Performance management is evolving. The time has come to end an era of disappointing appraisal systems and revolutionise a process that needs to drive business value and personal growth.
Performance management is not obsolete, but the way organisations are managing business performance has begun to evolve. Labelling employees according to numbers and bell curves proves to be obsolete and no longer beneficial to business. The assumption that performance is one-dimensional and evenly distributed is misplaced and breeds a culture of mistrust and fear, which in turn deters collaboration. It places a false ceiling on performance, which leads to a lack of motivation.
Managers need to own performance decisions and reward outcomes. Line managers often lack the commitment and skills to conduct meaningful performance conversations. They are usually in the best position to judge, but rarely empowered to own the performance of team members. Empowering line managers and employees to own and manage business performance and associated rewards drives value and improves engagement.
Notably, research shows that strengths-based, real-time, regular, forward-looking conversations produce effective performance outcomes. The essence of good performance management is about translating strategic priorities into day-to-day performance, focusing on people’s strengths and how they can better serve the business, and operating a process that empowers management layers to drive performance instead of forcing the management of it.
The performance management process can also be enhanced by setting personal goals in real-time rather than setting annual objectives that are quickly forgotten and rarely referred to. The dynamics of the business world have changed and strategic business goals set up at the beginning of the year rarely last a full 12 month stretch. This is because market forces often compel organisations to re-align their business imperatives. Yet individual employee goals are hardly ever re-aligned. Goals need to be personal and based on meaningful timeframes to successfully engage and motivate, yet still aligned to overall business objectives.
Instead of focusing on the past, real-time performance snapshots collected on a regular basis should be used to build on future strengths. Extensive research conducted by Deloitte has resulted in a solution that is based on three principles: fuel, see and recognise performance.
Firstly, performance must be driven and improved in the right way through continuous feedback and a focus on strengths. Secondly, it must be understood properly at an individual level through reliable data, and thirdly, reward and recognition outcomes must be aligned to accurately recognise and further drive performance.
At the heart of these principles is manager/employee capability and trust. Managers and employees must own and believe in the system for it to become a truly self-perpetuating process of performance improvement.
Tumelo Seaketso is a Partner at Deloitte.