Performance Management System has undergone a lot of changes
in the recent past to effectively translate effort to performance. The old ways
of assessing performance have proven to be costly and ineffective. Bell curve
alias relative comparison has been observed to be time consuming and often
detrimental to performance. Organizations such as Adobe, Accenture, Microsoft
and Delloite have adopted new ways of assessing to enhance individual and
organizational performance.
Recent Changes
Key modifications in the performance management system
include
-Goal
setting no longer being an annual exercise but goals being reviewed quarterly / periodically.
-More
frequent meetings between managers and employees for setting expectations
clearly, sharing feedback and coaching on developmental goals. At least end of the project or quarterly feedback
is recommended though the meetings could be more frequent than this.
-Rating team members on managers’ own future actions with
respect to the team members is also practiced by few organizations. This solves
the problem of idiosyncratic rater affect with managers
rating employees on their
own feelings / intentions rather than rating employees’ skills inconsistently.
-Rating employees
on absolute performance rather than
using bell curve.
Results so far
Though the results are awaited largely, few organizations
have already started reporting the benefits they are experiencing. Adobe has reported a drop in voluntary
attrition rate by 30% and an increase in involuntary attrition rate by 50%.1
In-order to facilitate more frequent feedback and development conversations,
Adobe has introduced a system namely “Check-in” as per which managers should
have at-least quarterly discussions with their team members. More frequent
communication has honed the leadership and communication skills of managers.
In-fact, 78% of employees perceived their managers to be open to feedback from
them. Adobe has also witnessed promotion of a culture of ownership
where employees want to participate in the success story of the organization.
GE has discovered that the new
performance management system has promoted trust between managers and employees
– a key characteristic of high performing teams. The new system involves a
mobile app called as PD@GE to define near term goals. Summaries of frequent
conversations, named “touchpoints” can be captured in the app. GE has also
witnessed better results by the use of the new system in the pilot project they
have run.
Encouraged by organizations such as Adobe and GE, Deloitte has also revamped its
performance management system to clearly see, recognise and fuel performance. One
of the most important actions taken by Deloitte is to request its managers to
evaluate their future intentions with team members rather than rating them on
their skills. The new feedback structure includes questions such as “Given what
I know of this person’s performance, I would always want him or her on my
team”. 2 This enables managers to take judgement solely on their
available knowledge of the team member. While results are still awaited, Deloitte
is working towards creating not just a simple but also a rich view of employees’
performance to increase the transparency of the system.
As per a survey conducted by CEB 43% of organizations are
either planning to introduce or open to consideration of new performance
management system (n = 296) across the globe while the vast majority of 51%
organizations have no plans to do so. Organizations which are planning to
introduce are awaiting results from their pilot study while other organizations
are awaiting results from organizations which have already implemented the
changes.
Way Forward
With greater focus on continuous feedback & development
and absolute performance, we are moving towards a more progressive way of
assessing performance. In this changing scenario few practices have become more
important and need to be relooked / redesigned for successful implementation of
the new approach. These include:
Honing feedback giving skills of managers - This has
become more important than ever since this is the cornerstone of a culture of
continuous feedback. The feedback needs
to be constructive and future oriented else employees will feel
burdened with overdose of feedback. Organizations not only need to provide periodic behavioral training to their
managers but also assess them on how they
are faring on this skill. Organizations need to provide individual guidance to managers in case
they are struggling to be positive in their approach. Leaders need to take
initiative and set right examples for
others to follow.
Facilitating
real time feedback – The more
data points there are on the performance of employees the lesser the
subjectivity in assessing the performance. Organizations should use mobile friendly tools which facilitate
providing continuous multi-rater real
time feedback to employees. 360 degree feedback helps employees understand
how they are perceived in the organization. Organizations should empower employees to initiate feedback. This
will build a culture of ownership amongst employees.
The
tool should not just provide data but also insights on development areas and
track progress on them. Use of Big Data
could narrow the gap between an organization’s top and bottom performers by
analyzing their daily activities, finding patterns and highlighting the
difference in their approach. This will help managers to have more effective
development conversation with employees. This will also enable HR to track the
quality and frequency of conversations between manager and employees.
Continuous
recognition – Continuous feedback
also calls for continuous recognition. It has been researched that employees
are best motivated when they receive immediate rewards / recognition for their
achievements. Coupling continuous feedback with year-end rewards / recognition is
not a very effective way of motivating employees. Thus organizations need to redesign their recognition program to
support the new performance management system.
This article has also been published in People Matters.
This article has also been published in People Matters.
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