Where now for performance management?

This last year has seen unprece­dent­ed changes in the field of employ­ee per­for­mance man­age­ment. It all start­ed with high pro­file organ­i­sa­tions such as Deloitte, Accen­ture and Gen­er­al Elec­tric announc­ing that they were aban­don­ing the tra­di­tion­al annu­al per­for­mance appraisal. This then start­ed a domi­no effect with more than 52 large com­pa­nies now mov­ing their per­for­mance man­age­ment process­es away from once-a-year per­for­mance reviews. Numer­ous oth­er organ­i­sa­tions are fol­low­ing suit. Whilst a lot has been writ­ten in the media about what is wrong with annu­al per­for­mance appraisals, less has been said about what the alter­na­tives are. So here are four prin­ci­ples of what I believe will under­pin tomorrow’s per­for­mance man­age­ment, based on my recent dis­cus­sions with HR lead­ers and what the lat­est research is telling us.

Dis­cov­er our 2020 Per­for­mance Man­age­ment Trends to see what’s in store this year.

Prin­ci­ple 1. Empha­sis on reg­u­lar, high qual­i­ty per­for­mance discussions

Per­for­mance man­age­ment process­es seem to have got lost in form fill­ing and box tick­ing. Lead­ing organ­i­sa­tions are now putting the empha­sis back on employ­ees and their man­agers hav­ing reg­u­lar con­ver­sa­tions, or ​‘check-ins’, through­out the year. Research from the Neu­roLead­er­ship Insti­tute found that 68% of com­pa­nies are rec­om­mend­ing quar­ter­ly con­ver­sa­tions or more. In prac­tice, the major­i­ty of HR lead­ers I have spo­ken to are rec­om­mend­ing month­ly check-ins, although they are giv­ing man­agers the dis­cre­tion to change this fre­quen­cy accord­ing to the needs of indi­vid­ual team members.

Prin­ci­ple 2. Fre­quent feedback

Mil­len­ni­als have now over­tak­en gen­er­a­tion X as the largest share of the work­force. These 18 – 34 year olds have grown up in a world of instant feed­back and for them, work should be no excep­tion. Yet a recent sur­vey by Wake­field Research found that 74% of mil­len­ni­als said they were ​“in the dark” about how their man­agers and col­leagues think they are per­form­ing. To make mat­ters worse, over half of those sur­veyed said their man­agers are not pre­pared to give feed­back dur­ing per­for­mance dis­cus­sions. HR lead­ers are telling me they want to address this by using tech­nol­o­gy to allow feed­back to be giv­en ​‘in-the-moment’, at any time, and not just once-a-year as is often the case with tra­di­tion­al 360 degree feed­back. They want to encour­age more pos­i­tive feed­back, as well as con­struc­tive feed­back, and for col­leagues to get into the habit of giv­ing each oth­er feed­back, rather than feed­back being viewed as the domain of line managers.

Prin­ci­ple 3. For­ward-focused reviews

Do I think that per­for­mance reviews will die out? Prob­a­bly not. More than half of the HR lead­ers I have spo­ken to this year feel that there is still very much a place for hav­ing peri­od­ic longer term reviews in addi­tion to reg­u­lar check-ins. How­ev­er, they will be less about assess­ing past per­for­mance and focus more on agree­ing spe­cif­ic actions to build on past suc­cess­es, learn from mis­takes and enable per­son­al and career devel­op­ment. As Ellyn Shook, Chief HR Offi­cer at Accen­ture recent­ly said, ​“Rather than tak­ing a ret­ro­spec­tive view, our peo­ple will engage in future-focused con­ver­sa­tions about their aspi­ra­tions, lead­ing to actions to help them grow and progress their careers”. Such a shift won’t take place overnight as it will require man­agers to adopt a coach­ing style when dis­cussing per­for­mance. There­fore, HR will need to focus their atten­tion on devel­op­ment man­agers’ coach­ing skills, rather than design­ing new appraisal forms.

Prin­ci­ple 4. Keep­ing things simple

The CEB has been advo­cat­ing for some time now that the HR pro­fes­sion has made per­for­mance man­age­ment too com­plex in an attempt to increase objec­tiv­i­ty. Whilst this was well inten­tioned, the net result has been unprece­dent­ed lev­els of dis­at­is­fac­tion, with over 75% of man­agers, employ­ees and HR heads feel­ing that per­for­mance man­age­ment results are nei­ther accu­rate nor effec­tive. Almost every HR per­son I have spo­ken to this year has told me that they want to sim­pli­fy their per­for­mance reviews. Com­mon themes emerg­ing are to pro­vide prompts for dis­cus­sion rather than detailed forms to com­plete, and drop­ping per­for­mance rat­ings and time-con­sum­ing cal­i­bra­tion process­es. Many organ­i­sa­tions are still using a paper-based approach and are increas­ing­ly look­ing at online per­for­mance man­age­ment sys­tems to help to sim­pli­fy their processes.