What We Can Learn From Companies Revamping Performance Management

Traditional performance management processes have come under fire for being outdated, time consuming, and ineffective.

Rather than contributing to the success of the company, performance management has been criticised for putting an unnecessary burden on HR, eating up managers’ valuable time and resulting in de-motivated employees.

HR professionals and managers have been crying from the rooftops — “Why not scrap performance management altogether!”  While old practices may not be working as intended, let’s hold fire on scrapping performance management for just a minute and take a closer look at what’s really going on.

Only 8 percent of companies believe performance management is producing real value for their organization, and 58 percent believe it’s not an effective use of time, according to a report from Deloitte.

When considering those figures, let’s not overlook the 42 percent that do believe performance management is an effective use of time.

Under the microscope

Each company needs to put its performance management processes under the microscope. As TLNT contributor Margaret O’Hanlon rightly noted, we need to change our mindset and think about how we can make performance management work for each organization.

What’s driving performance and what’s not? What can we learn from top companies who are doing things differently?

Top companies, including Adobe, Microsoft, Accenture, Deloitte and General Electric, are just some of the organizations who have reevaluated their internal performance management processes and are implementing changes to tackle flaws in the system.

Accenture and Deloitte in particular decided to take a more employee-centric approach to their performance management, and took measures to implement a system which uses ongoing coaching and in-the-moment feedback. The idea is that this kind of management will benefit employees and prevent performance management from being seen as a stagnating HR process.

Ongoing coaching and in-the-moment feedback has also been adopted by General Electric, who went all out and scrapped their vicious and outdated “rank and yank” system in which managers ranked their employees and penalized the bottom 10 percent.

Likewise, as Juliana Stancampiano pointed out in her article on humanizing performance management, HGST also decided that performance ratings were a negative exercise. They removed their generic performance scores and adapted a coaching style strategy as well.

A future-focused approach

With 70 percent of employee learning and development happening on the job, both ongoing coaching and in-the-moment feedback have been heralded as effective management strategies by a number of companies. However, they’re not the only processes coming into action.

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General Electric has been quick on the uptake of performance management software. GE uses a feedback app which acts as an online notebook for managers and colleagues to give feedback and provide comments for other team members. Other companies are using software to simplify their administrative processes and save human resources valuable time.

Other aspects of performance management that companies are looking at are aligning objectives upwards with company goals, implementing employee development plans based on data extracted from performance management software, and taking a forward looking approach to performance reviews.

Ellyn Shook, Chief HR Officer at Accenture, stated:

Rather than taking a retrospective view, our people will engage in future-focused conversations about their aspirations, leading to actions to help them grow and progress their careers.”

Turning over a new leaf

In 2015 alone, it’s been cited that at least 52 major companies have implemented new performance management strategies. However, according to recent research from Towers Watson, less than 10 percent of companies have decided or plan to get rid of performance management. A higher percentage (30 percent) are considering scrapping performance ratings.

When Adobe made the decision to rework their performance management back in 2012, they spent months brainstorming strategies and obtaining feedback from employees before implementing their current performance management system.

Deloitte is still in an experimental stage, and the company is currently piloting a new performance management program and a more simplified version of a performance review meeting.

Let’s take a page out of their book. The take-away here is that companies aren’t culling performance management altogether, but that they are evaluating and updating their processes in line with the needs and values of their company.

Stuart Hearn is a leading performance management specialist who has been working in the HR sector for over 20 years. He is passionate about moving performance management forward and is currently CEO of Clear Review, an innovative performance management software system. He previously worked for Sony Music Publishing and was a co-founder of PlusHR.

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