
When guided by the manager with a growth mindset, goal setting is not just a list of “to-dos” to be signed off by the employee. It’s a mutual dialogue that illustrates the contribution to the organizational goals and sets expectations while identifying the employee’s aspirations and development goals.
In each subsequent meeting to track progress, the manager engages the employee in candid conversations about what’s working, what could be going better, and brainstorming solutions to any issues that have surfaced. The conversations provide the manager with important information about progress, and the employee gains valuable coaching.
This approach is highly compatible with Agile and similar project methodologies. A by-product of this cycle of progress tracking, feedback, and coaching not only instills trust but also builds employee confidence and motivation.
When growth has been the mindset throughout the year, the formal review brings no surprises. The ongoing check-in and feedback loops ensure that both the manager and employee are continually aware of progress and changes to goals that may occur throughout the cycle.
The dreaded annual review is transformed from a recap of accomplishments to a two-way conversation about what worked and how to increase success in the future, all done in a trusting and psychologically safe environment.
While performance management with a growth orientation brings many benefits, organizations may find several obstacles to implementing the process in this way.
The primary issue we hear is time. The number of managers’ direct reports (i.e., span of control) can be so high that there’s not enough time to provide frequent check-ins, feedback, or coaching meetings. However, we’ve found that managers who practice solid coaching skills reap more than great business results — they have more highly engaged employees.
There’s also a common perception that collaborative goal setting relinquishes manager control. In our work, we find that the command-and-control method of goal setting generally yields compliance, not employee engagement. Managers who impose goals without dialogue, active listening, and employee engagement can face execution issues down the line.
Organizations can solve these primary obstacles through problem-solving techniques that identify the root causes of the perceived barriers. After Action Reviews, famous for their success in the military, are great ways to address core issues that can arise from an ineffective performance management process.
How do we start moving our clunky performance management process to growth? First, don’t overthink it. Remember that the process should be designed to serve you, not the other way around.
Too many managers see performance management as an administrative HR task. While it can feel that way at times, a growing number of organizations see that performance management can be a strategic tool that amplifies business and employee performance and boosts morale.
Start with the easy things within your control. In your conversations with employees about their goals, make sure you land on goals that are Specific, Measurable, Achievable, Relevant, and Time-bound (SMART). This kind of clarity will avoid ambiguity of “what good performance looks like” for your employees.
Schedule check-in conversations proactively before calendars fill and keep them. Refer to the SMART goals for tracking. If priorities or the situation have changed, adjust the goals accordingly.
Also, if you have an online performance management software system, leverage the tools. For example, most HR online tools are already designed with data entry fields to define goals. They are easy to reference and update along the way.
If you find you need data for your feedback, you don’t have to go it alone. Invite colleagues to provide input on how employees are performing. Better yet, encourage employees to solicit teammates and stakeholders for feedback. The less formal the better: contemporary 360° feedback tools used ad hoc can be a great way to instill a culture of team coaching and candor.
Finally, ensure your performance management is aligned with the natural cadence of your business. When I was the head of HR of a global consulting company, we transformed the traditional performance management process into a simpler growth-oriented approach.
Our business cycle didn’t follow a traditional January-to-December timeline. Since projects ran based on the client’s needs, we aligned the performance management process to sync up with client initiatives and natural feedback rhythm. We replaced the perfunctory year-end review with strategic talent development discussions and to discuss growth for the future.
Over time, transforming your performance management process to closely align with your organization’s growth plans will feel more productive.
Already, we are seeing signs that organizations are ready to transform their performance management processes. The changing nature of work, the demographic shifts in the workforce, and the post-pandemic impacts are increasingly challenging traditional performance management thinking.
The techniques mentioned are already being implemented in many organizations. These include collaborative goal setting, continuous feedback loops (Agile), and embedded coaching throughout the cycle.
We’re also seeing a tightening between the performance management process and analytics that automate the delivery of employee performance data, including business metrics with performance management.
Integrated 360-feedback online tools can be initiated seamlessly into the performance management process. Tools such as these enable managers to spend valuable time engaging in coaching, feedback, and problem-solving and less on the gathering of disparate data.
The most intriguing trend is the use of artificial intelligence (AI) tools to identify performance improvements across the enterprise that allow managers to proactively identify inefficiencies and barriers to employee performance.
Performance management needs to evolve to address the ever-changing world of work such as 4-day work weeks, employee wellness actions, and inclusive environments. Harvard Business Review cites the need for upskilling manager skills to effectively manage these trends.
Performance management remains vitally important to organizations.
Business planning needs a tactical way to ensure the work done at every level closely aligns with the strategy and priorities of the organization and its employees. Yet, as the world of work rapidly evolves, leaders must assess their current performance management processes to determine whether it’s serving them well. Ask:
How should you start? Ask your employees and managers how they feel about “performance management.” Do they smile or grimace? Then, ask them why. They will tell you everything you need to know.
If your current performance management system is no longer working for your organization, download our free white paper "Is It Time to Blow Up Performance Management", and take the first step toward positive change.