Some 20 HR professionals gathered on the morning of March 22 to discuss Performance Management on Trial; an intimate Forum led by People and Strategy editor Anna Tavis. Participants ranged from senior executives in the corporate world to leaders in smaller entrepreneurial environments to those currently consulting to both of these businesses structures.
Are today’s performance evaluations enhancing both the employee experience and the business results?
As the group discussed today’s business environment and the current work being piloted by industry leaders such as Deloitte and Adobe, consensus was that the key question is not “Should we keep the performance management system”? Rather the first question today is “How does the performance management systems tie to the needs of the business and how does individual performance get measured at the business dashboard level?
The rise in collaborative teams used in the technology and service driven industries is a strong factor in this shift in focus, further ignited by social media, economic dynamics and the new cultural norms of conducting business. HR teams must be ready to support the business leaders with tools that can be readily created, piloted and adjusted. Cookie cutter, off the shelf solutions, have gone by the way of the manual typewriter!
Hence today’s pioneering programs are designed to maximize the feedback that will motivate individuals to achieve their personal best within the organizational focus. The science behind motivational behavior is playing a large role in today’s strategies. Designers are further doing everything possible to minimize the rater bias which historically played a negative role in the evaluation process.
What are the critical success factors emerging from today piloting PM systems?
Three of the key points that emerged from our pre-reads and our Forum dialogue depend on how you answer these questions:
- How do you ensure a direct link between business objectives and individual contributions?
- Is it possible to eliminate the inherent bias in the PM process?
- What are the key success factors to allowing performance feedback to be continuous, collaborative and transparent?
Deloitte is piloting a program that addresses these objectives with a four-question performance snapshot *1. The snapshot looks to uncover how best to utilize the individual moving forward as opposed to a snapshot of the individuals’ past performance. Conceptually, Deloitte asks the leader to consider:
- If it were my money, would I award this person the highest possible compensation increase and bonus?
- Given what I know of this person’s performance, would I always want them on my team?
- Is this person at risk for low performance (potentially jeopardizing service delivery?)
- Is this person ready for a promotion today?
The Deloitte pilot is providing thoughtful input for the industry and impressive results for their own business.
Other organizations are considering rating-less systems while others are striving to create programs that recognize the necessary agility and forward thinking behaviors demanded from today’s top leaders. The group agreed that the annual rating system developed by GE in years gone by, is indeed a program that is no longer relevant. The business is demanding real time feedback loops that provide coaching; the cookie cutter solution no longer works. The business needs and cultural norms demand customization and personalization; an approach that is surely in keeping with the way we manage every other part of our lives from shopping to investments to healthcare.
Where are we going?
As Anna Tavis summarized, we are living in a new reality. To be effective we need to start outside the box. Even if we have a roadmap to manage change and we follow the process to a successful end, we need to be prepared for disruptions anywhere along the way. Ask yourself, “What is the new reality?” More importantly, “What is your organization’s new reality?”
When once we sought to replicate the GE methodology, it is no longer the gold standard for management and leadership. Rather GE has become a fast, lean machine that tries something and tests it on the go. The new organization seeks to be agile and follows scrum and sprints (not waterfalls) as teams adjust their strategy in the middle of implementation.
Is your organization becoming a federation of businesses when once it was a hierarchy? As businesses customize products and services for their customers, they become uniquely different from the other businesses in their organization. When the variations become significant, and the hierarchy doesn’t work to improve performance, performance management evaluations need to be changed to meet new requirements. Such new requirements may be providing real-time performance data for individuals who come on and off multiple teams during the year, goals that change quarterly, work that gets done horizontally and evolving technology that takes new competencies to master and requires real-time feedback to learn.
In addition to these changing models in the business world, the new reality is taking place amongst the military units stationed in Afghanistan. The old military model of handing off knowledge of new territories, cultural nuances and local game plans no longer work. The new reality is guerrilla warfare where one unit hands off intelligence to the next while on the run.
Change management roadmaps are helpful in keeping organizations up to date with the shifting economy…. But be prepared for disruptions and agile shifts or you will miss the market, the financial opportunity, or the customer’s needs.
*1 Harvard Business Review. April 2015. Reinventing Performance Management. Ashley Goodall