Does your performance management system not deliver outcomes? Instead of motivating your staff to increase their work performance and at home, are they being treated with apathy or then that, with apathy?
In the latest Deloitte survey, more than half of the executives expressed concern that their system wasn’t producing the desired results.
What is the reason? What is the reason why do we see numerous organizations change their approach?
Are you running a system that is more than a century old?
It might be a bit surprising to learn that if you are still operating an organization based on measuring and evaluation of skills and performance, the end of the year ranking and scores, as well as annual meetings for compliance and compliance process meetings, then you’re following an old business model.
It grew out of the Newtonian belief that employees were just ‘cogs in the machine,’ and when these cogs were kept in good working order periodically, the machine continued to function smoothly. Systems like “Six Sigma” promoted this idea until it was incorporated into the management philosophy that has been in use for the last 50 years.
While that might have been a good idea for a while, however, the structure of work has drastically changed in the past few decades.
70% of employees work in knowledge or service-based jobs, and yet the same systems of performance management of fifty years ago are extensively used.
What can be improved?
Traditional approaches to managing performance suppose that people are rational, logical individuals. Furthermore, they believe that individuals are in a position to react to feedback and other information in a rational and consistent manner that is within their best interests.
However, the reality is that every situation is different.
Have you ever conducted an annual review of performance and observed that the reactions varied significantly – often shockingly? Sometimes, even feedback that seems optimistic is received with a different reaction from what you’d think.
The reality is that cognitive biases of a significant nature are in play when people gather at the table – each side of the table and failing to recognize and deal with these can cause unmet goals during the meeting.
In addition to the low effectiveness and the lack of success rate, there are many other issues in traditional performance management. They are lengthy, time-consuming, and costly, with the need to fill out questionnaires, have meetings, and establish a rating system, and then even more time is spent talking about the ratings.
It may be all that ticks some items to HR. However, what exactly is it doing to help develop the career prospects of employees? Additionally, it can cause feelings of demotivation and disengagement that can impact the performance of employees.
The path to take
The ability to help people build their strengths within the organization should be the primary objective of performance management. However, traditional metrics tend to concentrate on identifying the weak points of a few rather than the advantages of many.
Instead of the time and expense of traditional annual formal reviews that are focused on the past, modern organizations now make sure that the leadership has more regular informal conversations on current performance.
Deloitte has stopped implementing the performance evaluations for its global workforce of 65,000. Microsoft, Google, and Adobe have recently changed their ways too.
This provides greater clarity to both sides as it offers constant feedback and coaching, which increases engagement and improves performance right now.
