Three Essential Ways to Fix Your Performance Management Approach
By Kristen Bakalar
Let’s face it: performance management isn’t having the impact we want it to. With all the bell curves, rater bias, “recommended” discussions, 360-degree feedback, data input, data analysis, etc., the approach is getting in the way of what’s important: managing performance.
In an ideal world, the performance management approach should be helping an organization move towards – or maintain – high performance. But we’re not finding that to be true, necessarily. In January of this year, BlessingWhite surveyed over 1,200+ employees and, based on that research, we’re recommending three performance management best practices to help get employees to increase their contribution to the company and increase their satisfaction at work. This will lead to an engaged and productive workforce, and one that is high-performing.
Three Ways to Fix the System
1. They want it NOW – give employees regular coaching on their performance!
In line with our expectations, our research shows that the majority of employees have a negative view of the end-of-year performance conversation. However, of the ones who have a positive view, 77% of them receive regular coaching throughout the year.
Providing coaching throughout the year takes the power away from that dreaded year-end conversation, and places value in the day-to-day course corrections. The daily conversations – or continuous feedback – between manager and employee become about making small changes, adapting to new strategies, improving performance, trying new ideas, and maintaining contribution. The yearly or semi-yearly conversations are too infrequent to have an impact on day-to-day performance. In that scenario, performance feedback comes too late to make a change. So it begs the question, “what’s the point?” If you want to improve the contribution and satisfaction of the employee, open up that line of communication on a more regular basis.
2. The system measures the past; employees want the future!
Employees are typically eager to perform at a high level. This is not only to do a good job for the organization but also to build their own career, grow personally and professionally, and move themselves towards the highest level of satisfaction as possible. Many performance management systems look at the individual’s contribution from the past year, but not many address the employee’s personal goals, growth opportunities, career opportunities, or general satisfaction. According to our performance management best practices research, only less than 35% of performance conversations include a discussion about employees’ career progression. Even though employees perceive this as incredibly important to their success. As part of the pre-work questionnaire in our Helping Others Succeed program, we ask employees and managers to rank the importance of 29 items. In looking through that data (~400,000 pieces of information), we found that the largest gap between manager and employee was in response to this item: “Being an advocate for his or her development opportunities, promotional options, and career growth.”
Managers need to be more proactive about having career discussions with their employees. Employees own their careers, we know this, but they are yearning for their manager to be an advocate for them, too. As the system currently stands, very little attention is paid to the employee’s satisfaction or career potential. Almost the entire discussion is focused on that employee’s contribution to the company. The system measures what they did; they want to know what they can do! If companies continue with the current, typical performance management approach, this “what have you done for me lately” attitude will eventually kick them in the year-end.
3. Leaders, get your finger on the pulse of the organization!
Another trend we noticed in the latest round of research was the perception of fairness and accuracy of the performance management approach as experienced by managers and non-managers. More leaders (45%) think performance management systems accurately measure performance than non-leaders (36%), and more leaders think it is instituted fairly, too. So it is probably no surprise that 43% of managers have a positive reaction to the end-of-year performance review, but only 28% of non-leaders share that enthusiasm.
The higher you move up in an organization, the more positive the perception of the performance management system (accuracy, fairness, sustaining or increasing engagement, etc.). The view from the top looks a bit different than from those on the front lines, so leaders need to figure out a way to be more in touch with the reality of their employees. How? Ask them. Simply starting a conversation, opening up the lines of communication, and engaging them in dialogue is a worthy place to begin.
In the End, It’s not about the Process
It doesn’t matter if your organization relies on ratings to determine compensation, or if your organization is data-driven and needs to know how people rate, or if you’ve removed performance management from your company altogether. The point isn’t what system you use, but how your employees and managers are interacting throughout the year. Providing regular performance feedback and coaching will only serve to augment the performance management approach. Having career discussions with employees will only increase their engagement and commitment. And leaders being more aware of the experiences of all their employees will only help them make more sustainable decisions that benefit the entire organization. We aren’t advocating for a new approach; we’re suggesting performance management best practices that take into account what employees need, as well as what the organization needs. The organization needs a high-performing employee – lots of them! So why not put some ideas into action that will help achieve that seemingly simple goal?