What’s the Value of Performance Management?
Performance Management systems can be so cumbersome leaders wonder about the value of them. It’s assumed performance management drives organizational performance. However, this may or may not be true!
A common complaint I receive when I speak to employees is that the annual performance management process is a real burden and just seems to be to satisfy HR.
When I ask employees what if anything they value in the process – the answer is always the same “the conversation with my manager”.
If employees feel performance management is a burden, can you imagine how a manger with 5 or more direct reports feels?
What does the research say?
Research shows that the top 3 characteristics of effective performance management systems are:
- Quality performance discussions; especially the developmental aspect
- Agreeing clear objectives
- Accuracy of ratings (both from the human perspective and the tool/instrument used)
Many Organizations have adopted performance management systems that have lots of forms and complex rating systems, but this is changing.
In short the focus is shifting to creating quality performance conversations which means; (i) continuous feedback, (ii) clarity of purpose of the appraisal and the objectives set and agreed, (iii) a robust rating tool. However, the most effective of the 3 in improving performance is Quality conversations…if done right!
Creating quality performance conversations
So how do you create quality conversations?
Through 2 key ingredients:
- Building Leadership Trust- which means building a culture that values character;
- Building Coaching competency amongst leaders
Employees trust leaders that show integrity, are credible, and show respect for them. When employees trust their manager, their working relationship with them will be open, honest and productive. This leads to continuous conversations and feedback, and that includes healthy debate and challenge. Feedback is not just at the annual or quarterly review/appraisal meeting.
In a culture where conversation is continuous the focus of the performance review/appraisal is agreeing Specific, Measurable, Achievable, Relevant and Time-framed objectives, discussing progress on previous objectives set and agreed, and, identifying action steps to ensure the objectives will be met. This doesn’t require complex forms!
The other key ingredient in creating quality conversations is coaching. Coaching is a Transformational Conversation, built on a transparent relationship, where the coach supports change and is engaged in continuous leadership development of their people.
So, instead of organisations investing thousands of dollars in designing and re-designing performance management systems; it’s time to invest in people. Knowing our people and what makes them ‘tick’ builds relationship. It can also improve performance by harnessing their uniqueness. It’s time to simplify the systems and focus our energies and financial resources on developing leaders of character who employees trust and who can coach their team to success. As Doug Conant, CEO of Campbell Soup said:
The First thing for any leader is to inspire Trust