Time to reimagine Performance Management

Last week, while I was coaching a number of clients the subject of performance management cropped up a few times. Generally when it crops up it is not about someone performing 'above expectations', it is generally someone 'below expectations'. It got me thinking about my experience of performance management, both as a leader and as a recipient.

Here is how it does as a leader:

Leader - Person A has done ok, so I think they are mostly meeting expectations and will give them a '3' (out of 5, where '3' is meets most areas and exceeds in some, '2' is below expectations, '4' is above expectations and '5' is 'walk on water superstar')

Recipient - I don't want to be average (a '3') so I am going to bring up all of the evidence of where I have performed really well, spend hours justifying it and push for a '4'.

Both leader and recipient enter the meeting anxious about the potential conflict.

At the end of the meeting, both the leader and the recipient walk away disappointed. The leader gave a '3' as if they give too many '4's the budget would be blown (as it's linked to individual pay). The recipient walks away disappointed as they do not feel valued.

I have not spoken to anyone who says 'Performance reviews are fantastic, they really motivate and inspire staff'. So what is the purpose of performance reviews? And how do we make them inspiring, useful and for people to feel valued?

Firstly, I would separate individual pay from the performance view. You can benchmark roles against the market to ensure you are paying people appropriately and ensure you are paying the highly experienced/highly effective performers above the benchmark based on performance over time.

The main aim of performance management is to help EVERYONE improve. If everyone in your organisation is improving every month/year and your strategy is aligned throughout your organisation, you should be seeing your overall organisation's performance improve.

So the question for leaders and for their reports is where do you want to improve, both personally (capabilities that link to better functional performance and future roles) and functionally (Where are the improvements in their area you both want to see). If you are both aligned on those two areas then it then becomes about measuring progress and supporting the person when there are challenges. No more '3's, '4's or '2's but there should be more conversations valuing people (when they are improving and maybe even improving faster than you expected) and supporting and helping them when they are struggling or not making progress.

Let me know what you think