Despite so much talk about how ineffective and counter-productive performance management is in its current form, there's few organisations who seem to have nailed getting it right. But why?
Organisations are tinkering around the edges of performance management (e.g. changing the forms, modifying a rating scale etc.) without really addressing the root cause of its lack of impact on performance and productivity. But as we all know, doing the same thing over and over again will generally yield exactly the same results.
Or, companies are abolishing their performance review process but without a clear plan on what or how they will do differently in its absence.
So what can you do now to make your performance management approach awesome?
Here's the five critical things to get moving on:
1. De-couple the explicit link between performance management and pay
The explicit link between performance management and pay is one of the major underlying causes of bureaucratic and ineffective performance management processes and associated distrust.
Where people's pay rises or bonuses are at stake, an organisation typically ends up designing a performance management process that covers ridiculous amounts of detail and process to try and ensure that it's defensible and applied consistently to all. Unfortunately, this is usually a lowest common denominator form of consistency.
A performance review often becomes a counterproductive negotiation or a debate about whether the person 'is' a '3' or a '4' rather than an honest and constructive conversation designed to fuel a person's performance.
So decouple the explicit link between performance management and remuneration to restore trust and enable people to focus on what it's really about.
2. Invest heavily in developing managers' capability to coach and provide feedback - and hold them accountable
All this tinkering around the edges makes no difference if we fail to address the fundamental deficit in performance management - managers' willingness and ability, or lack thereof, to play their role as people leaders.
To turn things around you need to heavily invest in educating your people leaders about the importance of their role and help build their capability to provide role clarity, feedback, and coaching to their people.
I keep reading that a recent 'trend' in performance management is having leaders providing regular/continuous feedback and coaching to their team members. That isn't a trend - that's always been a manager's job!
After having supported your managers to provide day-to-day leadership for their people, there's no excuses for them not doing so. Managers need to be held accountable for and rewarded for their people work. Those who refuse to or can't fulfil their people leadership accountabilities are in the wrong role and probably in the wrong organisation. Over to you senior leaders.
3. Abolish the annual performance review and cumbersome paperwork
Okay okay, we know that all the cool kids of the world of work are now abolishing annual performance reviews, but with good reason. If you have taken steps one and two why would anyone need an annual performance review and cumbersome forms and paperwork?
Well you wouldn't need an annual review, because feedback, coaching, and development would be happening on a daily basis - supplemented with regular one-on-one catch ups to review how things are going, plan ahead and focus on the team member's career development.
The act of abolishing annual performance reviews would send a powerful signal to your organisation's people that you're committed to a new and better way of performance management.
4. Shift the emphasis from individual to team performance management
Most people espouse (and rightly so) that teams and teamwork are critical to business success. Why then, is performance management so individually focused?
Individual-based performance management promotes a 'me first' rather than 'team first' mentality. Have you really succeeded if you have achieved your own KPIs while others in your team haven't? And how well aligned are the individual KPIs of members of a team to the overall team objectives?
To promote teamwork and high performance, ensure that your team has very clear, shared and visible objectives and desired behaviours. Then regularly review progress and refine what you're doing - together.
Of course there's still a crucial place for one-on-one feedback and coaching, but in the context of your role in the team and how you're contributing.
5. Call it something else
We desperately need a new name for performance management as its brand and reputation is so sullied as to render it toxic. But if you are taking the four steps above it's not the performance management that most people know and think of when they hear that term.
And in fact, it's almost a misnomer - can you really manage a person's performance? Not really, but you can enable, engage and support a person to perform at their peak - which is really performance leadership.
What would you call it?
So what are you waiting for? Make your performance management, well your 'un-performance management', awesome right now. Break the cycle of distrust, bureaucracy and cynicism and take steps now to do it differently. It's time to actually kick some goals through performance management.
What's your first step going to be?