5 Ways to Humanise Performance Management: A Practical Guide for Modern Workplaces

Performance management has come a long way from the days of rigid rating scales and annual reviews. The pandemic accelerated this evolution, pushing us towards a more human-centric approach. But as we continue to evolve beyond those challenging times, it’s crucial to avoid slipping back into outdated practices. In this edition, we’ll explore five key opportunities to humanise performance management, offering practical insights to create a more engaging and effective workplace.

The Evolution of Performance Management

From Transactional to Conversational

Let’s face it: traditional performance management was largely transactional. Remember the dreaded rating scales and annual reviews? Those days are behind us. Over the past decade, we’ve seen a significant shift towards ongoing, conversational approaches. The pandemic further accelerated this transformation, with organisations focusing more on appreciation rather than mere assessment. Embracing digital platforms became essential, embedding these practices into organisational culture and moving away from rigid, bureaucratic systems.

HR in a More Human World

Progressive business leaders now prioritise employee well-being because it’s the right thing to do, not just a strategy for business success. This shift has been in the making for the past 20 to 30 years, transforming our view of employees from mere production factors to central components of competitive success. The focus on employee experience and fulfilment has grown, with leaders treating employees as true end customers. HR processes, including performance management, must align with business needs and support employees in achieving their personal and professional goals.

Five Opportunities for More Human Performance Management

Opportunity One: People-Centric Performance Management

Humanising performance management starts with prioritising people over bureaucracy. The system should support individuals in improving their performance, making the process lighter, less formal, and more technologically enabled. Here’s how you can achieve this:

1. Flexible Timing: Allow employees to initiate performance discussions and request feedback whenever it makes sense to them, rather than adhering to a fixed schedule.
2. Personalised Approaches: Provide a basic performance management framework with options for further development, career planning, mentoring, and coaching. Support should be offered without forcing it upon employees, ensuring it remains valuable and appreciated.
3. Manager Choice: Allow employees to choose their managers, especially in project-based teams, ensuring they have a supportive and competent mentor.
4. Self-Set Objectives: Encourage employees to set their own performance objectives, fostering ownership and motivation. This approach leverages employees' insights into their roles and drives impactful improvements.

Inclusivity is key in a people-centric approach. Performance management systems should resonate with diverse demographics and personality traits. Co-developing the methodology with employees supports inclusivity and effectiveness, ensuring the system reflects the needs of all employees.

Questions for People-Centric Performance Conversations:

• What is your life purpose?
• Why, besides money, do you do your job?
• What objectives would help both your business and support you in achieving your goals?

Opportunity Two: Socially Based Performance Management

Humanised performance management must be socially based, embedding regular team conversations into the process. This approach recognises the importance of team performance and fosters collaboration. Key strategies include:

1. Horizontal Objectives: Encourage objectives that support team members and cross-functional collaboration, reducing silos and enhancing organisational effectiveness.
2. Team-Level Objectives: Implement approaches like Objectives and Key Results (OKRs) at the team level, allowing flexibility in managing and improving team performance.
3. Multisource Feedback: Ensure feedback comes from multiple sources, reflecting diverse performance aspects and anchoring performance management within the organisational culture.
4. Team Performance Reflection: Facilitate ongoing team reflections to establish a better understanding of individual contributions and identify improvement opportunities.

Questions for Socially Based Performance Conversations:

• If nobody in your team had individual goals, what team goals would be needed?
• What goals could you contribute towards as part of your team?
• What other goals are required for effective performance, such as cross-team cooperation?

Opportunity Three: Organisationally Tailored Performance Management

One size doesn’t fit all in performance management. Tailoring approaches to fit organisational specifics ensures optimal business impact and employee resonance. Here’s how to achieve this:

1. Context-Specific Strategies: Develop performance management approaches that align with your organisation’s sector, size, history, strategy, and workforce.
2. Reflecting Values and Culture: Ensure performance management systems demonstrate your organisation's values, behaviours, and culture.
3. Flexible Implementation: Apply general strategies appropriately, choosing whether to use SMART objectives, OKRs, or other approaches based on your organisational context.

Questions for Organisationally Tailored Performance Conversations:

• What objectives do you have for your performance management system?
• What principles should guide performance management in achieving these objectives?
• What requirements do your people have for your performance management approach?

Opportunity Four: Development-Orientated Performance Management

Shifting the focus from assessment to development empowers growth and progression. A development-oriented approach fosters a growth mindset, encouraging ongoing improvement. Key strategies include:

1. Growth Mindset: Emphasise a growth mindset, seeing everyone as capable of improvement.
2. Reskilling and Upskilling: Focus on reskilling and upskilling to meet evolving business needs and technological advancements.
3. Development Objectives: Prioritise development objectives alongside performance goals, ensuring future performance is as much about ongoing development as current achievements.

Questions for Development-Orientated Performance Conversations:

• What skills would help you deliver more value to achieve your goals and those of your business unit?
• For whom might these skills be developed or enhanced?
• Is this action currently identified within your performance development plan?

Opportunity Five: Breakthrough Enabling Performance Management

In a rapidly changing and complex business environment, human-centric performance management enables innovation. Moving past incremental improvement and empowering employees to set their own objectives fosters creativity and autonomy. Key strategies include:

1. Stretch Goals: Encourage employees to set ambitious goals, pushing beyond bounded objectives and OKRs.
2. Leveraging Strengths: Enable employees to use their strengths to drive innovation and business transformation.
3. Dream Big: Encourage employees to envision what they could achieve in an exceptional year, inspiring them to strive for these goals.

Questions for Breakthrough-Enabling Performance Conversations:

• What strengths do you have that could be better leveraged within our organisation?
• What would you be doing differently if you were using these strengths?
• How do competitors approach similar work?
• What role could technology play in transforming your performance?

Conclusion: Embracing Human-Centric Performance Management

To truly humanise performance management, we must prioritise people’s needs, align with business strategies, and embrace supportive technologies. Engaging the entire workforce in developing and refining these systems ensures they reflect our collective goals and values. By following these steps, organisations can create meaningful work experiences, unleash workforce potential, and drive business success.

Are you seeking guidance on building inclusive workplace cultures, compliance, organisational development, performance management, or employee engagement?

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References and Further Reading:

1. Dalio, R. (2017). Principles: Life and Work. Simon and Schuster. Principles: Life and Work on Simon & Schuster. Available on Amazon.
2. Gartner (2020). 3 Ways to Improve Performance Management Conversations.
3. Hamel, G., & Zanini, M. (2020). Humanocracy: Creating Organizations as Amazing as the People Inside Them. Harvard Business Review Press. Humanocracy on Harvard Business Review Press
4. Johnson, W. (2022). Smart Growth: How to Grow Your People to Grow Your Company. Harvard Business Review Press. Smart Growth on Harvard Business Review Press