Performance management – are your processes fit for purpose?

The spotlight has been on performance management this week thanks to a CIPD conference which has brought HR practitioners together to share best practice and learn about the latest trends in this fast-evolving field.

There’s no doubt that technological developments are driving some of the advances in the way organisations monitor and manage the performance of their people – but new insights from neuroscience are also helping to pave the way for more sophisticated approaches.

A recent article in the journal Strategy and Business questions whether some traditional forms of performance management (particularly systems which rate or rank people) are actually demotivating and potentially damaging.

The authors suggest there are two fundamental problems. Firstly, if people feel they are being measured or compared with others it provokes a ‘fight or flight’ brain response, which gets in the way of the reflective and considered dialogue that makes a performance management conversation truly effective.

Secondly, performance management systems can inadvertently lead to a ‘fixed’ mindset (the idea that intelligence and talent are set at birth and we can’t change them) rather than a ‘growth’ mindset (where we believe we have the ability to learn, develop and grow).

So what can HR practitioners do to make their performance management processes more motivational and in particular, more developmental?

Make feedback an ongoing process

Feedback is for life, not just for Christmas. In other words, if you want to stimulate a real step-change in people’s performance, you need to supplement the formal annual review with regular performance conversations. It’s about giving on-going feedback at key stages (perhaps after a project or important piece of work has been completed) and perhaps widening the feedback circle when appropriate to include clients and colleagues. This can be done formally through 360 degree processes or simply by encouraging the individual to ask people ‘how it was for them’. Talented people are hungry for feedback (in a recent CIPD survey 81 per cent said they valued feedback and recognition), so don’t shy away from it.

Celebrate successes

All too often, performance reviews focus on what went wrong, where people’s weaknesses lie and what they need to do to get better. A more effective approach is to turn the appraisal on its head and focus on what achievements have been made, what’s going really well and how the individual can do more of it. That doesn’t mean brushing poor performance under the carpet or ignoring important skills gaps. It’s about making the whole performance management process less ‘remedial’ and focusing on the positives rather than the negatives.

Focus on the future

Performance management conversations provide a forum where the manager and their direct report can work together to set goals. It helps to establish clarity about what’s expected, eliminates misunderstandings about what is and isn’t important, and ensures people are focusing their attention on work that is aligned to corporate priorities. This ‘forward looking’ approach is much more useful than the more conventional ‘looking back at the past year’ that tends to happen in appraisals. It means people are focused on what the organisation needs them to do right now and managers can be more agile, adjusting individual or team goals if corporate priorities suddenly change.

Make it transparent

In a recent CIPD survey, only 39 per cent of people felt their organisation’s performance management process was ‘fair’. This is hardly surprising. In many companies processes are applied inconsistently and depend greatly on whether line managers regard performance management as a useful tool or a ‘tick box’ exercise they have to complete to keep HR happy. The latest technology can do much to streamline performance management processes and make everything much more open. Emails can be automatically set up to nudge managers when formal appraisals or informal check-ins are due. HR systems with portals provide a central place where discussions about goals, aspirations and planned development activities can be housed and made accessible to the people who need to see them. Everyone is clear about what’s been said, what’s been agreed and it’s easy to check up on progress on a regular basis to make sure everyone is keeping on track.

How do you make sure your performance management processes deliver the goods? Why not share your best practice by commenting on our blog?

Some information courtesy of CIPD

Article reference: ‘Kill your performance ratings, David Rock, Josh Davis and Beth Jones, strategy+business, No 76, Autumn 2014.

You may be interested in reading about why employee performance management matters.

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