Upgrading Performance Management Processes

In my May 11 Blog, Should You Drop Performance Ratings? I discussed the revolution occurring in HR Departments and companies large and small with regard to the traditional performance evaluation system. Many companies are shifting away from the annual review to more flexible, on-demand evaluations to align with a fluid, on-demand market. The need to respond quickly not only to customer desires, but to the needs and wants of employees and managers is driving change in a system that has been largely unchanged and in place for decades.

Recently, six of our Cognology clients took the time to talk with me about how they’re evolving their performance management processes. They’ve developed some innovative solutions I wanted to share, along with general trends we’re seeing in the business community.

The Trends

Many companies that decide to upgrade their ratings system are developing processes that work just for them. They may add more frequency, build on the system in place, scrap the old model all together, or any combination. The variety of changes is as vast as the variety of companies. Some models will work for one firm, others for another. But they’re all based on the singular notion: engagement and innovation occur in real time, and so should performance management.

In some cases, the need to reduce the complexity of the system has been the driving force behind change, for others the need to reduce formality is the goal. In almost all cases, higher frequency feedback is implemented. In a highly competitive marketplace, business must be poised for change at a moment’s notice: as must their employees. When feedback is frequent and ongoing, change is easier to affect. And, as the lines of communication open and trust is built, the “we fear change” mentality shifts to “we can do it together.”

Another trend is to eliminate the “goal setting” aspect of the rating; exchanging it for predictive planning. Collaborating on achievable projections, rather than setting rigid goals, engages the employee in the growth process. Instead of telling staff members where you expect them to be within a specified time frame, you work together to achieve short-term milestones that translate into long-term growth. The payoff for employers are employees who reflect on their growth throughout their employment – not just when evaluation time is nigh.

Including self-initiated and self-reflective ratings give employees the opportunity to evaluate their own work with the guidance of their manager or team leader. In addition, they can also provide valuable insight into a staff member’s perspective on the company and their role in its success.

A common thread in all upgrades is that a system built on rigidity can create a barrier to employee engagement. Building fluidity into the process, even including an option to incorporate peer and crowdsourced feedback, changes the dynamic from assessment to teamwork. Some are even creating trust with audit logs as a fallback in the event of disagreements – an option to agree to disagree – that isn’t punitive, and can be reevaluated in future, if need be.

Building With Trust

Throughout any change initiative, trust is crucial. Upgrading a performance system is reliant on trust: trust that the change will be beneficial not only to the company, but to each individual staff member. Engaging staff in higher frequency feedback could be viewed as micromanagement or collaboration: how it’s seen and utilized by depends on how you frame the case for change. If employees know they can seek out feedback without fear of reprisal, productive communication can begin.

And fear of reprisal has some legitimacy: remember the traditional employee evaluation system, which intended to provide guidance and set goals, has long been tied to annual salary increases. Showing your weakness, in the past, may have meant a lower raise for the future. Staff will need to be assured the new system will not be punitive: that we improve as individuals and as a company when we seek guidance; discuss areas for improvement; or work together to problem-solve.

Monitor Change

As with any change, it’s important to monitor the effectiveness of each aspect of the new system as it evolves. Are more frequent feedback meetings opening lines of communication and breaking down barriers: if not, why not? Is self-evaluation providing insight and opportunities for planning: or are trust issues impeding its success? The payoff – as staff members participate in the evolution of the process, you should see them gaining ownership of their future. That ownership can translate to higher productivity and engagement.

Some adjustments may be needed along the way, but don’t let them discourage you from moving forward. Some methods will work well, others not, still others may need modification. But all attempts to upgrade will show staff that you’re working with them to drive their success, as well as your own. As you build on the knowledge you accumulate, you may very well develop a customised system that serves your company, your staff, and bottom line quite well.

Is Your Performance System Due for an Upgrade?

Is it time to make a change? You may not be comfortable with a complete overhaul, but some trends may intrigue: feel free to take them for a test drive. If they work, hang on to them: if not, try something else. Whatever motivates you and however the process evolves, the result can be real-time, actionable feedback. That level of agility could make your company more responsive to an ever-changing market. The bonus – employees will recognise they are taking a role in their own growth, which translates into growth for the company.

Whether you’re ready to jump into a new system entirely, or hope to evolve your current system into a something more flexible, the trend to shift the performance process itself is an expression of a larger need for change: a recognition that our staff are partners in prosperity. When everyone is collaborating to succeed, the possibilities are endless.