Modern Day Performance Management

Strategy and Business's Organisation and People blog recently featured a post by Susan Cramm reflecting that, while many areas of leadership thinking have advanced in the last 20-30 years, for many organisations the approach to performance management is still a throwback to the 1980s

Employment isn’t what it used to be and it’s not what it should be. Reid Hoffman said it right, “You can’t have an agile company if you give employees lifetime contracts—and the best people don’t want one employer for life anyway.  But you can build a better compact than ‘every man for himself.’”

A new compact needs to be forged that’s win-win, one under which employees provide skills that build businesses and employers offer experiences that build careers.  A key element to making this shift is changing the focus of the annual performance review process from a backward-looking, narrow perspective that answers, “What have you done for me lately?” to a forward-looking, productive conversation that asks, “How can you contribute to the company, and how does this benefit your career?”  And when the “gives” don’t synch up with the “gets,” it’s time for direct, grown-up talk that allows each party to get on with their lives.

There’s broad agreement that the traditional performance-management approach, (courtesy of  GE in the 1980s) has outlived its usefulness. According to research from advisory firm CEB, “two-thirds of employees who receive the highest scores…are not actually the organisation’s highest performers” and “conventional reviews only generate a 3–5% increase in employee performance.”

The field of neuroscience provides wonderful insights as to why the current system generates lots of paperwork but little progress. According to David Rock, the problem is that the traditional approach fires up a threat state in the brain and limits a person’s ability to hear messages. The traditional approach to performance management, where the leader acts as judge and jury and does all of the talking, evokes a defensive reaction where feedback is rejected and current behavior is rationalised. 

In contrast to this 'outdated' approach, the definition FranklinCovey uses for leadership is that the role of a leader is to 'recognise and affirm the potential in people such that they come to see it for themselves'. To enable 'modern day' performance management in this context, we then provide input for leaders to work on some key mindsets and skillsets. 

• At a mindset level, we distinguish between leaders who look to supervise, control and direct and those who look to unleash talent and to help people 'find their voice'. (In applying these mindsets to performance management, we also distinguish between telling people how they need to do things and creating clarity on key outcomes to which people can be held accountable and towards which the leader can help to 'clear the path'.)
• These mindset shifts can then be supported by complementary skills of giving and receiving feedback and being able to mutually explore desired outcomes, with additional inputs such as 'win-win performance agreement', 'voice finder' and 'Q2 role statement' tools also available.