A talented and skilled workforce is the key to any organization. Performance management guides employee behavior to align with organizational goals. This happens because job responsibilities and expectations are clear and lead to increased productivity. Better information results in improved compensation and promotion decisions.
The performance management system
Performance management systems help an organization with employee decision-making and employee development. Decision making uses appraisal information as a basis for pay increases, promotions, transfers, assignments or reductions in force. Performance development uses appraisal information to guide training, job experiences, mentoring and other developmental activities. These two activities should not take place at the same time. Pay discussions need to be separate from performance, training and development discussions. When these activities are combined, individuals walk away with only a memory of the pay decision and do not remember growth opportunities that were discussed.
Key traits of a successful system
A prerequisite for success is getting commitment and support by executives at all levels. This sends a strong message internally and externally about the valued behaviors. If the organization does not have a strong performance management culture, educating the executive team on their crucial role in leading the process and the importance of performance management may be needed. One way of accomplishing this is to involve key individuals in the design and implementation process. Another way is to pilot the new system with the executive team. To implement a new system successfully: communicate to all employees the advantages and rationale for a new system; train managers on the purpose of the review and how to effectively conduct one; and continuously review the process to ensure it is accomplishing objectives.
Benefits of ongoing performance management
To create an empowered and skilled workforce companies need to go beyond reviewing employee achievements. Judgment should not be the sole focus of a performance system, but it should also emphasize ongoing support and improvement. An effective ongoing performance management process will:
• Drive business results and profitability: In order to give employees an understanding of where they fit into the company and how they contribute to the overall organization. Create company goals that cascade down through the company to individual goals. Aligning your workforce in this manner sets clear priorities and direction for each individual. It saves money and time by providing a clear path to achieve your mission. This promotes a focus on key business results and produces a financial gain which is not achieved without performance management.
• Improve management and coaching: Employees as well as managers need to understand how they fit into the big picture. This includes who and what they are supposed to manage. Allowing the manager to set goals with the employee and adjust goals as need saves the manager time. It also allows the manager to identify gaps in employee skill sets and offers a solution through consistent feedback and coaching, so the employee can achieve their goals.
• Promote job satisfaction and motivate your workforce: An effective employee performance management program will improve retention of your best employees, more quickly identify your lowest performers, and ensure everyone in-between gets the coaching, guidance and development opportunities they need to do their best work. By providing maximum opportunities for career growth there is a positive influence on employee loyalty. This also facilitates a relationship based on trust and empowerment between the employee and manager which improves overall organizational performance.
The main objective of a performance management system is to promote and improve employee effectiveness. With the support of the executive team and ongoing coaching, employees meet their company and career objectives. Performance management is an essential tool for companies who want to increase productivity and profitability. For more information on performance management, please visit contact us at firstname.lastname@example.org.
Many organizations go through the pain-staking exercise of conducting annual performance reviews, and they are disatisfied with the end-result. Unfortunately, their disatisfaction does not necessarily lead to process change because they are unsure about what they should migrate to.
Companies trying to make this complicated shift are doing it without a lot of evidence on what structure is best to evolve to. In our experience, the most successful organizations have navigated this change by… 1) discussing, clarifying and documenting organizational and individual goals, 2) managers holding frequent 1-to-1 meetings to discuss goal progress (quarterly at a minimum), and 3) recording and posting goal progress notes. Feeding this data into the annual review helps it to become more of a a pre-written summary for the year, as well as a final assessment of goal achievement. The process concludes with goal setting for the next year.
It’s important that whatever assessment organizations migrate to includes both the “what” was accomplished, and the “how.” You may have a rock-star sales person who exceeds quota, but nobody can get along with him. These development opportunities should not wait for a year-end conversation.
One of the key behaviors of the most effective leaders is their skill at effective confrontation. People are attracted to organizational cultures where direct, authentic forms of communication are artfully coupled with high levels of trust and value of others. A best practice of performance feedback is to embody this on a regular basis. This is not a top-down approach, but one that is a “two-way street” between managers and employees. The question becomes not only how can you achieve higher performance as my employee, but also how can I support you better as your manager?
John Townsend is thought leader in the area of confrontation. He has developed 8-steps to effective confrontation listed below. This excerpt is from “Creating a Culture of Growth through Effective Confrontation.”
1) Let them know I am “for” them
2) State the problem
3) Own my part
4) Hear their side. Deal with diversion (e.g. “Let me get back to…”)
5) Request specifically what I want. (Be hard on the issue and soft on the person)
6) Give consequences, if needed
7) Reiterate that I am “for” them
8) Check back in with them within 24 hours
Avoiding confrontation means we compromise what is really important. Applying these eight simple steps on a regular basis in the workplace will lead to improved performance and engagement.
