Does 'Performance Management' improve performance?

Most companies spend a lot of money on performance management; putting in expensive systems, training staff and leaders, spending hours in annual performance reviews and calibrations and then doing it all again by cascading the company goals.

You might be surprised to know that there is no strong evidence to suggest any of this makes a difference to performance and even data to show that many companies performance has reduced, yet when you look at the employee performance reviews they continue to show the normal distribution, so what should we do?

A number of years ago while I was at Mars I would get to the annual performance reviews and be dreading it.?It would take up a lot of time preparing and filling in forms and then you would have the conversation and many times the person would walk away feeling devalued as they thought they were ‘above expectations’ and you said they were ‘meets expectations.’?You could argue all you like that ‘meets expectations’ is actually meets most areas and exceeds in some, the person still walked away feeling ‘average’.

So what is a better way??Do we get rid of the annual review and not score our people??That would throw the finance people in a tizzy, we have no way to do our pay rises for next year! Many companies have done this, but I don't think this alone will solve the issue.

Performance management has tended to revolve around the annual budget and we have lost sight of the point of it;?the key purpose of performance management is to help our people to improve their performance so that the organisation improves its performance and drives towards its vision – That’s it.?So let’s look at it through the employees lens, what do they want that will help them improve their performance?

1.??????I’d like to know someone cares about me.???If it is all about metrics and profit then I am just a number and you don’t care about me.?If it is about me then there will be more focus on showing that you care and helping and supporting me.

2.??????I’d like to know that the things I am working on matter and how these fit into the vision and strategy of the company. (For this to be true they need to first understand the vision and strategy!)

3.??????I’d like to know how I am doing on an ongoing basis (not once a year) so I have a chance to be successful.

4.??????I want to know that the process and compensation is fair.?Which means that if someone is not pulling their weight then there should be consequences and if someone is a star performer I would expect them to be paid a bit more.

So organisations need to focus less on the process and more on the leadership as that is what makes the difference.??Some key areas a leader needs to work on are:

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1.??????Role clarity – Does the person know what is expected of them.?This does not mean giving them a 4 page job description, that is a waste of time. This should translate to ‘I know what is expected of me, by when, with whom and what I can decide on my own’.?The person’s objectives should reflect the above and if they are clear on the company’s strategy and vision then much of the time they will be able to craft them.

2.??????Performance and development conversations.?There then is an ongoing conversation about how the person is tracking, both from a goals and tasks perspective and also a behaviours and competencies.?The leader’s role is to give regular positive feedback to reinforce the behaviours and practices that you want to see more of and recognise good work and also to identify areas where performance could improve and coach and support them to make the change.

Why don’t leaders do this?

-?????????Having a conversation about something someone could do better is fraught with perceived danger (what if they take it badly? What if they disagree? What if I don’t put it across persuasively?).

-?????????They might brush it off as a one off incident so I won't bother to give them feedback on it just yet.

-?????????They might not talk about the positives as they think that that is just doing their job.

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How do you do this successfully?

-?????????Get your employee to reflect on their own performance first.?What do you feel you have done well this week/month??Why was that???What areas have you struggled with? What areas do you feel you could improve in?

Generally you will find that the person knows a lot of their own strengths and weaknesses, if they have good self awareness and then you can just recognise the positives they have brought up and reinforce/add to them.?For the development you can then build on them with any examples you have and get them to think about how they could address this issue.

The aim is to get your employee thinking about how they might improve an area not necessarily you telling them how to do it.

If they don’t have good self-awareness then it is your job to help develop that self awareness. You can do that using the SBI model.

Talk to them about a specific Situation.

Talk about the Behaviour you observed

Talk about the Impact it had on you or the team.

This can be used for both positive and developmental.

For developmental you can also explore with them their Intent ‘What were you aiming to achieve in that meeting?’

It is also worth getting them to think about how they can utilize one of their strengths to improve a development area.

?If we put more of the focus on leadership and ensuring leaders know what is expected of them and less on the process then there is more chance your people will know what is expected of them, are more engaged in the process and will develop and grow, helping you develop and grow your organisation.