Financial Services are Seeing a Performance Management Revolution

Finan­cial Giants Are Now Adopt­ing Year-Round Per­for­mance Management

This year appears to be a year of evo­lu­tion for the finan­cial ser­vices sec­tor. Whilst the finan­cial ser­vices sec­tor has been slow­er to adopt new per­for­mance man­age­ment trends, major play­ers are now shak­ing up their approach­es to per­for­mance man­age­ment and join­ing the ranks of com­pa­nies like Adobe, Gap and Microsoft who have abol­ished numer­i­cal per­for­mance rat­ings for employ­ees in favour of a more pro­gres­sive approach.

It has often been argued that num­ber-based rat­ings seri­ous­ly impact employ­ee anx­i­ety, are over com­pli­cat­ed and time-con­sum­ing for HR and end up being ulti­mate­ly coun­ter­pro­duc­tive. Com­pa­nies the world over are shift­ing their focus to per­for­mance reviews that are fre­quent, col­lab­o­ra­tive and for­ward-think­ing, focus­ing on employ­ee strengths over weak­ness. This is in line with recent stud­ies that sug­gest that plac­ing empha­sis on employ­ee strengths can increase per­for­mance by up to 36%. Amer­i­can Express, Crowe Hor­wath and Gold­man Sachs are just a few finan­cial ser­vices that are embrac­ing this new reality.

Amer­i­can Express lead­ing the charge

Amer­i­can Express, the multi­na­tion­al finan­cial ser­vices cor­po­ra­tion, was ahead of the curve when it revamped its per­for­mance man­age­ment process in 2014. HR focus became more about col­lab­o­ra­tion, set­ting clear goals and cre­at­ing achiev­able per­son­al devel­op­ment plans with their super­vi­sors, known as their ​“devel­op­ment partners”.

These devel­op­ment part­ners are respon­si­ble for ensur­ing reg­u­lar, effec­tive and pro­duc­tive meet­ings through­out the year, where employ­ees dis­cuss their progress and suc­cess­es, as well as areas of con­cern. These check-ins are one-on-one, reg­u­lar and con­struc­tive, and are com­ple­ment­ed by more for­mal mid and end-of-year assessments.

Crowe Hor­wath intro­duces con­tin­u­ous per­for­mance management

It has recent­ly been revealed that Crowe Hor­wath, the glob­al account­ing firm, has ditched its tra­di­tion­al annu­al per­for­mance reviews. As of June 1, they have been replaced with a ​“Mea­sure What Mat­ters” pro­gram. This approach is more infor­mal and fre­quent, allow­ing for greater com­mu­ni­ca­tion between man­agers and employees.

The change came about, accord­ing to Julie Wood, the chief peo­ple offi­cer, when their annu­al engage­ment sur­vey reflect­ed that their exist­ing per­for­mance man­age­ment sys­tem was leav­ing a lot to be desired. They were spend­ing sub­stan­tial amounts of mon­ey with­out see­ing any val­ue in return. The sys­tem was tra­di­tion­al in nature, where com­pa­ny-wide goals were cas­cad­ed down to employ­ees and staff were marked on a scale from 1 (did not meet expec­ta­tions) to 4 (con­stant­ly meets expec­ta­tions) dur­ing an end-of-the-year review.

Employ­ees now all cre­ate a ​“Mea­sure What Mat­ters” plan in con­junc­tion with their per­for­mance man­agers, where­in they iden­ti­fy and dis­cuss three achiev­able goals that they should be work­ing toward that year. Mee­tups are now reg­u­lar and the goals are dynam­ic and sub­ject to change depen­dant on cir­cum­stance. Crowe Horwath’s deci­sion to make this change is under­stand­able when you con­sid­er that over half of com­pa­nies who choose to con­stant­ly revis­it and adjust goals are in the top quar­tile of finan­cial performance.

Gold­man Sachs Group rejects numer­i­cal ratings

Gold­man Sachs, the multi­na­tion­al bank­ing firm, has received media atten­tion recent­ly for active­ly decid­ing to over­haul its per­for­mance man­age­ment sys­tem fol­low­ing con­cerns over the bank’s over­all per­for­mance. The most sig­nif­i­cant change is the rejec­tion of its tra­di­tion­al nine-point employ­ee eval­u­a­tion rat­ing system.

Gold­man Sachs’ new method of review­ing per­for­mance focus­es more on employ­ee strengths and weak­ness­es. Man­agers and employ­ees are set to check-in with one anoth­er more reg­u­lar­ly, and man­agers are now required to pro­vide employ­ees with detailed sum­maries as to how they are per­form­ing and how they can improve. In this way, Gold­man Sachs is accept­ing a more for­ward-think­ing approach that focus­es on employ­ee devel­op­ment and growth. Lloyd Blank­fein, Gold­man Sachs CEO, calls this ​“an impor­tant invest­ment […] in our peo­ple and the future of our firm.”

How can per­for­mance man­age­ment soft­ware help?

For those decid­ing to change their per­for­mance man­age­ment sys­tems, inte­grate reg­u­lar com­mu­ni­ca­tion and boost pro­duc­tiv­i­ty, per­for­mance man­age­ment soft­ware can help organ­i­sa­tions to achieve these goals.

The inter­ac­tive nature of soft­ware means that teams can col­lab­o­rate and assist one anoth­er with valu­able, real-time feed­back, fos­ter­ing a gen­uine atmos­phere of team­work. The best per­for­mance man­age­ment soft­ware is mod­elled to reflect a social media plat­form, mak­ing it user-friend­ly and acces­si­ble. Good soft­ware also allows employ­ee objec­tives to be aligned to organ­i­sa­tion­al goals and updat­ed at any time in the year, ensur­ing objec­tives are both mean­ing­ful and rel­e­vant at all times. In this fast-paced and evolv­ing world, paper-based sys­tems are sim­ply not con­ducive to a dynam­ic and grow­ing envi­ron­ment. Top organ­i­sa­tions the world over are now see­ing the advan­tages of per­for­mance man­age­ment soft­ware, and are see­ing gen­uine results in terms of pro­duc­tiv­i­ty, employ­ee engage­ment and staff retention.