Fixing Performance Management
Performance management is out of date, out of touch, and out of control. This post explores key flaws and required fixes, along with a model of the 3 key principles for driving performance management innovation.
Organisations are struggling with the way performance management is being handled. Truckloads of time, effort, and money is being thrown into this burdensome system each year. Over the last decade, confidence in these systems has been falling.
A whopping 96% of organisations surveyed in a 2015 study by PWC either recently changed their performance management system, or were planning significant changes over the next 12–18 months.
Key stories that showcase significant changes can be learned from the likes of Adobe, GE, and Google; as well as consulting companies with performance related services such as Accenture, Deloitte, and McKinsey.
What is clear for the majority of organisations is that their performance management system is out of date and out of touch, and it has gotten out of control.
Out of Date
It is out of date because the systems have measurement methods that lack the speed, efficiency, accuracy and fit required for the current working environment.
Out of Touch
It is out of touch because performance management processes and activities are being administered in ways that don't meet the needs of organisation, leaders, HR, and employees. Technology provides us with the opportunity to capture and analyse data more effectively. Analytical capabilities have progressed in the workforce and people space, and the time for getting up to speed is now (before it's way too late).
Out of Control
It is out of control because it is fatally flawed in it's current form and ripe for innovation. Organisations need to take control over fixing the flaws because performance management will remain an essential part of running an organisation.
If you are one of the majority who are investing in or actively looking for how to bring about positive change and innovation to your performance management system, spend 45 seconds reading the rest of this post and reflect on the messages and questions proposed. Then, if what you read strikes a cord or you have questions, get in touch because we've got work to do!
Leaders are frustrated that current systems and processes are a productivity burden without providing the performance boost for which they were designed.
Falling Short for HR
HR and P&C professionals have lost confidence that performance management systems are bringing bringing value - data is inaccurate and incomplete, strong internal analytical capability is lacking, administration is onerous, process adherence is poor, and the list goes on and on...
Employees' feel that the current approaches fail to meet their current and future needs. They want - nay, need feedback and direction. And, they need it with immediacy and consistency - not in 6 months!
It is clear, performance management is a puzzle with missing pieces. We all have an obligation to fix things and complete the puzzle.
Leaders need to develop the skills and routines that will enable regular and constructive performance discussions. Leaders must input their frustrations as part of an innovation process geared towards improving the performance management system. The time for issues without innovation is behind us.
Human Resources / People and Culture
The People discipline - whatever your call it - needs dedicated talent working on Analytics as the backbone to performance management. I believe the relevance of strategic human resources management and organisational development depends on it. It is time for the people discipline to coordinate the innovation project that will design and deliver a new and improved performance management system.
You owe it to your career AND organisation to speak up. Your performance has an impact on your organisation's outcomes, as well as your career progress. Share how the performance management system is failing you (but perhaps not in those words).
There are 3 key pieces that are essential to the performance management puzzle (see the model below). There is a great deal of effort being invested in 2 out of the 3, can you guess what the missing piece is?
Increasingly, organisations are recognising the motivational impact of aligning performance with values. When values and performance are aligned, employees are more engaged - more 'connected'. They are motivated to perform through a sense of purpose - they have a clear 'Why'. This is foundational, and as such, is positioned at the base of the model.
Understanding and articulating what performance is required is essential for optimal contribution and value. Performance provides the focus for what to do that will create meaningful Progress. Research shows us that meaningful progress is a key motivator of ongoing performance and performance improvement. When we are measuring and managing performance and identifying progress, this provides a clear indicator of the Contribution employees are demonstrating. This is the pinnacle piece of performance management, and as such, is positioned at the top of the model.
Whereas measuring and managing 'what' to do and aligning that with 'why' is a great start, it is incomplete approach to performance management. Employees need to be willing and capable to give their best.
Employees need to be willing to perform at their best if they are to be productive at work. Without 'The Will, there is 'No Way' they will stay connected and contributing high-performance. Measuring and managing employee 'will' is the central and missing piece of the performance management puzzle. Getting this right creates the capacity for employees to engage and sustain high-performance over time.
So, if 'The What' relates to Performance, and 'The Why' relates to Values, can you guess what is involved in creating 'The Will'?
If you can, get in touch and let's talk about it.
If you can't, get in touch to learn about it.
If you disagree that there are 3 pieces to the puzzle, get in touch and let's have a constructive debate on the topic.
Whatever you do, do something!
I am currently designing and delivering innovation workshops and mentoring programs with clients to target performance management and development challenges. Get in touch to find out more.