How many times have you heard people say “I hate my job.” What is it that they hate? Their manager, the company, the lack of vision? Maybe it’s that they are engaged in activity every day that is not in their area of skill or passion. There are any number of reasons why people hate their jobs. There are just as many reasons why people stay in jobs that they hate. What can we do about this pandemic?
One of the things I like about my job as a leader and a consultant is that I get to ask lots of questions.
Have you asked employees in your organization how much they like their jobs? One of our often overlooked responsibilities as leaders is to ensure we are deploying adequate resources to achieve our organization’s vision. This includes both monetary resources and human capital resources. Do we have the right people working in the right positions? Do they think of their work as a job or as a calling?
Martin Seligman wrote in his book “Authentic Happiness” about a custodian he met when visiting a hospital. The custodian was changing the pictures on the wall of a patient who was in a coma. Martin asked the custodian why he was doing this and his reply was “My job? I’m an orderly on this floor,” he answered. “But I bring in new prints and photos every week. You see, I’m responsible for the health of all these patients. Take Mr. Miller here. He hasn’t woken up since they brought him in, but when he does, I want to make sure he sees beautiful things right away.”
Did this custodian believe he was in a job, or had a calling? Clearly he had a calling, which was to help heal patients. A job and a calling are vastly different. Our calling as leaders is to help our employees live out their calling at work. There are three things which can help make this happen.
Vision: Do you know where your organization is going? As a leader, you may know it in your head, but if we asked all employees to write it down would they come up with the same answer? If not, get help from a skilled strategic planner. (GoalSpan can help you here). If you have a clear and compelling vision, do you communicate it fervently and with consistency?
Alignment: Does your budget reflect your organization’s will to achieve its vision? Often, we say we want to do things but we do not devote the time, talent and treasure to achieving them. Do you have the right people with the right competency in the right positions? Are you taking inventory of this periodically and making tough decisions to realign when necessary?
Resources: Ask each employee if they understand how important their job is in the company. E.g. delivery drivers are not just driving trucks, they are “delivering happiness with each order.” Call-center associates have an opportunity to “make each customer’s day a little brighter than it was before they called.”
These practices are pretty simple but the challenge is they are not easy to implement. They require a level of intentionality and “proactiveness” that is scarce today. If you are fully committed, however and you apply these practices correctly and consistently, they will result in higher levels of engagement, morale, purpose and ultimately operating income. Small change always yields big results.
The late, great Peter Drucker once said "Only three things happen naturally in organizations: friction, confusion and underperformance. Everything else requires leadership."
Another way of saying this is that when things are left alone in organizations they typically don't go well. This is true with both planning and execution. Recently we conducted a webinar on reengineering performance management. In this webinar we took a poll and participants were asked if they would like more performance feedback in their jobs. A resounding 92% said yes. What does this say about the state of engagement in the organizations we work for today? The answer is pretty clear.
It is not just our brief research that indicates this though. Google's Oxygen project found that the number one thing that makes a good manager is "Be a good coach". Employees want managers to provide specific feedback and have regular one-on-one meetings with them. More of a stats person? 72% said they thought their performance would improve if their managers would provide corrective feedback.
There is a key point to keep in mind with this. Not only does feedback promote growth, but also when there is no feedback, employees are cut off from the resources they need to make progress and are negatively impacted. Four out of ten employees are actively disengaged when they don't receive feedback. Not convinced that this will benefit your bottom line? 69% of employees said they would work harder if they knew they were valued as workers and that their efforts were better recognized. Not only are people more productive, but your organization itself becomes healthier, with 14.9% lower turnover rates when regular feedback is provided.
Fortunately, doing all of this isn’t that hard and doesn’t require much inventive creativity. There are a couple important points about providing feedback, some of which are quantitative, and some qualitative.
That last point is dual facing. Setting action plans is key for your employees, but having an action plan for your feedback is just as important. Doing a performance review should never be a goal. In fact, as odd as it may sound, you need to check in about whether or not the feedback you are giving is building towards your company’s goals. If your feedback isn’t, then you are missing out on an opportunity to have an efficient, effective, thriving community and organization.
Let’s take a moment to loop back to the idea that organizational citizenship increases in the presence of feedback. Managers who focus on employees' strength and skills receive back many times what they put in. In fact, employees are 30 times more likely to be actively engaged at work.
Take a moment to dream. Your company is rolling out a new website. It is 3 days until it is supposed to go live, and the homepage isn’t even finished.
In the words of former Campbell’s Soup CEO, Doug Conant, “To win in the marketplace you must first win in the workplace.”
Feedback cannot be looked at as an opportunity for optimization, but rather as one of the most important competitive weapons in your company’s arsenal.