4 Actions for successful Performance Management

The 4 actions found in successful approaches to performance

We consulted academic literature, industry research, and good practice in Organisational Psychology to determine what the most important factors are.

Ultimately, we identified four factors that are found in successful approaches to performance:

1.   Fairness, transparency, and accuracy

2.   Goal alignment and tracking

3.   Developmental coaching and feedback

4.   Accountability and recognition

1. Fairness, transparency, and accuracy

It’s a common misconception that employees’ opinions about performance reviews are strictly based on whether or not they get the raise or promotion (i.e., the outcomes) they wanted. To the contrary, researchers have consistently found that the two most important factors relate to the process itself and how employees are treated.

Research on Organizational Justice gives us a better understanding of what drives employees’ perceptions of fairness and value, and how these influence employee attitudes and behaviors at work. Originally introduced by Dr. Jerald Greenberg in the 1980’s, Organisational Justice works beautifully as a scientific model for “high stakes” processes like performance management and consists of 3 key factors:

1.   Process

o  Were decision-making rules clear and consistent?

o  Were potential biases acknowledged and minimized?

o  Did I have an opportunity to voice my input?

2.   Interactions

o  Was I treated with respect and compassion?

o  Was I informed on how the process works?

3.   Outcomes

o  Did I get what I want?

o  Was it appropriate and equitable?

We’re not suggesting outcomes are not important, but rather, that bonuses, raises, and promotions aren’t necessarily the path to a performance system your people will appreciate and embrace.

2. Goal alignment and tracking

Understanding how your organization’s goals line up with the day-to-day work of individuals and the teams they are members of is a key component of creating a motivating approach to performance. One of the most robust findings in Social and Organizational psychology is that people who set goals outperform those that do not.

Organizations like Google, The Gates Foundation, and Intel all give credit to simple goal setting techniques as being fundamental to their exceptional achievements. Driving company goals is often cited as a reason for even having a performance management system to begin with.

We’re not suggesting that goals are the only element necessary to drive motivation or that motivation is the only thing necessary for high performance. However, aligning and tracking goals will go a long way to ensuring continued success for your organization. Plus, your employees will appreciate seeing the connection between their work and your larger strategy and purpose.

3. Developmental coaching and feedback

Research has shown that high-performing organizations view enabling employees to do their best work as the true purpose and objective of performance management. When this is done well, organizations see a 23% increase in company-wide satisfaction with their performance management processes. It’s for this reason that many organizations are rebranding performance management as “performance development.”

In the past, the role of managers was to be a “boss” or a “command and control” style of leader. This style clashes with today’s modern workforce and has been replaced by the manager-as-a-coach or manager-as-a-mentor model. In fact, research from the analytics firm Gartner, found that employees who report to managers who are good coaches are 40% more engaged and demonstrate 38% more discretionary effort at work.

However, developmental coaching and feedback should be a frequent, expected part of conversations – not just between managers and direct reports but also between peers and other leaders. In a 2018 study by the Institute for Corporate Productivity, researchers explored data from 234 organizations to better understand which performance management practices drive business impact. They found that creating a culture of feedback was the most critical driver of positive organizational and financial outcomes.

When people see others asking for and providing feedback, learning and growth become the norm rather than the exception.

4. Accountability and recognition

Even though the trend has been for performance management approaches to be less focused on accountability and recognition, that doesn’t mean they are no longer important. In the high-stakes world of performance, accountability and recognition are just as important as they ever were.

In 2018 Culture Amp helped companies ask over 850,000 employees: “When it’s clear that someone at your organization is not delivering in their role, do people at your company do something about it?”

Only 45% of employees agreed or strongly agreed with that question. That means more than half of the employees surveyed on our platform feel uncertain—or worse—about how performance issues are handled within their organizations. Meanwhile, recognition is frequently cited as a key driver for motivation in a number of engagement surveys and is likely to be impacted by different approaches to performance.

After all, what is a performance management system doing if it’s not holding people accountable when they need help and recognizing great work when they’ve exceeded their expectations?

At the end of the day:

Overall, creating a performance management system that people like is the key to creating a high-performing culture. It’s a move toward an ongoing, iterative cycle of:

1.   Aligning goals and expectations

2.   Providing developmental coaching and feedback along the way

3.   Giving people recognition when they knock it out of the park (or redirection when they need more help)

4.   A fair, transparent, and accurate process – which is at the centre of all of this

In the past, approaches to performance-focused only on looking backward, but the future of performance emphasizes developing future success.

While old-school approaches favor command and control leadership, the next generation aligns goals but ensures people maintain their autonomy in the process.

In the past, managers got to unilaterally determine people’s fate, but leaders are now empowering feedback from peers and others in order to help identify “brilliant jerks” that “kiss up” to their managers and kick everyone else around.

Rather than just having a once a year process, organizations are enabling continuous, semi-annual, or quarterly options.

In the future, the path to high performance isn’t kept a secret. Instead, it’s part of a system that is clear and fair to everyone.

If you would like to assess the health of your company’s approach to performance check out our guide to cost effective tailored performance management – contact me to learn more.

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