The Fallacy of Shifting?Performance?Management

There is nothing worse than the sounds of stampeding animals (just ask Mufasa). Honestly, there are times that it feels like shifts in parts of talent management take on the air of a fashion trend or the weird popularity of the Pet Rock

. Over the course the 2016, one of the things we heard a lot about from clients was the desire to shift their performance management (a.k.a - annual review, performance evaluation) to “performance enablement”. There were many companies that did this recently with a big splashes, like Accenture, Deloitte, GE, and a few others.

There is a ton of research that indicates the current way to managing performance is not only outdated but detrimental to actual performance. There are two prevailing reasons that rise to the top (in my opinion):

?     It’s not really feedback - The annual review is supposed to be the culmination of an employee’s year. It is touted as a “year in review” and opportunity to reflect on what went well and what didn’t. Unfortunately, it almost always fails miserably. Why? Well, it’s fairly one sided and tends to replace real feedback. When I first became a manager (before the internet was important), I was told that no one should be surprised by what’s on the annual review. But, far too often that is what happens. 

?     It’s seen as a “check the box” exercise/has limited impact. - Let’s be honest. Most of the time, the review is part of (or directly adjacent to) salary increase discussions. For the most part, organizations don’t allow leaders a lot of latitude when it comes to the impact of a good or bad review. So, if you get 3.5 vs. 4 vs 2 smiley faces, it matters not a whit on your paycheck. Not only is it time consuming, in the end many employees (including those people that write the reviews) see it as a “have to do” without much value add. 

(of course there are exceptions to the rule...)

What can an organization do when there is the itch to shift the performance management process?

There are 3 key steps that will increase the likelihood that it isn’t a futile effort. 

1.    Don’t follow the herd

It is probably a good idea not to be the first one to try the new thing, unless you are launching a product or service. Yes, someone must be first, but in the case of people programs, it doesn’t have to be your organization. That’s not to say there shouldn’t be innovation. But, the innovation should be about how to make things easier, better, faster, etc. It shouldn’t be about making a shift to a new process because some other company is doing it. (Look at what EY is doing for example)

2. Base the change on the behaviors you desire

If there is going to be a shift in a people program/process, ensure that the result will be an increase in behaviors that are important for the future of the organization. In the case of performance management (evaluations), assess the behaviors the current process is promoting. (Based on experience it is either, getting things done or following the rules) Determine if those are the behaviors that are going to increase the likelihood of success in the future. If they are, don’t change things materially. If they aren’t, that is a good reason to alter the process. 

3. Connect it to business

One of the worst things that a people process or initiative can turn into is a “check the box” or “purely administrative” task. A great way to increase the likelihood of people following through on it and that it has impact, is connecting it to a meaningful business outcome or goal.

Caveat: The fall back goal in instances like this is retention. Retention is great, but it’s not the panacea (and there is almost always pushback about it from senior leaders). Instead, think about how this process will produce an intended behavior and what the business impact of that will be. For instance, let’s say the desired behavior is customer focus. Here an examples of what might connecting performance management to customer focus do:

• Pushes leaders to look for examples of employees that are exemplifying customer focus and rewarding them. Regardless of what someone does, they can have an impact on the customer - 

?      An IT employee enabling a system change that lowers hold time, 

?      An accounting employee that shifts an internal process that increases cycle time allowing customer refunds out more quickly

?      A facilities employee that finds a way to increase the efficiency of new employee set up, thereby getting employees on the phone to help customer more quickly. 

There are hundreds more. The point is, looking for and rewarding a behavior is going to get more of it…quickly. 

People see that impacting customer focus is rewarded more, so they strive to impact customers as well. 

Yes, this is oversimplified. But, there are three critical points here:

1.    People Processes should be used to promote a behavior.

2.    Everyone can see their actions impact on the customer focus. 

3.    Customers are better taken care of so customer engagement goes up…thereby increasing revenue. 

Without that causal connection, the process is done because it supposed to be, not because it makes the business/people/customer better. And yes, if a people process can’t connect to a business goal or outcome, maybe it shouldn’t be done. 

Shifting performance will NEVER happen just by changing how its rated or calling the annual evaluation something snazzier sounding. It will change by shifting what is rewarded. 

What do you think? 

Mufasa picture - www. Graphic Nerdity.com

Pet Rock picture - www.ABC News.com