Recent research from McKinsey suggests that performance management processes are not hitting the mark for employees or their managers. The majority of CEOs say they don’t find the process helpful in identifying top performers – while over half of individuals surveyed felt their managers weren’t getting the process right.
However, as McKinsey also points out, the problem is that in the absence of regular performance reviews, employees feel confused and managers have nothing much to go on when it comes to making decisions about pay rises or promotions – so end up putting together their own form of ranking instead.
With little transparency around the way people’s performance is rated and accusations of unfair treatment can quickly arise, leading to tension between colleagues and poor productivity. The answer, of course, is not to do away with performance reviews, but to find ways of doing them better – ensuring that people are clear about their objectives, that good quality conversations take place and that what’s been agreed actually happens.
Here are three reasons why it’s important to get performance management right – and three actions you can take to improve the process:
1. People want to know how they are doing
It’s human nature to want to understand how well (or otherwise) we are doing. Employees genuinely want to know how their manager views their performance and whether the contribution they are making is valued. And with a few exceptions, most people actively want to be working and behaving in a way that pleases their managers and supports their team. Good performance management is the cornerstone of strong employee engagement. Telling employees they are doing well gives them something to celebrate. Giving them feedback when things are not going so well, helps them focus on what they need to improve.
2. If you don’t tell people, they won’t know
It’s not uncommon for people to be completely oblivious to the fact that they are prioritising the wrong things, causing problems for others by actions they are taking (or not taking), or behaving in ways that are making others frustrated, upset or angry. Not everyone has a high level of self-awareness – and put simply, if you don’t tell people what they’re doing wrong, they will just carry on regardless. It may be that difficult conversations have to be had – but if issues are continually swept under the carpet, nothing will change.
3. Feedback is a gift
Or at least it should be, if delivered in the right way. The best appraisal discussions focus on what people are doing really well and explore how they can make even more use of their strengths. They are centered around celebrating successes, setting realistic and achievable goals and looking at ways people can link their individual aspirations with organisational objectives. Poor performance or bad behaviour does of course need to addressed. But managers stand to gain much more from focusing on the positives and finding ways to enthuse and motivate people – rather than trying to ‘fix’ areas that don’t lie within an employee’s natural skill set or searching for negatives that don’t really exist.
So what can organisations do to make sure their performance management processes hit the spot?
Prioritise regular feedback
Formal appraisals definitely shouldn’t be the only time employees receive feedback from their manager. It’s no good waiting six months to tell someone how pleased you are with the way they managed a project – or how they could perhaps have handled a situation with a client differently. The moment to enthuse them will have passed – or they will have forgotten the detail of what went wrong. Managers need to make regular feedback part of the way they manage their staff, with regular informal check-ins and coaching on the job.
Leverage performance management software
The McKinsey research highlights the important role data can play in the performance management process. It gives managers an objective measure of how well people are performing and evidence to support any decisions they may be making about people’s learning and development needs or career progression. The latest HR systems provide a central place where information from performance reviews can be stored and easily accessed – putting the information managers need at their fingertips, providing greater visibility to employees and helping to ensure performance reviews don’t just get filed and forgotten.
Managers don’t necessarily have the skills they need to performance manage their people effectively. They often shy away from difficult conversations because they don’t want to upset people or fear falling foul of legislation. They don’t know how to structure and plan for a good performance conversation and sometimes struggle to engage in open and honest dialogue. Providing training will help managers build the right skills so that they can hold discussions that leave people feeling motivated and valued.