the same old thinking and disappointing results, closed loop or negative feedback mindset concept  -

From performance management process to performance mindset

From performance management process to performance mindset; is this just the latest piece of corporate guff, or could there be something in it?

Done well, it could be argued that a performance management (PM) process builds manager capability. Managers are often trained in delivering each phase of the process, from effective objective setting to providing feedback at the end of year review, potentially resulting in stronger employee and organisational performance. In addition, organisations can track the phases of the process a manager and employee have completed, thereby (hopefully!) satisfying themselves that the process has been widely adhered too.

However, countless surveys and studies have found damning evidence that traditional processes lack effectiveness, particularly in today’s dynamic world of work. For example the Corporate Executive Board found that 95% of managers surveyed were dissatisfied with their performance management process.

Criticism often levied at the PM process is that while HR can see a process has been followed, there is no accounting for the quality or usefulness of having implemented it. Many feel the process is rigid, cumbersome and immensely time consuming. Managers often say that they lose sight of the purpose of the process as they are so caught up in the mechanics of it. Employees feel they are being ‘sheep dipped’ through a process which provides them with little opportunity to learn and improve on their performance and instead feel like they have been spat out of the end of year review and are demotivated and undervalued.

Compounding this, how we work is rapidly changing; organisation structures are becoming flatter with an increase in the number of remote working teams that quickly form, dissolve and reform. How well placed are managers, who frequently change with projects in providing constructive and developmental feedback at the mid year or annual review? Many companies have adopted the 360 tool to ensure feedback from previous managers, colleagues and customers is captured. However, feedback participants are often restrained by the rigidity of the process as feedback tools are only ‘live’ for a small window prior to the end of year review, therefore relying on the memory of participants to recall events that may have occurred months earlier.

Performance feedback provided only once or twice a year at a point in time determined by a process is not conducive to building an organisation which is dynamic, where its people can learn and grow continuously and be ever more responsive to markets’ and customers’ needs.

Employees have a growing hunger for regular ‘in the moment’ feedback. This may have been born out of the explosion in use of social technology shaping our expectations of the immediacy of feedback. In addition our expectations of the capability of work tools are changing. With generation Y, the digital natives, dominating the workforce in ten years this pressure on organisations will only increase.

What is performance mindset and could it address some of the challenges faced by the PM process? A performance mindset could be described as creating a custom and social behaviour within an organisation that supports the continuous learning and development of its people. This in turn would result in PM practices becoming inherent in what people do on a day-to-day basis.

For example, rather than objectives being set once a year and reviewed, at best, during the mid year review, they would be written and amended as and when required. There would be an expectation amongst all employees that they would coach and receive performance feedback regularly (even daily!) from those they work with, not solely from their manager and the output of a 360 tool.

There would however be a number of challenges, too many to detail here, associated with developing an effective performance mindset, not least how an organisation would go about creating it!

However, new cloud based social PM platforms can support the embedding of a performance mindset. For example, Salesforce, 7Geese and Small Improvements provide a suite of PM practices including real time feedback, continuous coaching, recognition, objective setting and tracking. Organisations that have deployed these technologies herald them a success and believe they are transforming their businesses, making them more collaborative, responsive and supporting their employees’ continued development.

It takes a bold leader to overhaul such a key business strategy. Organisations that have grasped the nettle and significantly changed their approach to PM, in the hope of bringing about a cutural shift, are reaping the rewards and seen increases in either revenue or employee engagement or both, including Expedia, Adobe, Juniper Networks and Atlassian. However, whether these organisations have fully established a performance mindset or just modified their processes to include greater flexibility in writing and amending objectives, more regular quality feedback and coaching from potentially anyone an employee works with, should be explored in more detail. The emphasis in these organisations has shifted from training managers on the PM process to building a stronger coaching capability within the organisation, enabling anyone to provide timely and useful feedback.

The Corporate Executive Board surveyed senior executives who stated that they needed a 20% improvement in employee performance to meet goals. Their belief is that improving conventional PM practices will only achieve a 3%-5% improvement. As per Emma’s blog, performance management is broken and at present there are only a handful of organisations biting the bullet and trying something new. It will be fascinating to see whether the approaches taken by these trail blazers pays dividends in the long run.

To see the extent to which your organisation is embracing the emerging trends in PM, look out for our free tool which will be live on in January 2015.