The complaints against performance management are consistent: it’s time-consuming for managers, demotivating for employees and rarely produces the business outcomes it needs to. The criticism is clear, and while it’s less obvious what the future of performance management should be there’s a strong argument to be made that simply tweaking our current system won’t work — a bigger transformation is needed. It is implausible to magically transform your entire performance management system, but there are some simple steps you can take to ensure it delivers on its most important job — improving employee performance. Here are Saberr’s 5 steps for better performance management.
“Performance Management must become part of the work itself — culturally intrinsic and seamlessly embedded.”- Kathi Enderes
1. Think about performance management as three distinct areas of activity
Appraisal: An annual review that seeks to link compensation or other extrinsic motivators to benchmarks for the individual’s role and responsibilities.
Goal management: The dynamic process of ensuring the goals that are set are continually updated to meet current business needs and a changing external environment. This ‘agile’ process of setting goals, often using OKR’s (objectives and key results), is a great way to give teams autonomy over their tasks whilst ensuring alignment with organisational objectives.
Coaching conversations: Regular forward focused developmental conversations looking at intrinsic motivators. Decoupling the conversation between how an employee is performing and the compensation they receive is key for developing their performance. It ensures that employees can strive or push for more ambitious goals safe in the knowledge that if they fail, it’ll be treated as a learning opportunity rather than a traditional ‘performance review’.
2. Start developmental coaching conversations
The fast paced business landscape that we exist in today means that there is an increased need to adapt and evolve quickly. A recent study found that the average lifespan of companies on the S&P 500 in 1964 has narrowed from 33 years to 24 years in 2016 and is forecast to shrink to just 12 years by 2027. This reflects the increased need to adapt quickly in order to succeed. Although company strategy is normally set from the top down, allowing teams to set their own goals in line with company goals gives organisations the opportunity to balance autonomy with accountability, which is critical for agile working. Creating a culture that empowers employees to set their own goals encourages them to make their own decisions, which allows teams to adapt quickly to changes in the business landscape.
A great way to help create this culture is through starting regular developmental coaching conversations in which your team reflect on both the positives and negatives of the last period of work in order to make changes for the next period of work. This allows your team to realise on their own what they need to improve on and what they are excelling in. After working this out they can set their own achievable goals that they are intrinsically motivated to achieve, more accountable for and therefore more likely to achieve.
In Saberr we use retrospectives as a reflection exercise that provide a simple, easy technique to coax valuable improvements from a team. Used regularly, they help teams uncover the good (potential improvements, positive working methods) and the bad (sticking points and problems), which helps keep the performance discussion balanced and ongoing throughout the year.
3. Coaching conversations must happen for individuals and teams
“Teams do not improve markedly even if all their members receive individual coaching to develop their personal capabilities”- Ruth Wageman
Recent PEW research shows that the growth in jobs requiring a high degree of collaboration is double that of occupations requiring average levels of collaboration. Companies are responding to this need, as one influential report indicates that team coaching is on the agenda for 47% of organisations. Individual coaching can help individuals become better leaders but it often does not improve the team as a whole. Examples of individual and team coaching working well in tandem can be seen in sport, for example from Sir Clive Woodward, England’s Rugby World Cup winning coach. His formula for success was about creating ‘champion individuals’ and a successful culture. By coaching the team, as well as the individual, he created a framework for success that allowed his team to thrive individually. Yet in business there still seems to be a need for more coaching conversations at the team level.
A team has to have strong foundations. Therefore the starting point for team coaching is often defining your team purpose, team goals and team behaviours. While this is tougher than in a sports team in terms of purpose and goals, it is an invaluable experience for business teams. We encourage teams to use our digital coach, Saberr, which guides them through short sessions that helps define their purpose, goals and behaviours.
4. Ensure performance discussions are aligned with business context and strategy
The way you manage performance discussions is all about your company’s specific business context and strategy. For example if you are a smaller company whose focus is high growth, you might seek to develop talent more and place less emphasis on performance ratings. On the other hand, a company focusing on efficiency savings and cost reduction might focus more on measuring performance than developing performance. There is no one size fits all for how you should be managing performance!
5. Make it easy to coach
Making coaching an effective use of time is about weaving it into our day and making it part of work rather than separate from it. Having regular, productive coaching discussions helps us work out what is important and how to focus our time on those tasks. Effective coaching conversations help break down the key elements of coaching and attach them to specific tasks, which creates an ongoing discourse between employee and manager throughout the year. This regular discourse means that there is no unnecessary anticipation of the dreaded ‘review’ and managers can nudge their employees gently in the right direction depending on priorities.
This is where Saberr comes in. Saberr gives you a basis for your coaching conversations to make sure they are rewarding. By creating regular coaching conversations with teams and individuals, based on agreed goals and values, you can make sure there are no surprises in the dreaded annual performance review. And that can take at least one stress away from our already stressful enough holiday season!