Performance management done right can unlock vast swathes of potential among employees, says Chris White.
By giving them the tools to understand how well they are doing their role and empowering them to make positive, timely change, performance management can deliver a workforce of proactive, productive and happy workers.
Yet how many organisations can truly say that their performance management approach is living up to its full potential?
Not many. Over half (56 per cent) of employees told us they receive feedback only once or twice a year when we asked them in our most recent annual Performance Management Report. Of those, 19 per cent had feedback conversations less than once a year. A further fifth (19 per cent) were having conversations quarterly. All too often, performance management is relegated to annual appraisals and outdated processes like 360-degree feedback, presented as a once-a-year feedback session with little to no opportunity to revisit progress as time progresses.
Why performance management matters
At its heart, performance management is aimed at allowing every employee to improve their performance at work.
The concept is simple: by giving quality, regular feedback along with clear goals and access to training to support development, managers can develop their teams to make them better at their jobs. Without it, employees are cast adrift and managers have little to no control over how, when and why they take steps to improve their work. The result can be haphazard training, directionless work and an undermanaged workforce. This in turn can reduce productivity, profitability, motivation and skills development – the business can stagnate and both organisation and employee suffer.
Outdated approaches can actively harm performance
Taking an old-fashioned approach to performance management can be incredibly harmful and actually achieve the exact opposite of what’s intended. When performance management is done badly, employees feel demotivated, unappreciated, personally targeted and unfulfilled. A bad annual review can feel unjust and trigger behaviours like quiet quitting or even the start of job hunting.
Some of the most common poor practices are annual appraisals and 360 degree feedback.
The main problem with annual appraisals is that they don’t allow for regular, in-the-moment feedback which is when a positive change can happen. Instead, feedback is stored up and delivered at a much later date when the employee may not even recollect the example in question and certainly can’t take steps to rectify it. Giving feedback once or twice a year slows personal development by taking away people’s chance to make changes throughout the year.
And, when coupled with a pay review, annual reviews can be actively detrimental. Using performance as a reason to withhold pay increases, deliver smaller-than-expected pay rises, or halt bonuses is wildly unfair when the employee has not had any opportunity to understand how their performance is being perceived throughout the year. This will likely generate little more than resentment and job dissatisfaction.
Meanwhile, 360 degree feedback has been repeatedly shown to undermine the end result it aims to achieve. First popularised in the military in the 1950s, the practice soon spread to workplaces and is still a relatively commonplace occurrence. However, the practice of providing anonymous, contextless feedback does little to enhance the personal development process.
Another common criticism of 360 degree feedback is the administrative nightmare that they require to execute, along with the awkward experience of delivering mixed anonymous feedback for the facilitator.
Taking a modern approach
The science of performance management is well documented. It involves a three-pronged approach:
- Set good quality, relevant goals
- Provide access to coaching and training
- Give constructive, quality feedback in the moment.
It is very rare that performance management processes achieve all three of these but without meeting all three areas, a performance management programme will not succeed to its full potential.
The modern approach to performance management is centred around a continuous model. It’s important to make this the norm in your organisation if it’s to work, and that in itself may take some time. But giving managers the time, budget and resources to switch to a continuous feedback model is the only way forward. Make it normal for feedback to be given daily, or even multiple times in a day.
It also needs to be usual for people to ask for feedback from their managers, peers and juniors. It must be clear that feedback is being used within your organisation as a way to make everyone improve – that it’s not linked to pay, or going to be used as a reason to hold back on promotions and so on.
When people ask for feedback regularly and see this as a positive thing that is helping them to develop their own careers, you can empower the workforce to work towards its own self-improvement. The employee is in control of their own experience of performance management, which makes a huge difference to how effective it is.
The modern performance management approach is about empowerment, progression and self-belief. If your system isn’t achieving that, it’s time to make a change.
By Chris White, head of product – people solutions at business software firm Advanced.