In March 2020, Facebook promulgated that it would give all its 45,000 employees a rating of ‘’exceeds expectations’’ in the performance review rating for the first two quarters. Some companies even canceled their review cycle of 2020 and many are struggling to make performance management goals fair and meaningful in this chaotic environment. With the impact of COVID-19, performance management has come a long way from the disputed argument around the bell curve to continuous performance management and now to an agile performance management system– making performance metrics fair and meaningful in a topsy-turvy, ever-changing, and uncertain-future environment.
In an interview with People Matters, Ashley Goodall, SVP, Methods & Intelligence, Cisco shared, “The point of performance management, of course, is not to categorize performance as much as it is to enhance and increase it over time.”
As organizations, we need to relook at our performance management systems and know the reason for measuring performance. Is it a transactional activity of categorization of workers into different buckets of performances and nonperformers and decide whom to promote and whom to let go of? Or is the aspiration broader than measuring activity to measuring results, enhancing performance than rewarding performance?
The new approach to performance management will have to redefine the way they measure performance. Here are some key shifts you should consider:
A shift from annual goals to agile goals
The current disruption and future uncertainty of our business landscape require an agile approach to goal setting. Goals need to be immediately adjusted to focus an aligned effort on business needs and how employees can best deliver value to the organization.
This requires an "agile mindset" that encourages employees to own their goals and expect change. Even anticipate it. Employees and managers should be on the lookout for opportunities to pivot with changes to business needs and be rewarded for identifying new ways to make a positive impact. Managers should be given the expectation, authority, and flexibility to tailor goal setting to the team and the individual as their work changes.
Target the right behaviors and competencies
In an interaction with People Matters, Amit Malik, Chief People, Operations & Customer Services Officer, Aviva Life Insurance, affirms the same and states, “Performance metrics will be more tightly linked with the outcome (as opposed to effort) as remote working becomes a norm in the post-COVID-19 world. Leaders and employees have to be flexible and adopt continuous recalibration of goals and measures. For leaders, metrics will now need to necessarily track softer aspects such as the ability to respond to crises, empathy, and compassion for peers and subordinates & courage to deal with and implement rapid change in addition to business results and decision making. Another important element in performance discussion will be the addition of managing risk.”
Food for thought: Identifying the right set of competencies is clearly the critical first step, but the next critical step is to describe them in a way that raises the performance bar. People actually want to perform at higher and higher levels, but the next level of performance is often not well-defined.
Measure for upskilling: In a recent Aon Salary Increase Trends Survey 2020-21, one of the major shifts predicted was skill-based pay. Skill-based pay refers to a pay system in which pay increases are linked to the number or depth of skills an employee acquires and applies, and it is a means of developing broader and deeper skills among the workforce.
This not only reinforces the outcome of your performance management– enhancing the performance but makes employees accountable for their own learning and growth. Measure how much your employees are engaged in training programs, track the number of activities they are indulged in to upskill themselves - reading books, attending online workshops, webcasts, or participating in competitions and events that directly influence their skills. Recognize employees’ flexibility and willingness to develop new skills and adapt to a different role and how they have contributed to overall service performance outcomes.
Ashley shared, “The best way to measure what a team leader thinks of somebody on their team is not to have them attach a rating to that person, but to describe how they would invest in them.”
Employee needs can't be adequately met in today's business environment using traditional performance management systems. Static performance reviews, annual goals, and infrequent feedback never really cut it before the crisis, but they certainly won't cut it now. It's time to make a change.