Before you trade in your Performance Management System for the latest model, answer 2 questions first!

The Case for Change

A disruptive world and a millennial workforce are demanding a revamp of the Performance Management System (PMS). From having formal feedback twice a year to getting real-time feedback; from focusing on appraisals to zeroing in on development; and from assessment by a manager to inputs from multiple sources.

There are several reasons why change is necessary. 

1.Current PMS typically are focused on improving the past, not brightening the future. In a disruptive world having goals for more efficient results is a great way to go out of business in a handful of years.

2. Chasing after performance means you are not rewarding people who innovate. The path to innovation is littered with failures and a long gestation period present another formidable hurdle for getting rewarded.

3. Your workforce wants feedback when they need it so they can make real-time improvement and achieve positive outcomes.

4. Too much energy is used on complying with the PMS and not enough on actually helping people grow and perform better.

Ready for Change?

Trailblazing companies like GE, Microsoft and Accenture have removed performance ratings, added horizontal and vertical feedback and ask employees to focus on development rather than appraisal. And it is paying off - they profit from improvements in employee engagement, time to market, and speed of innovation.

But many companies are still hanging onto the older system because they don't know what to replace it with or how.

Replacing PMS is more than simplifying and refocusing the system. It is about creating a habit of giving and getting feedback that pin-point things people did, at just-in-time speed, so they can improve and get a better outcome. And it's also about coaching and following up to ensure improvements stick over time and lift employees to the next level.

Doing this requires more than training. Managers must want to give feedback, and employees must want to do something with it. That's a big culture change and requires sustained leadership commitment.

And even if the company invest in training and people start doing it, everything gets shut down if there is no trust between manager-employee.

Think about it. The typical PMS is designed on the implicit assumption that left to own devices managers and employees will not give or do anything with the feedback. That's why PMS require users to document the feedback, indicate deadlines for action, then key in what happens next ... Gosh- that's a lot of work just to keep the system happy.

If there is trust, none of this copious amount of bureaucracy would be necessary.

Before you Change PMS Answer Two Questions

So before you trade-in your current PMS, ask 2 questions -

1. What is the new Process? 

2. And are People -managers and employees - able and willing to embrace the 'new' way? 

I want PMS 2.0 yesterday. But we must get both the Ps right first - Process and People. No point having a shiny new car with a powerful turbo engine but missing the steering wheel.