Maybe It’s Time To Develop a New Performance Management Mindset

Some 60 percent of companies are in the process of rethinking their approach to performance reviews, according to Forbes.

This percentage is high, even though this anti-performance review impulse to “burn it to the ground” becomes popular on a regular basis in our industry. There are a couple of new reasons why change makes sense this time through.

We are working differently now than we did 10, or even five, years ago. As the Forbes article mentions:

… In today’s fast-paced knowledge economy — with clients and employees alike expecting things in real time — a once-a-year check-in just doesn’t get the job done.”

Talk about alignment with your culture! Talk about bringing your brand inside! If your performance management practice is a text-heavy once-a-year process, look around while you’re passing out the self-appraisal forms, because you are in some historical period drama where you’ll find people talking about their favorite CDs and how cool Hummers are.

People WILL give more with the right mindset

Plus, there is growing social science research that indicates our traditional approach to rating, ranking and performance feedback squelches the impulse to learn and grow in the people who might benefit the most — those in the middle, who I wrote about recently.

People can and will give more, research suggests, if they have the mindset to do it. But just like in school when you thought of yourself as a “B” student, thinking of yourself as a “meets expectation” sort of team member means that you will likely self-limit your performance.

performance reviewIn short, the way we have been going about performance management is often blunt, baseless and counterproductive, when what we should be shooting for is elegance. An elegant solution is one in which, “the maximum desired effect is achieved with the smallest or simplest effort.”

We need a new mindset, if you ask me — and an elegant one.

But, recognize that an elegant solution will rarely involve revolution — even though the press on Accenture, The Gap, and so on says that everyone should fall in line. And an elegant solution will rarely involve finding the “right” online system, either. But, it will involve the patience to find out where real change will have a real impact that delivers what your company and employees’ need.

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Time for a new mindset

As we move into the performance review season for many organizations, why not shoot for beginning to develop a new mindset? Instead of obsessing about deadlines, why not calm down, look around and find out what parts of the company seem to be profiting in any way from the performance review process.

Go over, take a look at what’s going on. What are they doing, how and why? How are employees and managers talking together? What do you learn that you can you build on?

Employees want, expect and need feedback. Your company will do better when employees understand how to do their best.

If, psychologically, a “meets expectations” rating coupled with a 2 percent increase freezes people up — but that’s the system you have right now — figure out what you (via your managers) can do differently once all the end-of-year hoopla is over. Start innovating in January and don’t let yourself stop innovating until you’ve found your, your employees’ and your company’s elegant solution.

And here’s a great hint to get you started, from a Deloitte manager who is working with a “new era” process:

In effect, we are asking our team leaders what they would do with each team member rather than what they think of that individual.”

This was originally published at the Compensation Café blog, where you can find a daily dose of caffeinated conversation on everything compensation.

Margaret O'Hanlon is founder and principal of re:Think Consulting. She has decades of experience teaming up with clients to ensure great HR ideas deliver valuable business results. She has worked with early-phase and Fortune 500 companies, as well as universities, non-profits and local firms. Before she founded re:Think Consulting, Margaret was an Principal in Total Rewards Communications with Towers Perrin. Contact her at mohanlon@rethinkconsulting.com.

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