Performance Management is one of the most crucial and dreaded aspects of both employees and HR. A rigorous one-month saga that stresses every level within the organization, almost like a beast showing its ugly head each year.
The last decade, however, has been a promising one, with more companies shunning the rating and ranking system, the heavy administrative process and questioning the effectiveness of performance appraisals. There have been healthy discussions around productive feedback, continuous learning and ways to steer the conversation towards something more meaningful.
As organizations look to be more progressive and adopt this new-age thinking, what are some tenets that can successfully help organizations make this transition?
Quarterly goal discussions instead of Annual Reviews: With industries being fast-paced, and changes more dynamic, goals need to follow a similar theme, that of fluidity and flexibility. In addition to creating SMART (Specific, Measurable, Acceptable, Realistic and Time-bound) goals, goals should be discussed at regular intervals so that there is continuous tracking of progress, ability to discuss challenges, and a process to minimize surprises for both employees and managers.
For example, instead of the traditional annual goals, managers should have quarterly discussions with employees to understand the relevance of their goals to the changing business context, while making changes as needed. This helps employees create effective goals and produce better results.
Shift from performance management to performance coaching: Technology has not only changed the way we work but also transformed the skills required for different roles. With employees learning to adapt, it is vital that companies offer support to employees to learn and grow in their current roles, thereby shifting the conversation to ‘What are the skills needed to succeed in one’s current role? How is this requirement changing with the changing industry goals? What is the potential of the growing role?’
An employee with three years of experience may have entered the company with one specialist skill for example, SQL, but in a few years may have developed a multitude of skills given the digital boom, thereby gaining expertise in platforms like, MicroStrategy or PeopleSoft. Thus, it is smarter for employers to invest in learning rather than recruiting for the ‘dream’ candidate.
Continuous feedback and engagement: The workforce today is talented, ambitious, demanding and believes in continuous improvement. They are open to constructive feedback, interested in healthy debates and believe in two-way dialogue. At the same time, they also like to be heard. Employees of today appreciate qualitative discussions and want to discuss aspects such as career progression, role and employee expectations, goal-based trainings, and career aspirations.
A coaching-focused relationship with the manager leads to high engagement among employees. Internal communication, regular pulse surveys, flexible processes, open-door policy and continuous learning programs are all important tools like never before.
Enabling people managers: Technology is now enabling us to analyze data in different ways whether it is related to business or people. HRMS tools have advanced analytics at the manager’s fingertips to assess team data, manage succession planning, and identify top performers. Performance frameworks within these HRMS tools can create a huge impact in enabling managers to make effective people decisions, without depending on HR, thereby shift HR’s role from an administrative data collector to a strategic business partner.
For example, as a talent partner, I helped a company recreate their performance management process so that it is continuous, collaborative and objective by leveraging Workday, our HRMS tool. At the front end, managers could manage the 9-box grid in Workday to continuously evaluate individual performance. At the back-end, the information was being pulled through different Employee modules based on demographic data, goal completion status, and quarterly career discussion inputs. This helped in two ways: One, tracking historic performance of each employee and two, enabling healthy discussions between managers and employees.
Shift from generalizations to individuality: ‘One size does not fit all’ is the new mantra. Companies are moving away from practices like the Bell-Curve and 5-Point Grading and instead are focusing on different performance parameters that apply to different roles. Having one performance measurement system for all employees is flawed, with managers being forced to make assumptions, HR struggling to get all those weighted averages straight and employees being left clueless.
Rather than having a set process, it is more beneficial for HR to provide a performance framework with general guidelines. Performance discussions need to be more fluid, have a deeper understanding of each role and recognize the different yardsticks for diverse roles within the organization.
Focus on people, not processes: One of the biggest challenges with the traditional performance management system was the focus on process and administration. With tight deadlines, managers and employees often focused on ticking the box rather than making the process efficient. Technology can now support qualitative discussions with employees by recording take-aways from each conversation, documenting next steps, keeping a check on trainings, and continuously assessing the effectiveness of individual goals. Having this in place allows one to focus on growth discussions and allows employees to focus on the ‘How’ rather than the ‘What.’
Train people managers: HR often underestimates the need to train people managers on new practices. Given that this is new for everyone, one needs to enable people managers to have productive discussions, while giving and receiving feedback. One must understand that in the beginning, these processes can be uncomfortable for both the employee and manager, but with training and support these will translate to more effective discussions.
In essence, the new age performance management system needs to infuse elements of simplicity, trust, a growth mindset and focus on individual employees. It needs to reflect the current times of change, flexibility, continuous improvement and two-way communication.