This month we will analyse how the performance management landscape is changing through the use of a number of new and innovative methods.

Why the change?

The topic of “Performance Management” is one that we can all struggle with but the reality is that it’s an essential component for developing an agile business that can survive and thrive in today’s harsh economic climate. As both the world of work and the employee experience and expectations modernise and develop, it is essential that companies begin to critically evaluate their ability to induce the optimum circumstances for productive, collaborative working- and it’s not an easy feat. Ask yourself, how many employees within your business are passionate about your appraisals process?

Performance Management will forever remain a key component in ensuring business success. However, in many instances, over time it has become little more than a bureaucratic burden, offering little in the way of value or opportunities for developing and improving your employee’s performance.

Many of the most cutting-edge, industry leading companies provide us with the evidence to prove that an overhaul of traditional techniques can promise results of continued success in performance management. There has been an abundance of evidence to suggest that the old and traditional methods of performance management have become stale and outdated in helping to motivate employees to strive towards improved performance.

What does the modern employee want from their employer?  They want to be truly invested in, to engage more, avail of regular feedback, open dialogue and be a part of continuous learning curve. These are goals that the old methods of appraisal struggle to facilitate, rendering them fundamentally unfit for purpose.

This article takes a closer look at how performance management is changing; the emerging trends and benefits of new systems and what challenges may be faced to adopt these systems.

What changes are taking place within performance management?

1) Striving towards a more agile workplace

Whilst it may be difficult to ascertain what this truly means, adopting a more agile workplace is of crucial importance in implementing a successful change in the performance management paradigm. There are numerous success stories that exemplify what a more agile workplace could entail.

The process of goal setting is a key area in which changes are being made. Previously, goals and objectives were being set too infrequently and were often too rigid. Now, growing trends are seeing a movement towards a more dynamic goal setting process. They will be set and assessed more frequently than before, when it was common for them to be set solely as yearly targets. This means they can be adjusted more readily and easily in response to changes in business objectives.

These goals will be more transparent and team focused than before. Advocates of more agile approaches to performance management are in collective agreement that a key downfall of poorly executed goal setting is the missing essential interlinks between individual goals and those of the team. Now the focus has shifted towards how individual goals impact upon those of the team.

What are the benefits of the Agile workplace?

New approaches are more flexible and forward thinking than previous systems. Business goals may be adjusted and through using a more dynamic, fluid approach, individual goals can be re-tailored easily and effectively. In turn, this generates a more streamlined relationship between individual, team and company goals- maximising business performance.

A further benefit lies with team inter-connectivity, which is promoted; enhancing both workplace trust and understanding of the individual’s link to team success and overall employee engagement.

2) Why you should say goodbye to the year-end appraisal system

The key component to note in the area of appraisals is the shift away from a year-end quantitative rating system to more informal, ‘real-time’ discussions. Scientific research indicates that the use of a rating system can induce fear and apprehension for the employee responses which will decrease motivation and productivity.

With 43% of highly engaged employees receiving feedback at least once a week it can be seen that this movement towards promoting regular discussions and feedback between manager and employee is working. This removes the generally unpopular year-end appraisal process and allows for qualitative feedback to be given in real time, thereby enabling the employee to adopt a continuous learning and development curve.

What are the benefits of Real-time Feedback?

Research in neuroscience has told us that the pursuit of a goal is a greater motivator than that of goal achievement. Instead of being told at the end of the year that they have or haven’t achieved their goal, the employee will take part in continuous interaction and feedback which will increase motivation and engagement.

The regular feedback given to employees will help enable them to identify through increased self-awareness how their own performance can be improved. This approach is much more effective than delivering an end of year appraisal that does little to motivate the employee or adjust performance defects.

3) Improving communication between manager and employee

Research has indicated that 65% of employees said they wanted more feedback and 98% will fail to be engaged if they are given little or no feedback. These are statistics that should not be ignored.  It is from this research that we have seen a movement away from the one-way flow of evaluation and appraisal towards adopting a more reciprocal approach, allowing for increased communication within the relationship.

