Stop: Before You Change Your Performance Management, Think!
There is currently a flood of white papers and how-to manuals available on the Internet (many for free) on how to create a successful ‘agile performance management’ process. One problem is that the externally designed or off-the-shelf agile performance management systems will not work for you. In fact, if you are following an existing pre-formed HRIS Performance Management system you are handcuffed.
The reason is they seem to make a few assumptions. They assume that your current performance management process is not working, you want to change to more frequent feedback, and you must follow some very logical steps which are classify as common sense. However, none have considered your own culture, existing business plan or your propensity for giving and receiving honest / truthful performance observations.
But, if performance management was about common sense we would not have almost universal disdain for the process of managing performance in corporations.
Reading the blogs and whitepapers on what you must do to build a better performance management mouse trap is like watching the same bad TV commercial over and over. You just want to grab the mute button and stop the noise.
First, why do you want performance management?
When speaking on this topic there is a question I ask at the start of the session that puts much of this into perspective: What is your company’s vision for and desired results from performance management? After the ‘deer in headlights’ effect wears off people begin to search their own memory banks. They often discover that the company doesn’t really have a vision for performance management but rather only a purpose.
To no one’s surprise the two most frequent reasons to justify the annual review and rating scale are:
Justification for the annual bonus or merit payout
Protection in case of litigation over a wrongful dismissal
First, the reality check is that the allotment of funds for the annual ritual of merit and bonus was completed before the reviews even began. What ends up happening is that employees are just being fit into what already is allocated; a formula for distribution of the already allocated money. Second, how many times has the evidence provided in the annual formal review been successful in the final decision of any legal case? A few lawyers I consulted the content of the reviews is usually not all that meaningful.
The question for you before you begin to dismantle that which does not need to be dismantled is what is your vision for performance management? What will the impact of performance management be on your employees, on productivity, and on your bottom line? Without knowing this you cannot measure what exists today. You might discover you don’t need a major alteration and disruption to things but rather a tweaking of something that is working rather well. On the other hand, you might find you need to blow up what you have and create something from scratch. But with a vision you will have a measuring guide to know you got it right (or at least moving in the correct direction).
Second; Before You Begin to Change Ask Employees
At a recent presentation on the topic I suggested that many companies that have been successful in having their new approach embraced because their employees were involved in the design before it began. That is not the compensation or talent management or executive employees, that were included, but the rank and file managers and individual contributors. The pride of ownership of the new or improved process was with the employees.
Ask your employees two questions:
What is it, if anything they like about the current process
If the process was to change, what is the one thing they would like that does not currently happen.
Many years ago, we asked this of a group of employees and from the frontline to the senior ranks, they unanimously said a one-page review form. Why? Because the company was using a 26-page performance review form. They also wanted to have a better explanation of how the work they did was related to the overall success of the company. They wanted to have a line of sight from their role to the vision of the company to know their individual contribution was meaningful. We provided the latter and it was part of a four-page form that electronically was connected to producing a one-page summary. The initial response was we asked for one-page why are there four? When they realized, each page was only the evidence collection for the one-page summary, they felt they were listened to.
Your employees have the answers you are seeking. Don’t make this a Human Resources or Talent Management project alone. Please don’t limit the employee input to a group of senior leaders. Make this a grassroots experience involving those who it will impact.
Out of this information you will learn several things. Don’t overlook drawing into the steering committee the highly-respected opinion leaders that seem to be negative or opposed to any changes. These individuals will become, likely, your most ardent ambassadors. Also, you will gain insight to possible small wins, potential challenges, and ideas you previously might not have considered. This should be the start of the design process.
What You Need to Know Before You Change
You should have an idea of the purpose and desired impact and corresponding outcomes for each purpose. Here is a list you might consider, but the definitions are up to you. In the end, you might realize you don’t need to change much to make your performance management process more impactful and meaningful. On the other hand, you might realize you need a total overhaul. Here is a partial list of questions to for your employees to consider:
Do your employees have clarity of the company strategic plan and how they make a meaningful contribution?
How are goals set at the start of the year to align to the above point?
Are your company values defined in clearly stated behaviours, universally applied to all employees, and understood by all equally?
Are your company behavioural competencies consistent with the company values?
Are your behavioural competencies validated internally to your company?
Do employees have autonomy in setting their own commitments and autonomy on how they will execute their own work?
When people meet how often is a direct report recognized for doing something right?
Does the year end meeting of manager and direct-report cause stress and anxiety and end with ambiguity?
Does the year end meeting take five minutes to summarize what the manager and direct report already discussed and focus immediately on the coming year’s goals?
Was the ‘rating scale’ you used mutually understood by all people involved at the beginning of the performance cycle?
With all this knowledge, you can have the fact-based evidence to build a business case that can focus changes. Those changes are needed to produce a real return on investment through improved productivity and higher levels of engagement coupled with improvements to retention. But the case that is built is not built by HR, it is built by your employees.
The next post will deal with the suggestions to make the modifications to a more agile performance management process more successful.
David has frequently been referred to as a provocative thinker. He asks aloud the hard questions others think to themselves. He has been working with organizations around the globe, on performance management for over 20 years. He has spoken on the topic of the new approach at conference in New York City, Toronto, Dubai and Singapore. His conclusion is there is no one benchmark or best practice. The reason is that each organization is unique unto itself. For assistance with additional questions to ask and on setting up a forward focused process that creates employee ownership and accountability please contact David. Thank you.
To read more on the importance of leadership acting with purpose (making the values real) and the impact of business success please read David's book on purpose, culture and leadership: Inside the Box: Leading with Corporate Values to Drive Sustained Business Success". His first book focused on the writing of behavioural competencies and their application to structured behavioural interviewing: The Talent Edge: A Behavioral Approach to Hiring, Developing, and Keeping Top Performers