Introduction to Performance Management
Ever wondered how large organisations successfully manage and motivate their people at scale? One of their secrets is Performance Management, the process through which leaders, managers and employees work together to plan, agree and then review progress against actual attainment.
Unlike the single annual review, performance management aims to empower and motivate the workforce, focusing people on hard measurable results instead of fluffy and highly subjective competencies (or the other myriad ways used to try and measure the fit between people’s skills and the organisation).
So why do employees hate the ‘old-fashioned’ appraisal? In short, the majority of people think that competency-based reviews were designed to work against them. The Corporate Executive Board (now part of Gartner) surveyed people in over 1000 different organisations and the findings were loud and clear. 66% of people were strongly dissatisfied with their performance appraisals and unsurprisingly, 65% believed that the competencies they were being ranked against were not even relevant to their jobs.
One could say the annual-review based approach was flawed for a number of reasons. It was definitely like looking in a rear-view mirror asking employees to reflect on something that happened many months ago. Most people can’t remember what happened yesterday, never mind what they did three months ago. The approach was also at odds with the real nature of modern business and strategy which is moving faster than ever before. Companies need to change tact and direction super-fast. With managers and employees rarely coming together, employees could start drifting and waste time focusing on goals or initiatives that are not even relevant anymore.
A performance management approach couldn’t be more different. It involves managers and employers creating shared goals with shared accountability. They both say goodbye to fluffy hard-to-understand objectives and shine a light on hard evidence that can be captured, reviewed and shared. It’s about managers and their reports working together to achieve the goals, using regular get-togethers and catch-ups to keep checking progress against the plan and then delivering coaching to help people to get exactly where they need to be. These regular catch-ups are either formally diarised or just informally happen as and when. Given the massive trend towards remote and hybrid-based working — this approach makes perfect sense and avoids the ‘out of sight, out of mind’ mentality.
Performance management isn’t just based on company outcomes or measures of success. It also means a heavy focus on personal growth and development - and is there to meet both company objectives and individual career goals.
Let’s take a look at five different ways you can really leverage performance management to harness your workforce:
1. Use SMART goals so everyone has a clear, objective understanding of what they need to achieve
You’ll get the very best out of performance management when you and your employees commit to firm, highly measurable goals — the simpler the better. Even the best-laid plans can be so fluffy and open to misinterpretation. Let’s imagine you ask someone to bake a cake. That goal could lend itself to millions of different outcomes. In reality, we probably have a good idea of what we want and need — and we’ll only get the result that we need if we are super clear about the exact requirements. For example, when does the cake need to be ready? Exactly how many slices should it be cut up into? What size is a single slice? What flavour does the cake need to be? Is it a Victoria-sponge, a cheesecake or a unicorn cake? The figurine of Peppa Pig on the top — what is the level of realism needed to make it acceptable? What is the exact price to the $0.01 that the client is willing to pay? Where does it need to be delivered and at what time? Does the cake need to be Vegan or Gluten-Free? It if contains nuts, could it kill someone? When ordering a cake, these seem like obvious variables to account for. But when it comes to setting goals and objectives in the workplace, managers frequently fail to deliver enough guidance and detail so that employees know exactly what success looks like.
That’s where SMART goals come in. You’ve likely heard of this approach before and it dates all the way back to 1981. It’s not rocket science but it does make an awful lot of sense. This approach to scoping and describing goals was quickly adopted by companies and organisations all over the world.
You can read detailed articles online about SMART goals, but here’s a quick synopsis.
S - Specific
M - Measurable
A - Attainable
R - Relevant
T - Time Based
Start by being really specific about the goal and what a successful result tangibly looks like. What task needs to be done? Who must complete it? — and when must it be completed by? A good example would be saying “you need to produce 200 lemon muffins — and they must be at the factory door ready for collection at 2:00pm on Friday afternoon. Don’t forget to be specific about scope, quality and specification. You don’t just want any old lemon muffins. You need to detail that they each need to have a minimum of 2mm of white icing applied to the top half, with no drips! Add detail so there’s the minimum risk of misinterpretation. Providing extra information like a photo of what a kick-ass muffin looks like is another way to communicate very ‘specifically’.
