"To get maximum value from performance management, organisations need to ensure that high quality and supportive conversations are taking place between managers and their teams."
Amy Dickinson, PA Consulting Group
Since its inception in the early 1900s, the focus of performance management has changed completely. Originally an HR exercise that concentrated on employees’ ratings targets, performance management is now a business-owned, strategically focused approach to driving commercial performance.
Despite this radical change, 80% of organisations report that their performance management approach is ineffective. Convinced of its inherent ability to drive value, they are seeking ways to re-shape how performance management is carried out in their organisation. With little innovative thinking available, however, organisations typically rely on introducing additional processes.
To get maximum value from performance management, organisations need to ensure that high-quality and supportive conversations are taking place between managers and their teams. They must concentrate on developing performance relationships that are driven by effective and engaging dialogue.
For performance management to be effective, there must be a robust underpinning process in place. While such processes are a ‘hygiene factor’ that generally cause dissatisfaction only when missing, the conversations that add the most value will only start to happen when you focus on ‘how’ performance can be improved rather than on ‘what’ needs to happen. So make your performance managemtn process as light-touch as possible, and instead emphasise the importance of effective collaboration, understanding team and individual motivators and recognising employees for their contribution.
Increasing diversity in the workplace means employees have increasingly varied expectations – from rapid progression through the ranks, to diverse and varied benefits programmes. Faced with this growing individualism, organisations are moving towards customised HR talent management approaches. To ensure the performance management in your organisation reflects this approach, you should recognise that individuals have different motivators and will therefore appreciate recognition in different forms. These forms could include greater autonomy, the opportunity to participate in talent programmes, or a simple “thank you” from their manager. eBay is one of the many companies to have recognised this trend, and is focusing on intrinsic motivators as part of its performance management framework.
Often promoted due to their technical capability, managers frequently fail to be trained in the critical capabilities that will enable them to be successful in managing and leading their people. However, by focusing on the quality of dialogue between the manager and their team, it will become clear which managers need support to become comfortable in having employee-orientated performance conversations. We worked with a major online trading platform to deliver performance management training to over 500 managers, focusing on setting great objectives and having valuable conversations. The company believes that investing in this aspect can yield substantial returns.
To find out more about improving performance management in your organisation, please contact us now.