Disrupting the Conversation about Performance

Despite the fact that millions of words have been written and spoken about performance evaluation and performance management by consultants, academics and others, it remains a major system in human resource management (HRM) that is consistently, 'unfit for purpose'. This is often, partly, if not mainly, to do with the fact that most organizational systems of performance management do not have a clearly defined purpose in the first place. But it is also to do with the obsession with the 'management' of performance. Our research at Curtin Business School indicates that COVID-19 has stimulated organizations to think anew about 'performance'. Here I offer some points of discussion as to where this thinking might go.

1. Change the bloody name!

The language used to describe something can make a big difference in how it is perceived. This point is important, but I will return to this at the end of the article because I hope that what I write between then and now will make that point clear. For the moment it is enough to note that calling something a 'performance appraisal' or a system 'performance management' emphasizes that someone (the boss) will judge someone else's performance and, this is the basis of that individual being managed. Not a particularly collaborative process with all kinds of inbuilt bias and subjectivity. My advice is to ditch these names and join the 21st century

2. Purpose

Whatever system we have in place and, whatever we call it, needs to have a reason to exist, a raison d'etre. In the past, the good old performance appraisal had two: to judge performance and to develop an individual. This, in itself, was too complex, but in recent years we have suddenly included 'behavioural competencies' and 'conforming with values'. None of this is helpful. Judging whether an individual has developed behavioural competencies or has conformed to values is never objective. Most of us are doomed to failure unless the boss likes us and/or we are a fawning sycophant. So, the purpose of the yet to be named system must be simple, other processes will take up the behavioural and values issues if they are relevant. This purpose should not be goals or objectives, or behaviours or conformity to values, but value creation - does this person, performing this role, create value for the organization and, what is it?

3. Detach rewards from evaluations

It is well established that two factors contribute significantly to employee commitment and engagement - fairness and trust. Employees want to know that they can trust their bosses to apply distributive and procedural fairness. A performance appraisal/management process needs to be simple to understand and needs to be an approach that is perceived as fair. The issue of fairness though, only becomes an issue if rewards and penalties are attached to an evaluation. This is a further issue of evaluation. It is very difficult to create a conventional performance evaluation system with in-built fairness. Yes, we all know about procedural and distributive justice, but can we really count on them operating? If rewards are detached from the ‘performance issue’ a more sophisticated approach to performance could be adopted. This sophisticated approach would not be about outcomes but inputs.

4. Subjectivity

Don't get me started on this......but, anyway, evaluating behaviours and values is subjective. If they are not constructed through collaboration they simply represent the wishes (wishlist) of those at the top. However, behaviours and values can be a source of discussion rather than measurement. They should be detached from the issue of performance and, attached to the issue of the employee experience (Ex). Now, the Ex is a much more important element in performance than its appraisal and management. This is because it concerns the drivers of performance, not the management of it.

5. Developing people

Conventional PM focuses on developing weaknesses. However, people perform better when they play to their strengths. Should we deal with weaknesses or utilize strengths? What if our approach to performance was more positive and, highlighted the further development of strengths and built roles and work design around these to create value? Conversations would be more positive, more engaged and more relevant. In addition, enabling individuals to use and develop their strengths enhances the potential for innovation and innovative ideas in the way work is done and value created. At the moment we tell people how bad they are (sensitively) and tell them to 'develop'. The reason why evaluation of performance and development were seen as the two sides of performance appraisal was because they were considered two sides of the same coin. They are not. Development and strengths building are inputs to performance, they are not outcomes of a performance evaluation.

6. Connecting the dots

Conventional performance management emphasizes the importance of connecting performance evaluation to rewards, as well as recruitment, development and so on. This assumes, first of all, that we have a system, process and framework that can accurately determine the level of performance, so it is, therefore, clear who we should recruitment, how they should be developed and how this should be connected to rewards. In terms of a career path, organizational opportunities are not limitless and, therefore, it is important to be transparent about what is possible, for example, in terms of promotion. Giving financial rewards related to an assessment of performance is also fraught with difficulties. For example, very rarely will there be any consideration of the actual value of above average performance to the organization. It is often a tick-box exercise with little conversational depth or prolonged application.

 It might be better to detach performance evaluation from tangible rewards by focusing on what drives performance and, an individual’s overall experience of work. While role banding and remuneration is a fundamentally bureaucratic exercise it can serve the purpose of creating a perception of fairness. If a business is performing well overall, as reflected in its profits etc, everyone gets a salary increase. However, it is also important and fairer, not to focus on poor performers in and of themselves, before focusing on the inputs that drive performance. If the inputs that drive performance are at the centre of a performance process approach the overall level of performance should be enhanced. 

7. Transparency

As long as there are subjective elements in a performance process and, the connectedness to outcomes is unclear, transparency will be an issue. Subjective evaluations are difficult to justify, of course, precisely because they are subjective. This issue has a high degree of significance and sensitivity because the evaluations are often tied to rewards. Bureaucratic banding is transparent and can be detached from performance at an individual level. Transparency can then be built into conversations around the drivers of performance, which are de-sensitized and focus on performance itself rather than its association with rewards. This might be a scary prospect for many, but bureaucracy often has a purpose and, it is not communism. Nobody acts alone.

8. Expectations

In order for leaders, managers and staff members to meet ‘expectations’ it is important to know how expectations have been set and what the purpose is of achieving them. For example, if someone has been set expectations about behaving according to values, how is that behaviour to be specifically defined and, what is the value created for the organization by people behaving in that way?

Behaviours are probably better seen as inputs and, should be evaluated for their clarity and consistency. It is generally not helpful to reward people simply for behaviour or for reflecting ‘behavioural competencies’. It needs to be clear what the expected outcomes are of behaving in a certain way(s).

Expectations about performance should be related to performance drivers. And, also, to the question - what value is an employee expected to create through undertaking their job and role? In turn, how does that connect with the value that teams are expected to create and, the organization as a whole, in-line with strategic value creation? Expectations that are established are best an outcome of conversations between manager and staff member. In short, they are jointly agreed. This builds transparency, fairness and trust.

9. The Employee Experience

The ‘life’ of an employee within an organization should be one of continuous performance improvement. This is not a new concept, but needs to be applied in new ways through how work is designed, value created, constant feedback, curated micro-learning, customized support and building on strengths. This is achieved through continuous conversations, including an ‘internal conversation’ that leaders, managers and staff have with themselves. Conversations are often the foundation for innovation about how work is done and what a business should do. The more conversations we have the more creativity flows and innovation happens. If staff have a positive employee experience they will be more committed and engaged. Continuous conversations and feedback opportunities are critical aspects of this.

10. Focus on Performance Drivers NOT Performance Management

Performance is driven, not managed. Focus on these issues:

• Ensure that what people do creates identifiable value.
• Ensure work is stimulating, challenging, uses an individual's strengths, has a social element and does not create stress.
• Ensure teams have a clear purpose and create value.
• Collect feedback constantly about the employee experience.
• Create micro-learning opportunities.
• Give individualized support.
• Have continuous conversations
• Build on strengths.
• Co-create values.

Summary

It is time to have employee experience conversations and see performance as something driven by inputs, not the subjective whims of managers. For organizations:

1. Detach rewards from evaluations.
2. Have conversations, don't make judgements.
3. Co-create don't dominate.
4. Performance is driven (from the inside) not managed (from the outside).
5. Build people up, don't tear them down.
6. Sometimes we can celebrate the value of bureaucracy.
7. Focus on value creation NOT goal-setting.
8. Change the bloody name! Employee experience conversation NOT performance review/evaluation/appraisal.