Article: Performance management overhauls: Go beyond lip service and short-term thinking

Performance Management

Performance management overhauls: Go beyond lip service and short-term thinking

Everyone's talking about 'outcome-based assessments' now, but this is hardly a new idea and its implementation has typically been hit and miss. How can organizations go beyond just paying lip service to the idea of outcome-based performance management, and actually make it a reality?
Performance management overhauls: Go beyond lip service and short-term thinking

As COVID-19 drove populations into lockdowns and remote work settings last year, HR and business leaders across the world began to realize that traditional methods of managing and evaluating performance needed to change. Once again, terms such as ‘outcome-based assessments’ were mentioned more frequently in HR discourse.

However, let’s remember that experts had been recommending such performance management overhauls years before the pandemic. While it was easy to ignore such advice prior to COVID-19, today, it would be unwise to do so. HR practitioners should also refrain from seeing the current state of affairs as an ephemeral anomaly.

As more and more companies consider continuing remote work arrangements beyond the pandemic, workplaces need to be prepared to not just effect performance management overhauls today, but conduct continual reviews depending on further changes to work conditions as we move forward. After all, the possibility of another pandemic is not inconceivable.

More importantly, we need to recognize that with or without a pandemic, many of the changes that organizations have implemented in the past year could actually be more effective in terms of boosting performance and results, whether or not we continue working remotely.

Our conversations with clients across industries reveal that HR practitioners are indeed beginning to take this issue seriously.

Here are some performance management improvements that we think should become permanent:

 1. Beyond outcome-based goals: Set agile goals

More and more of clients have been asking that we only shortlist adaptable and agile job seekers for key positions. In a VUCA (volatile, uncertain, complex and ambiguous) business environment, these qualities are essential.

However, we can’t expect a large number of such individuals to surface if, to begin with, performance management systems don’t encourage and support adaptability and agility.

For one thing, goal-setting which is a key component of performance management, generally takes place once a year. Most people set them and forget them. In addition, if the operating environment takes a drastic turn, people are caught unawares and struggle to find their feet. They often spend too much time bemoaning the impossibility of accomplishing goals that were set before a crisis.

Since COVID-19 has resulted in many people rising above this and pivoting to create new opportunities, it would make sense to enshrine this mindset and attitude within performance management systems in order to encourage, support and reward agility.

First of all, goals need to be clearly and transparently linked to business priorities. This will make it easier for employees to understand why and how goals might need to be adjusted based on prevailing business conditions.

This understanding also ensures that employees anticipate and expect change, helping them develop an agile mindset.

While managers should have the flexibility to adjust goals, they must also show employees how such a system actually benefits them directly insofar as it ensures they remain relevant and perform well. It is also crucial for employees to be aligned with new goals at every stage. Changing goals without warning or alignment is likely to be counterintuitive.

2. More frequent performance appraisals in the form of feedback sessions

Remote work means both employers and employees are likely to feel more anxious due to a lack of visibility and concerns over job security during a crisis. Managers are reported have increased check-ins with their teams since COVID-19, but perhaps what’s more important is the quality of these check-ins.

Asking after their health and work progress is vital, but leaders need to go a step further by having meaningful and more frequent feedback sessions. In fact, agile goals necessitate such sessions.

These conversations should delve into the company’s strategic business plans, identify opportunities and prepare employees for potential pivots. There must also be two-way communication about the actions employees can take to propel organizational goals. To ensure a sense of ownership, employees should have a say in how they can contribute.

Provide personalized feedback on the quality of their contributions and suggest what they can do to increase their performance. Even in the midst of a crisis, people must be reassured that their individual long-term growth and success are important. Knowing that managers care enough to provide personalised feedback on how they are doing would help them do better.

3. Skills development partnerships and career conversations

In order to boost performance, employees’ skills development and growth are crucial. Therefore, skills coaching and support must be seen as an integral part of performance management.

Even before the economic fallout from COVID-19 accentuated skills shortages in certain sectors, studies had shown that the issue was highly visible to business leaders. In fact, according to PwC’s 2019 Talent Trends Report: Upskilling for a Digital World, 79 percent of global CEOs said they were ‘extremely’ or ‘somewhat’ concerned about the lack of essential skills among their employees.

Today, more than ever before, employees are being urged to upskill and reskill. However, employers must invest more time and effort in helping them through this process as many individuals struggle when it comes to deciding which skills to pick up or improve upon.

To take the guesswork out of the process by creating a close partnership with each employee to map upskilling/reskilling plans that are aligned with business goals.

This should then lead to discussing the individual’s own aptitude and interests, and how these could become part of their talent development journey in a way that also benefits the organization. As employees discuss their own professional goals and desired career trajectory, they become more self-aware and should be able to suggest ways to meet their career objectives with the company’s support.

The plan could involve not only training courses, but also stretch assignments in a different department.

By having such conversations with their direct reports, managers show employees that the organization takes their development and growth seriously.

Numerous studies have shown that employees who are given opportunities for career advancement, whether through learning new skills or taking on new responsibilities, are more likely to be engaged at work.

Ultimately, this will also ensure that skills gaps emerge less frequently and if, or when they emerge, are closed swiftly.

 4. Rewards and incentives: A flexible approach

Even during an economic crisis, it is unwise to deflect conversations about rewards and incentives. According to Gallup, having conversations about their progress and salaries enables people to be more engaged and feel better about their salaries, even if they don’t end up getting an increment.

It is understandable that economic conditions have made dishing out financial incentives challenging. Nevertheless, it is important to recognize and motivate those who are making vital contributions to the organization amid a crisis.

In the absence of salary increases and bonuses, consider programs that could be just as, if not more meaningful.

Recognizing that crisis conditions have resulted in extraordinary stress, some companies have introduced subsidized health and wellness programmes for all employees. Companies can reward top performers with greater subsidies, or extend the subsidies to their family members too.

Others are offering unpaid leave to employees who want to take time off. However, they do so with a written understanding that while the employee forgoes a salary for that period, he or she continues to be employed and is entitled to benefits.

Recently, leave sharing programmes are being more widely considered. Traditionally, these allow employees to donate their unused leave to colleagues affected by medical emergencies or major disasters.

However, a programme that allows those with unused leave to “bank” their time off could be translated into a rewards programme. Those who’ve done well can be given the option of taking a few additional days out of the bank.

Financial incentives certainly aren’t the only way to recognize top performers.

All of these initiatives certainly can be applied beyond the current crisis to have a transformative long-term impact. Agility, adaptability, dynamism and a genuine interest and dedicated investment in employee development and growth can only be good for business.

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Topics: Performance Management, #RethinkPerformance, #RethinkPerformanceandRewards

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