Previously, the role of the manager in performance management was simply to monitor and evaluate employee performance in relation to their overall annual objectives. As performance management changes so must the role of the manager. They should now be expected to act as an employee coach, ensuring that quality feedback is delivered effectively.  Another popular method that has increasingly been adopted by companies is that of asking employees to evaluate their managers on how well the feedback has been delivered.

So, what are the benefits of this increased communication?

Regular check-ins will allow key information to be passed to the employee with greater ease. There tends to be a negative connotation surrounding the type of feedback issued under the old performance management systems. These regular check-ins and discussions mean that the feedback given will be more constructive than judging in nature. Many companies have noted that giving the employee more of a voice in these discussions has made them feel more involved and increased overall motivation.

4) Use technology to simplify the process

The use of technology under the old systems of performance management was often laborious and resulted in a backlog of inaccessible and complex data.  In recent years there has been a move towards a more streamlined and user-friendly approach to the use of technology which allows easier access to the information deemed useful.

Using simple and accessible technology tools can be of great use in facilitating a smooth and effective performance management system, especially for ‘real-time’ performance management systems. Many companies have adopted the use of performance applications which allow a number of key processes to be carried out online. This allows employees easy access to elements such as team goals and objectives, individual progress reports and feedback.

So, what are the benefits of using an effective PM solution?

The use of technology ensures all feedback, updated goals and progress can be accessed quickly and effortlessly. This is much more effective than time-consuming face to face meetings. Taking the time to implement the necessary technology has been proven to reap dividends in helping facilitate all aspects of what performance management is now striving to be, a dynamic and agile process that provides real-time feedback to promote continuous development.

5) Use the data

If you ensure that there is more regular feedback, discussions and evaluations taking place, there will be much more data for you to use to your advantage. The aforementioned technology tools can provide a ready-made source of data with which to evaluate both employee and manager performance.

More readily available information means better and more reliable data with which to assess performance. One method which has been widely adopted, in order to provide more, is that of peer assessment. This has been shown to provide a better rounded and true assessment of an employee’s performance; therefore providing more useful data than if it was just one manager making the assessment.

So, what are the benefits of data analysis?

The use and extrapolation of data can make the identification of high or low performance trends much easier and less time-consuming, in turn increasing the effectiveness of performance-related decisions such as promotions and making performance improvement issues easier to identify.

Adopting a PM system which is used in real time gives the manager a powerful tool to carry out this type of analysis in real time also reduces the administrative burden on the organisation and on the individuals.

What challenges may be faced in implementing these changes?

Whilst changing the process of performance management within an organisation sounds simple in theory, the reality is that it can be very difficult in practice. Change in organisational culture will not take place overnight and you should be aware that it will require patience and persistence.

Part of the reason it can be so difficult to make the necessary changes is that there is no definitive blueprint to follow. Each business is different and changes should only be made in those areas that it makes sense for your business to change. No company should innovate for innovation's sake.

Companies who have implemented changes have reported that one of the more difficult aspects to deal with is the changing role of the manager. As previously mentioned, the manager is required to act as a mentor for his employees. It is, therefore, key to the overall success of performance management that this role is carried out effectively. This means it is of vital importance that managers be given adequate training and support for making this transition. Without this, they may not be able to deliver feedback to the required standard and the objectives of the process will not be realised.

There can also be initial friction in requiring an employee to evaluate a manager. Other companies who have implemented this procedure have noted that in its infancy stages it is likely that there will be an initial discomfort on behalf of the employee.  Therefore, the intended results of this process may not come to fruition until it has been implemented for some time and so become the norm.

Would you like to know more?

Think People’s half-day workshop on June 23rd 2017 will explore the elements surrounding performance management and will look at the latest new trends, thinking and neuroscience in detail.  To book your place, contact our office on 028 90 310450, or email seminars@thinkpeople.co.uk