Reviewing ‘performance management’ – my 4 biggest learnings!

In the last 2 years, the Corporate world is abuzz with articles on how large global organizations like Accenture, Adobe, Cisco and GE as well as those closer to home are doing away with performance ratings. There are multiple write ups arguing for or against eliminating performance ratings – explaining the ‘real’ impact of eliminating them – the value to be gained or the repercussions that companies are coping with. I anticipate that this debate is not ending any time soon and most companies are looking to make revolutionary or incremental changes to the way performance management works.

Performance Management is a topic close to my heart for many reasons. So all the feverish debates on rating scale and forced ranking aside, here are my top 4 learnings over the years on what made performance management work and stick in some of the organizations that I have been a part of:

1. As HR professionals, we are very often fixated on the ‘process’ – but our starting point needs to be the behaviours & outcomes we are we trying to drive and then we need to design the process. And finally simple tools to support that process. As an example, if the behaviour we are looking to drive is that managers have ongoing formal and informal conversations with their team members and that year – end ratings are not a surprise – then the process we can implement is that of ‘periodic check ins’ for managers and employees to do a stock take of performance and talk about how to elevate performance in the future. And the tool to support the process could possibly be a simple check – box on the performance management module in the HR system that allows employees or managers to capture the summary of the check – in discussion. This is just one example – my key learning has been that as HR professionals we need to cover the entire spectrum of ‘process – tools – behaviours’.

2. By labelling performance management as an HR process; we undermine its criticality and impact. It is a management process that helps organizations translate what they need to achieve at a Company level to goals at a business unit, team and individual level. It is equally a development process that focuses on developing our employees and building capability at an aggregate level for the organization. In fact, a process that focuses only on the achievement of business outcomes is bound to adversely impact engagement. Organizations need to very carefully craft what the objectives of this program – what it is intended to deliver for the business as well as employees.

3. Over invest in manager capability development – there is no replacement for this. A 2008 Corporate Leadership Council study on high performance organizations talked about the 2 activities that if managers get right – it can have disproportionately high impact on improving employee performance. These are clarifying & setting performance expectations and providing fair & accurate informal feedback. An approach I have found that works is doing bite – sized ‘just in time’ capability building capsules for Managers to equip them with the skills to in both these areas. Another approach I have found that has worked well is providing managers with sample questions to ask in these crucial conversation like development planning discussion; career coaching conversation; periodic check – in. Many times, our people managers want to do the right things – but they don’t how to and it is the organization’s job to equip them.

4. Clarify the monetary and non – monetary outcomes/ interconnections of performance (with our without ratings) with other HR processes – if there is a single biggest culprit that erodes the credibility of this process – it is our inability to clarify to our employees what their performance (in conjunction with potential or without) translates into with respect to rewards, development, career progression etc. A big shift that I have seen during the course of my own career and one that has been difficult to accomplish is the change from compensation tied directly to rating vs. ratings being an input into compensation amongst many other factors. As organizations we need to take out the time to articulate these outcomes or interconnections and transparently share them across the organization.

Last but not least, be resilient. It takes atleast 2 to 3 cycles to embed any process in the DNA of the organization and it is no different with performance management. So be patient and keep at it!