How many of us truly believe that our performance review process adds value and that the time we spend managing the process improves results and the organization’s bottom line?
In a public survey Deloitte conducted recently, more than half the executives questioned (58%) believe that their current performance management approach drives neither employee engagement nor high performance. (Harvard Business Review 2015)
Why would we continue a process that has no value? The answer appears to be that it involves too much effort to change. How sad is that! Deciding to ditch a process that has been a foundation of our people programs for decades is not for the faint of heart. For many organizations, significant time and resources have been invested into developing a performance review process that at least insures their managers are talking to their employees about their performance on an annual basis. This annual review and the performance management process as we know it today is not enough, and in many cases, it is de-motivating and unengaging.
It is time for organizations to consider alternative performance review processes, and determine whether abolishing traditional performance reviews could create more efficiencies, flexibility, higher levels of engagement and accountability. One needs to consider the objectives of a performance review, which we believe are to give good candid feedback on how the employee is performing relative to the job he/she was hired into; to discuss the progress towards goals and objectives; and to plan on a go forward bases the future – both from an employee and organizational perspective. This dialogue needs to occur frequently and in a timely fashion, not just once a year.
If you are considering ditching your traditional performance review process we applaud you for your innovative thinking and would encourage you to consider the following:
- Train managers to give continual feedback in real time and as they see it. Teach your managers that the best feedback they can provide employees is at the time they either see behaviours and outcomes that are good or they see behaviours that need to change.
- Create an expectation from your managers to periodically meet with employees and discuss goals and objectives. Ensure managers understand the importance of documenting the meeting and outcomes. Keep it simple – an email on what is expected over the next business cycle (which can vary depending on the position) will be sufficient. Be prepared to change the goals and objectives in the event that priorities change for the organization or business unit. Remember to keep the dialogue relevant!
- Help every individual understand the mission, vision, values and core competencies that are fundamental to the success of the organization. Ask your managers to report back every quarter to Senior Management that these conversations are being held with employees. Check in regularly with staff through random surveys that ask the question – are you meeting periodically with your manager on the business strategy and do you understand how your job contributes to the organization’s bottom line. Ask employees if they know what they need to do to be successful in their position and to affect the organizational results. If the answer is yes – great job! If the answer is no then hold your managers accountable and ask them why employees are not being informed.
- Teach your managers the legislation and what is required in order to deal with a performance issue. Make certain in your policy and procedure manual that the steps in progressive discipline are identified and a process for placing an employee on a performance improvement plan (PIP) is clear. Help employees understand that this process is only for employees that are having performance issues that could result in them leaving the organization if change in behavior does not occur.
- Keep people processes simple and relevant – utilize technology to record outcomes from conversations and agreed upon action plans.
As you consider transitioning away from a traditional performance review process, it is important to focus on the benefits it will bring to your organization over the burden of change or lost sunk cost that went into developing the current process. Keeping the above suggestions in mind, this transition can be done simply and without incurring further development costs. Moving towards more frequent and timely performance reviews will create greater performance review relevancy, enabling managers to build stronger relationships with employees and discuss behaviours before they become an issue. This will result in higher employee engagement and reduced turnover, which will lead to increased productivity and lower costs for the organization over the long term.
This article was originally featured in the HRIA Essentials February newsletter. Check it out for more great articles specific to Performance Management.