Performance management. Two words that strike dread into the hearts of leaders and employees alike.
If the goal of performance management is to identify, measure and develop individual and team performance, why does it get such a bad rap? After all, that sounds like a great outcome for both employees and the organisation, right?
Performance management is more than just the rating that an employee might receive in their end of year review. It’s a system made up of activities, policies and processes designed to improve employee performance enabling organisations to achieve strategic and operational goals.
Effective performance management supports leaders in setting clear expectations regarding priorities and goals, identifying support and development required and providing clarity on what success looks like.
But can performance management actually change behaviour and improve employee performance?
Performance management isn’t a stand-alone HR Practice, implemented in isolation.
Performance management should be:
- Integrated with strategic and operational objectives;
- Transparent, equitable and effectively communicated;
- A mutual understanding of performance and success at individual, team and organisational levels;
- An opportunity to link organisational and individual goals;
- A value-add activity that improves motivation, engagement, performance and behaviour.
With organisations willing to be transparent and share their success, the temptation exists to simply take what works for one organisation and implement it expecting the same results. Research, however, indicates that simply doing this without considering context, performance culture and engagement is unlikely to result in success.
With increased globalisation and multinational corporations becoming the norm, national culture is also critical consideration, as the same approach to performance management may not have the same outcome across different employee groups who may have varying expectations. Organisations can have in place best in class performance management, and it will still be ineffective, not result in improved employee performance and possibly be considered an outright failure if it is not fit for purpose.
So, what do organisations need to do to ensure that performance management is effective?
Performance management should be a clear and consistent process that enables both leaders and employees to understand what is expected of them. In order for performance management to change behaviour, it needs to be implemented in a way that focuses employee motivation to not only improve individual performance but to also achieve organisational objectives, so linking individual performance to organisational goals is essential.
The five key steps to ensuring that performance management is effective and results in positive behaviour change are:
Leaders effectively setting expectations for employees is key to providing a solid foundation for performance management. A conversation clarifying skills, abilities, capabilities and role requirements creates a mutual understanding of job success.
Once expectations are clarified, leaders and employees should collaboratively develop specific and challenging goals, incorporate measures and metrics, create an understanding of goal success and identify any issues or challenges that may arise. Goals should be meaningful and relevant to employees, be within their scope and influence to achieve and link to organisational objectives.
Employees should be clear on how performance will be measured, how reviews will occur and what information will be used to assess progress and achievement of each goal. Reviews provide leaders with information not only relating to goal progress, but also how to get the best performance from employees and what development or support might be required. Encouraging employee participation through self-assessment and multisource feedback results in a more meaningful experience for employees and a greater likelihood of performance improvement and behaviour change. The value of feedback is often underestimated, however when constructively incorporated into conversations can improve motivation and performance.
While formal appraisals occur at set points in time, regular and informal feedback enables and encourages employees to change performance and behaviour more readily. Feedback enables leaders to discuss targeted changes and identified support and development options to improve performance. Two-way feedback conversations can result in leaders obtaining insight into employee’s knowledge, skills and abilities leading into career progression and succession planning.
An employee’s performance and behaviour results in a discussion relating to rewards (pay increase), development, promotion, succession or it may result in remedial performance management. Effective performance management provides leaders with the opportunity to recognise and reward employee’s performance and behaviour, leading to reinforcement of required behaviours for individual performance and alignment with achieving organisational outcomes. While a leader should consider what the appropriate outcome is for the employee, they should also consider what motivates the employee and how this can be leveraged to further encourage motivation or behaviour changes.
Performance management doesn’t have to be scary. Regular conversations about goals, progress and development create a sustainable and proactive approach to ensuring employee success and create continuous positive performance and behaviour change.