Insights

Want a performance management system that actually drives performance?

02 August 2016

Research tells us as many as 38% of managers [1] think that their organisation’s current approach to managing performance is not supporting their organisation in executing their business strategy.

We continue to read about large organisations making important changes to their performance management practices. So, what can we learn from these organisations?

On the face of it, managing performance is an invaluable, critical activity – to both reset and re-align the focus of leaders, teams and individuals, and to provide individuals with the opportunity (in varying degrees) to define what skills and capabilities to fine-tune or develop.

And yet, for all the expected value of the performance management process, do you know anyone who actually looks forward to performance conversations? I don’t come across a huge number (in either professional or social circles) who are enthusiastic participants, and many of us are frustrated by cumbersome or compliance-oriented processes that are disconnected from the work that needs to be done, every day.

A number of organisations, including Google, Juniper and Accenture, have determined that their practices have not been working as effectively as intended. So, what are they – and others – doing to address the disparity between the opportunity and the reality?

Removing ratings – the value of ratings is being questioned. Studies in neuroscience suggest that reducing the conversation to a rating can send individuals into a ‘threat’ state, and a more constructive state to talk about improving performance is the ‘reward’ state (for an exploration of the impact of ratings on our thinking and reactions, check out Kill your Performance Ratings, Strategy + Business by David Rock, Josh Davis and Beth Jones)
Increasing the frequency and quality of conversations – one of the key shifts is towards more frequent conversations about performance. Coaching and feedback (or feed-forward) throughout the year is being tested, as a way of turning attention to what can be done differently in future
Focusing on setting goals – Forward-focused discussions on setting goals are being emphasised

This dialogue can lift awareness and create an impetus to look at what’s working with your organisation’s performance management system, so you can decide what needs to be different. What changes do you need to make so that this system supports your organisation in realising the broader strategy?

These shifts raise some important questions:

How can you ensure performance conversations connect the day-to-day work to organisational and team goals?
What is the value and costs of ratings for your organisation (individuals, leaders and the organisation)?
What additional skills do your leaders need to make performance conversations more meaningful?
How can you legitimise the time leaders need to spend with team members on coaching, providing quality feedback and guidance?

We know that one of the most significant levers of organisational engagement is the relationship between a manager and their direct report. Susan Scott (author of Fierce Conversations) suggests that ‘the conversation is the relationship’. To make the shift to enhancing performance through conversations, it’s critical that we set our leaders up to:

Be close enough to the work to be able to add value to the conversation – help identify roadblocks, create connections to other streams of work, know the players and contributors and create introductions
Align the performance cycle to the duration of goal cycles – doing so can enable conversations about what’s worked, what’s been learned and what needs to change (for more on this idea, see the white paper by Kimberly Schaunfenbuel, Program Director, UNC Executive Development [UNC Kennan-Flagler Business School paper])
Have the space and time to manage their own and others’ work – this may mean taking time to reconnecting to the broader purpose (perhaps ‘going slow to go fast’) or authorising time for ‘recovery’ activities
Check in often enough to provide timely guidance on the changing context, organisational goals and dynamics in a way that suits the task, individual and workload
Remove the requirements – the system ‘audit points’ need to be related to the quality of the work, not the completion of the paperwork by the due date ... the purpose of the system must be to enable performance, rather than drive compliance

If we can create the conditions for leaders to operate this way, we will have been successful in shaping a system and rhythm that enables performance. How can your organisation shape the system of performance management so that leaders and team members have meaningful conversations about the work, at the right time?

[1] Bersin & Associates, High Impact Talent Management and High Performance Management Report, 2011.