A New Approach to Performance Management

In this current series of articles on performance management (PM), we’ve presented what we think is a very convincing case that far too many PM systems in organizations today are broken and fail to deliver the kind of bottom-line business impact that they should provide. The dreaded ritual of the annual performance review or appraisal is probably the single worst aspect of PM that is in desperate need of a major overhaul if not complete elimination. But all of that clearly begs the question – What does a better way to do performance management look like? There are plenty of options, some big and some small, but either way you can change your PM system for the better.

Download the free whitepaper Performance Management: New Directions in Appraisal and Evaluation – The Autodesk Case Study

Here’s how:

Untangling your way to performance

Untangling your way to performance

Manage like a Coach or Mentor. Rather than a one-a-year ritual, performance appraisal should be happening on a continual basis and look more like a coaching or mentoring relationship between the manager/supervisor and the employee. It’s the only way to do performance management in a business world where change is both constant and rapid. In this kind of real-time, feedback-rich approach to performance management, substantial check-ins would occur at least monthly, but weekly would be even better. Goal-setting should also occur on either a quarterly or monthly basis. Companies that do this are getting much better results from their PM systems than companies relying on the annual approach.

Less Bureaucratic, More Agile. Part of the reason the annual performance review is such an awful PM tool is that it has evolved into something that feels like an overly complicated homework assignment – a nightmare of forms and boxes to check and narratives to fill out and ratings to be given and on and on and on. Imagine the freedom of just asking an employee two simple questions – What does the coming week look like for you? How can I support you in accomplishing what you need to do? That immediately feels more collaborative and supportive than talking about what did and did not go well for the entire past year.

Let the Employee Take the Lead. The beautiful thing here is that we’re not talking about asking managers to take the responsibility for initiating this kind of performance management. The data clearly show that employees want this kind of support, so let them take the initiative in getting what they need for feedback and development. They’ll be a whole lot more invested in the process than they are in any kind of annual review context.

Play to Their Strengths. A major flaw in most PM systems is that they approach the entire project from a remedial viewpoint. Here are the performance criteria and here’s how you fell short, so please do better. It just doesn’t work. People need positive feedback. This is another area where neuroscience comes into play. When it comes to learning and growing, the brain does both much better in areas where there’s already a strong foundation of neural networks, not in the weaker areas. Build on a people’s strengths and they’ll really shine. Don’t ignore the weaknesses, but also don’t expect them to be areas of primary growth.

Focus on the Future. This one almost seems like a no-brainer when you stop and think about it. Traditional PM systems that use annual reviews are illogically focused on the past that is, for better or worse, done and over and never to be changed. Everything about performance management would be much better off if focused on what can be changed, which is the future.

Hire Fewer Low Performers. The unfortunate thing about many PM systems (and especially those that utilize forced rankings) is that they just assume a certain percentage of employees will be low performers. Wouldn’t it be great if your recruiting and hiring practices were improved to the point that you rarely hired any low performers to begin with? It’s like a self-fulfilling prophecy – if you assume a certain percentage of people are going to fail, you’re practically guaranteeing that will be the case.

Those are six very worthy approaches to performance management that might look a whole lot different from your current system. Making the switch might feel like an overwhelming proposition, but the benefits in terms of better results on the other side are well worth it. Stay tuned for postings that describe how specific companies have fared in making these kinds of changes to their PM systems and the challenges they faced along the way.

September 25, 2014   Updated :July 31, 2017   annual performance reviews, performance appraisals, performance management   

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