Reimagining Performance Management System: From Evaluation to Performance Evolution

* Source- https://www.ncaindia.org/albert_einsteins_quote

I think you must have seen this image many times on the internet. I believe it’s an apt representation of the current education system. But would I be wrong if I say that it is equally apt to show limitations in the Performance Management practices in organizations too?

“Not every one of your employees can be a star employee” - this statement might seem obvious but it brings out a question that not enough leaders ask themselves when evaluating the performance of their employees, which is “Is each and every one of my employees getting a chance to be my star employee according to their potential?”

A good start to explore the answer would be to ask, is the current Performance Management System rightly designed to bring the best out of your employees? I believe that it’s not. In my experience, the current system mostly focuses on only performance and results, that too predominantly short-term results. They don’t delve much into what can help an employer understand the potential of an employee and support its realization.

From The Annual Confidential Report (ACR), that were shrouded in secrecy and one-way flow, and driven by a controlling mindset, the Performance Management System has evolved a lot since the 1940s & 50s but they still are far away from tapping the full potential of their human assets.

ASPECTS OF AN EFFICIENT PERFORMANCE EVALUATION SYSTEM

I believe that it’s high time now that our Performance Management System needs to evolve into a Performance Evolution System

PERFORMANCE MANAGEMENT SYSTEM VS. PERFORMANCE EVOLUTION SYSTEM

Now that you know what needs to be changed in the current Performance Management System, let’s talk about a model which can help you not just manage but also boost the overall performance of all your employees according to their potential to build an organization of the future.?

REIMAGINING PERFORMANCE MANAGEMENT

In the picture below I have tried to explain how the reimagined Performance management should work

Fundamentally, we need to create an efficient framework to map both the performance and potential of every employee because when it comes to evaluating an employee's value for your organization, you can't just focus on the result achieved and ignore the potential and competencies of an employee. Then use this understanding to co-create a development plan that will help develop the untapped potential and evolve employee performance in alignment with organizational goals.?

A fundamental part of the system is the growth path. The growth path should be identified to best fit the organization’s needs (not just current but future), employee competencies, and employee aspirations. The entire process is collaborative where the employee is an active participant.

The 9-box grid is an excellent framework that maps employees against two axes: current performance and future potential to help HR facilitate conversations about employee development and succession planning. Most good HR systems include integrated 9-box grids that enable a more agile and inclusive approach to talent planning and development.

HOW DOES IT WORK?

HR and leaders work together to assign employees to relevant boxes on the grid based on the two categories. The x-axis represents the employee’s current performance, and the y-axis represents their potential. In the initiatives that I have driven, I have used both the competencies and values to define the y-axis, where coachability and learnability were included as vital core competencies.?

The employees must be active participants and deeply engaged in the process so that the conversation about each employee is “informed”. This means that HR and leaders should understand the reasons behind an efficient utilization of the potential or lack thereof. For e.g., an employee may have significant potential that is very valuable to the organization but it is untapped, maybe because the role that the employee has been positioned at is a mismatch or the employee needs apt training to utilize the potential and amplify the performance.

The framework works better if the concrete feedback is solicited from stakeholders who have closely worked with the employee and forms an important part of the discussion.

BENEFITS OF THE PERFORMANCE EVOLUTION MODEL

Encourages dialogue

As an HR professional, you no doubt understand the difficulties of assessing employees’ performance and evaluating the health of different talent pools within your company so that you can help plan for business continuity and employee growth. How does the business go about evaluating your employees’ potential? How do you identify who will make a strong future leader, and do you know the possibility of lifting those who are falling behind?

This is where the 9-box grid can help. It’s a simple but powerful tool that serves as a framework for discussion with managers about talent and encourages important conversations that are unlikely to happen without it. It allows managers to collectively identify the strengths and development areas in their talent pool/s, while giving transparency over the state of the talent across the whole company, helping to remove barriers to employee movement.

Gives you a fresh perspective

Because the process of assigning employees to different parts of the grid is collaborative, managers benefit from hearing the opinions of others, so that a more objective assessment of employees’ progress and potential can be made.

This is important because it is possible that a manager’s relationship with an employee might have biased their assessment of his/her performance or an employee may have demonstrated abilities their manager wasn’t aware of when collaborating on a project with a different team. So, having a collection of opinions brings fresh perspectives for everyone involved, allowing for a more informed discussion.

Helps you plan for the future

The process doesn’t stop with a constructive conversation, however. The real value is in how you can use the information to improve succession planning and employee career development, ensure continuity and growth, and take your business to the next level.

For example, those Star employees identified as having high potential, high performance, and showing signs of being future leaders, or future stars in their own right, will need to be nurtured so they remain challenged and rewarded because they may play an important part in the continued success of the organization.

Highlights development opportunities or training needs

Some of the players in your cohort who are currently falling behind, or those who aren’t suited to their current role, can also be highlighted in this process. High potential but low-performing employees(Potential Gems) may need motivation, through a stretch assignment, mentoring, or a change in the role within the company. Candidates assigned to the low potential and low-performance box(Risk) will need a different strategy and might require further investigation. Would they benefit from training? Are they currently dealing with difficult personal matters??

These considerations often pay rich dividends and carefully evaluate them before you decide on an exit plan as the way forward. I can say this from my personal experience because I have seen and engaged with multiple cases where the organization had almost decided to put an employee on the exit plan but when the holistic approach was adopted, the employee actually showed great results, and in one case even became a function head in less than two years

Employee engagement and retention

When you can holistically evaluate not just the performance of an employee but also their potential, you will get a better understanding of how to keep them not just satisfied but inspired with their work or take measures to give them the job satisfaction they need. For eg. an employee may be giving a very good performance at the current position but might not have the potential to grow if you choose to promote them, so you will need to give them other incentives to keep them motivated at their current position.?

When employees feel that the organization genuinely cares for the development of their potential, it builds a greater sense of belongingness and a deeper connection with the organization for them. This not only leads to better retention but also inspires the employees to become brand ambassadors and talent scouts for the organization.

Helps in talent acquisition

With the employees being the enthusiastic talent scouts, and the ecosystem getting aware of the organization's performance evolution philosophy and approach, the organization becomes a magnet for great talent.?

Also when you hire talent just on the basis of the results they have shown in the past without considering their potential to grow or lack of it, you might find yourself hiring employees that organizations generally categorize as “Bad Hires”. With the 9 box grid, you will be able to reduce the chances of hiring these “Bad Hires” and increase the chances of hiring employees who may be less experienced but have the potential to grow in your organization.

WRAPPING UP

The success of this framework demands a strong value system from the organization, especially integrity and authenticity. I have seen remarkable breakthroughs in a couple of organizations where I got a chance to experiment with this model (either directly or as consultant/advisor), and the leadership of those organizations was strong on those two values. I have also seen the model failing badly in an organization, where the model roll-out further aggravated its organizational and cultural weaknesses, and the two values made the big difference.?

To wrap up I want to say that you should take a more holistic approach in your Performance Management Practices so that you can best realize the potential of your human assets to drive a breakthrough performance not just in the present but also in the future. And, when I say “future” I say so because a holistic approach can help you find apt answers to the following questions

• What is the potential of my team?
• Are they performing up to their potential?
• What leadership style would help to get the best out of the employee?
• Do we have the right future leaders?
• Should this employee be promoted?
• What investment should be made in employees’ training to improve their performance?
• Should I reallocate this employee to a different role?
• Should I start thinking about an exit plan for this employee?