The goal or objective should be measurable across a number of dimensions. It would be easy to set a sales target of £250,000 — but the salesperson could apply an excessively large discount to secure those sales. Therefore you need to provide measures of success such as target costs, quality levels, quantities and a time frame. Avoid using management ‘babble’ and acronyms. The simpler to understand the better.
Impossible, unattainable goals don’t push performance further. They simply de-motivate and dis-engage people from the task at hand. Make sure that your objectives are realistic and practicable even for the average person in your team. For your highest performing people, give them stretch goals to help drive and motivate them — but remember to offer a reward for meeting these hard-to-reach heights. Proof that other people have attained the goals helps to make them feel attainable.
Goals should always align with your organisation’s high-level strategy. Link people’s work to those high-level objectives. This will give them a real sense of mission and purpose.
A SMART goal is never complete without a specific timeframe that sets expectations. Every organisation is different — you might be reporting results daily, weekly, monthly or even quarterly. Whatever matters to you — make the important timeframes clear and ensure there is shared understanding between manager and employee.
2. Schedule regular coaching sessions to keep track of performance against agreed objectives
Performance management catch-ups can be formally diarised or informal. However, you do them don’t forget that performance management is NOT about micromanagement. It’s not about watching over people’s backs in real-time. These sessions should feel like coaching sessions. Ask objective questions about success and performance. Questions like “how is everything going”, “is there anything I can do to help you?” And “do you have everything you need to keep things on track?”. Where possible, use real-time dashboard-style reporting so that work performance is automatically measured and recorded. That way, during your coaching sessions everything you need is at hand.
3. Use Action Plans if performance looks like it’s going to slip
By having regular catch-ups with employees, you’ll know if they’re not on-track to hit their target by the end of the measurement period. Instead of delivering words of dis-encouragement, work with the employee to co-create a personalised action plan that will help them fill the performance gap. It’s worth thinking about the team’s performance as a whole; is it just this one employee? or is everyone falling short? If that’s the case then it could be that your objective is not an ‘attainable’ one given the time and resources provided. Part of the action plan could be delivering extra training, coaching and talking through the employee’s strategy for completing work. Ensure action plans are clear, specific and well-documented (without resorting to unprofessional language or value judgements). It’s prudent to discuss the consequences if the issue isn’t resolved. If successive action plans don’t help people to improve their performance then this could end up being a disciplinary issue — in which case the evidence you’ve documented could be needed. You’ll want to refer back to this as proof of the steps you took to support the employee.
4. Let your performance management software automate the Performance Management Journey
When it comes to performance management, you want to maximise the face-to-face time with your people, instead of manual admin taking over your life. A talent and performance management system will enable you to keep your team engaged without a spreadsheet in sight!
Performance management software gives you a central place to coordinate, record and capture all of the information. These cloud-based platforms do all the heavy lifting for you, especially when it comes to getting a real-time view of competency and skills gaps. Keep your finger on the pulse of employee health, mood and wellbeing by deploying surveys so that people can report back (anonymously is your employees prefer). Instead of trying to keep track of everything in a do-it-yourself spreadsheet, your talent management system should allow you to build a personal development plan for each individual, making it easy to schedule coaching sessions, enter performance data and automate the whole evaluation and appraisal lifecycle. Systems like Jemini even allow you to ‘gamify’ the work experience, sharing badges and virtual rewards that keep people feeling valued and motivated. The very best systems also allow people to flag when they need help and want to request support (something that’s been made harder when people are working remotely and away from the office).
5. Celebrate small wins and keep people enthused
Our final tip for really empowering your workforce with performance management is to make a point of celebrating even small milestones and achievements. We’re only human — and our brains appreciate a regular serotonin hit! Break down long-term objectives into shorter-term milestones — and celebrate and acknowledge each step. It can be as simple as a personal note sent via your performance management system, or a little sweet treat shared together. Make the opportunity to make this count — and your people will really notice these little, heartfelt gestures.