Performance management: are your processes fit for purpose?

Performance management: are your processes fit for purpose? In summary…

• Involving managers and employees in the development of performance management processes ensures relevance and increases buy-in. Piloting new systems with focus groups can help address potential issues before broader implementation​
• A well-planned communication strategy and tailored training for managers are essential. These steps ensure all stakeholders understand the purpose, mechanics, and benefits of the updated system​
• Modern HR software streamlines performance management, making it more agile and accessible. It reduces administrative burden, facilitates continuous performance tracking, and aligns individual goals with organisational priorities

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When your appraisals, reviews or check-ins roll around, how are they received across your business? Are employees happy and excited at the thought of discussing their performance? Or does the thought of an appraisal fill them with dread?

If it’s the latter, they’re not alone. In fact, according to a Gallup poll, there’s evidence to show that only 14% of employees strongly agree the performance reviews they receive inspire them to improve. So, what could be behind these feelings of apathy towards performance reviews?

Understanding the demotivating factors

The debate about how to fix performance reviews has been raging for well over a decade, pre-dating Adobe’s much publicised announcement in 2012 that they were going to “abolish the annual performance review format”. And, while the jury is still out on what really works, there’s a strong body of evidence that shows what doesn’t.

For example, an article published in the journal Strategy and Business questioned whether traditional forms of performance management (particularly approaches which rate or rank people) are the real demotivating and damaging factors at play.

The authors identified at least two problems. Firstly, some performance management approaches  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).

Secondly, they argued, if people feel they are being measured or compared with others, it provokes a ‘fight or flight’ brain response. This can get in the way of the reflective and considered dialogue needed to make a performance management conversation two-way and truly effective.

Essentially, if your performance management processes are not fit for purpose, it’s unlikely you will ever get the best from your employees.

Now that we know some of the key demotivating factors, what can HR practitioners do to help make their organisation’s performance management processes more motivational, transparent and more developmental for everyone?

Make feedback an ongoing and frequent process

Feedback shouldn’t just be saved up for yearly or even quarterly appraisals. If you want to stimulate a real step-change in people’s performance, you need to supplement the formal review with regular two-way performance conversations.

It’s about giving ongoing feedback at key stages (perhaps after a project or important piece of work has been completed) and widening the feedback circle when appropriate to include clients and colleagues. This can be done formally through 360-degree processes or simply by encouraging employees to ask their fellow team members ‘how it was for them’.

Anyone with a growth mindset is likely to be hungry for feedback (in another recent Gallup survey, 84% of employees said frequent and meaningful ‘fast feedback’ is critical), so don’t shy away from it in your organisation’s processes!

Celebrate successes

Even with everything we’ve learnt about the psychology of performance reviews, 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.

Now, 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

Future-focused 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.

Combined with regular conversations, a ‘forward looking’ perspective is much more useful than the ‘looking back’, ratings-led approach of conventional reviews. It reflects the realities of today’s fast-changing business world, meaning your processes can be more agile and adjustable to individual or team goals if priorities suddenly change.

Make it transparent

A CIPD survey found only 39% of people felt their organisation’s performance management process was ‘fair’, and perhaps this is unsurprising. In many companies, processes are applied inconsistently and depend greatly on whether line managers regard performance management as a useful tool or an onerous ‘tick box’ exercise they must complete to keep HR happy. However, the latest technology can do much to streamline performance management processes, support regular check-ins and make everything much more open.

HR systems with integrated performance management software 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. That way, 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.