Lessons from the pandemic for Performance Management Transformation

It will be safe to say that every company today is in search of its own performance management solution. We have made progress since the days of “one size fits all” approach in HR and broke the spell of the “best practices” model.  Most practitioners admit that it is not in HR’s  DNA  to be taking risks and making radical decisions, but here is where the pandemic surprised us all.  The global shock to the economy and the disruption of the way we normally do work added to the urgency of finding the right solution particularly when it came to people management. In fact, quite a few HR leaders took bold steps riding in the wake of the disruption and took their companies further on their journeys.  

The case of the pharma companies is particularly instructive.  Leaders in healthcare innovative solutions, the pharma companies found themselves in the spotlight overnight with the world’s only hope, the pressure was on. How did the HR organizations respond, were they facilitators or the fast moving decisions and life saving solutions, could they move fast enough to support their business? 

Steven Baert, the CHRO of Novartis, shares on LinkedIn how his organization responded to the crisis by transforming Novartis’  PM system.[1] What Novartis has learned on their journey could be instructive for all.  These  five core lessons are the blue print for other organizations to follow. It is important to review the steps the company took to arrive at a successful outcome and not to jump to the immediate conclusions. See if your organization has what it takes to create the new PM of your own by checking off the steps that Novartis has taken.  

Lesson #1. Novartis’ workplace philosophy of “unbossing”  their culture was foundational to company’s success in releasing the ‘inspired’ and  ‘curious’ nature of their employees.  The old method of tightened controls in a crisis fails in the face of complex and unpredictable challenges like a pandemic. “Leaning in and listening to our people” was the way for Novartis to navigate their way through the crisis and move forward. 

Check point: Does your company have the culture of employee centricity that would allow for such radical change to happen? Without relying on these principled foundations the change Novartis wanted to undertake would not be easy to achieve.  

Lesson #2. Novartis started with trust in their employees in searching for the flexible working policy post pandemic.  “Choice with Responsibility” was the approach that gave employees themselves greater flexibility to decide on “how, where and when”  they chose to work and what served them best. 

Check point: Does your organization trust the employees with the decision on where they should be working? Is there an environment of psychological safety to debate and discuss these issues and allow employees to voice their opinions and discuss their choices? 

Lesson #3: Novartis crowdsourced ideas on the alternative ways of doing PM from their employees two years earlier. Listened to the feedback that was overwhelming in support of getting rid of the ratings. Ran “rigorous, data-driven experiments involving over 16,000 employees.” In January 2021, in the middle of the pandemic, Novartis made a bold move to get rid of the traditional ratings.

Check point: Find out what your employees really want and what changes they will support. Run proof of the concept experiments. Get a taste of  what it would look like, collect the data, build the persuasive case. Communicate broadly. 

Lesson #4:   Focus on people, not the system. 

Check point: Change how you set objectives, provide feedback, recognize and reward your employees. In other words, it is not about the ratings. If you are not prepared to change the total of employee experience, the ratings will not do it for you. 

Lesson# 5: Turn your leaders into coaches, perhaps the most important step of all.  

Check point: The one quality that jumps out is the leadership quality of being “present,” of listening, being supportive and empathetic. In the pandemic, this quality was tested by virtue of being remote.  

Conclusion: Why do the work of transforming performance management? 

It is clear that at Novartis, changing performance management meant changing the culture by putting their people first.  Not only the outcome matters but the process of going through the transformation matters just as much. If new performance management is a success, the larger cultural shift becomes possible. 

[1] Listen to Steven Baert’s podcast: How Novartis Transformed its Culture