We’ve been doing a lot of thinking about performance management recently. It’s something that our clients are increasingly asking us to help them work through. No surprise then that Deloitte’s 2014 Human Capital Trends Report states that 92% of companies say that performance management is urgent or important.
It’s not the most riveting subject, I grant you, but one which is almost universally greeted with a groan by employees and managers alike. The overriding feeling is that there must be a better way. For a few years now, the growing number of voices have been calling to scrap the annual performance review altogether. Reasons vary along the following themes:
1. It doesn’t improve the performance of the business, so why bother?
2. It ties the business up in knots for weeks of the year and distracts us from our “real” work.
3. It demotivates staff who don’t receive the evaluation or rating that they think they deserve which actually has a negative effect on performance.
4. It’s a stupid process imposed on the business by HR to tick boxes.
The most forward thinking organisations are moving away from annual performance reviews, towards a model of continuous quality feedback on how an employee is progressing and a focus on regular developmental coaching conversations between manager and employee. This is coupled with goals that are meaningful to the employee whilst being strongly linked to the strategic objectives of the organisation. Simple, huh? Microsoft most publicly made this shift last year. It’s probably still too early to say whether this calculated gamble has had the desired effect, but it certainly makes a lot of sense.
The key to the success of this approach, or indeed any of the more traditional approaches is the capability of managers to be good coaches and to deliver meaningful feedback. I love the idea from Samuel Culbert, a professor at UCLA, that managers and employees have joint accountability for the performance of the employee. This totally flips the dynamic of the interactions between manager and employee. Conversations become much more about what is needed from both sides for the employee to be successful. Culbert calls this a “performance preview.”
Very few managers naturally have the capability to do this. The most common complaint we hear from our clients is “our managers just aren’t capable.” Microsoft recognised when making the shift to the new approach, their manager population was going to need considerable support and development to help them and they invested heavily in this population.
So whatever approach is used in your organisation, if you do nothing else think about how you can support and develop your managers to be better coaches and give more meaningful feedback. It will pay dividends for the performance of your business (an easy business case to make) and your employees and managers will thank you for making the performance process a far more productive and positive experience.