How To Build An Effective Performance Management System In Changing Times

6 ways to build a continuous performance management strategy

The digital transformation of the 21st century made an incredible impact on our world, our communities, and our businesses. Despite this shift and ever-changing times, many organizations still rely on traditional performance management systems.

Performance management typically involves a forced ranking of an organization’s employees once a year. Over time, this rear-view mirror approach proved ineffective for fast-paced, agile, and innovative organizations and employees. Employee performance became less about production and more about collaboration, communication, and adaptability.

Yet many performance management systems still fail to positively impact businesses’ bottom lines. In fact, recent research by the Brandon Hall Group reveals that current performance management approaches do not increase employee engagement or performance.
Businesses that fail to adapt to the ever-changing times and modern approaches to performance management may be faced with:

● Declining employee engagement
● Increased turnover
● Mounting competency and skills gaps
● Difficulty growing revenue and profit
● A lackluster employer brand

In this article, we’ll explore the ways that performance management has changed over the years and how talent-savvy leaders can adopt a new performance management approach to drive business success.

The Shift to Modern Performance Management

Implementing a next-generation performance management system calls for a new approach. Continuous performance management is a coaching-intensive process that empowers individuals and teams to drive performance and success. Evaluation and performance rankings are replaced with continuous manager-employee coaching that enables employees and teams to impact individual and business success.
 
An evolved workplace, combined with these pressures below, have reshaped the way organizations approach performance management:

Access to data and technology
HR leaders have no excuse for conducting subjective and biased employee performance reviews. There’s no shortage of tools available that help people leaders collect the right data to approach performance management with an objective and informed mindset.

The impact of team performance
Managers are no longer solely responsible for influencing individual, employee performance—but team performance. This reality requires an approach that motivates teams while being mindful of individual motivations, strengths, needs, and perceptions.
 

Building strong relationships matters
Annual performance reviews aren’t an effective way of building strong relationships. Employees require honest, frequent, and ongoing conversations and feedback, in a highly personalized and individualized way.

Feedback inspires growth and development
Positive or constructive, performance feedback shouldn’t be withheld until the end of the year. Organizations, where employees review their personal goals quarterly, were nearly 4x more likely to score at the top of Deloitte’s Total Performance Index.

6 Ways To Build a Continuous Performance Management System

To transform performance management into a process with real business impact, organizations must:

● Link performance to all other talent processes
● Empower employees to own their performance
● Coach managers to facilitate continuous feedback
● Encourage inclusive, real-time, employee recognition
● Develop a complete picture of employee performance
● Leverage technology to impact business success

1. Link performance to all other talent processes
From senior leaders to individual contributors, everyone’s contribution counts. Leaders should solicit and listen to employee ideas and feedback. Training, coaching, and feedback should occur at all levels of the organization. Leaders should be on the same page about an organization’s overall performance management strategy.

2. Empower employees to own their performance
Talent-minded organizations create engaging ways to connect with and develop their employees. Employees need to be active participants in their performance development and career growth. Employees should:

● Seek regular performance feedback
● Propose performance goals and revisions
● Suggest agenda items for performance check-ins
● Participate in 360-degree reviews
● Advocate for their own career development

3. Coach managers to facilitate continuous feedback
Help managers have less formal discussions with employees and more frequent conversations. Encourage them to solicit feedback regularly and align performance with employee aspirations and performance progression. Managers should:

● Set and track collaborative goals
● Meet regularly with employees to discuss performance
● Recognize progress and development
● Provide feedback and coaching to improve
● Facilitate frequent career conversations

4. Encourage inclusive, real-time, employee recognition
A true culture of recognition means recognizing employees at all levels, across the organization, without bias. Recognition should extend to individuals, work teams, business units, and locations. In other words, recognition must be inclusive or “democratized.”

5. Develop a complete picture of employee performance
Modern performance management can help reduce bias -- specifically confirmation and recency bias -- because performance conversations are ongoing and can evolve over time. Collaboration, reflection, and the ability to revise goals and evaluations help to reduce the likelihood of bias. This gives managers a more complete picture of an employee’s performance so that individual goals can be adjusted to reflect:

● Employee performance
● Team goals
● Changing business conditions

6. Leverage technology to impact business success
Performance management should mirror the digital experiences employees have outside of work. Improve the performance of your workforce using sophisticated performance management software that enables:

● Goal-setting and tracking
● Ongoing performance conversations
● Employee recognition
● Continuous feedback
● Frequent talent reviews
● Employee learning and development

Modern performance management is still about conversations. But today’s performance conversations should be regular, collaborative, two-way interactions. Managers and employees should exchange facts, ideas, and opinions that focus on moving individuals, teams, and organizations forward.

Anne Maltese is the Director of People Insights at Quantum Workplace. She leads a team of subject matter experts on employee engagement and performance. Anne joined Quantum Workplace in 2016 after being in a consulting role at Gallup. Visit www.quantumworkplace.com Connect Anne Maltese