The Annual Performance Review is over. So what next? Is it going to be the same routine of never-ending performance reviews annually? Every year the goals are the same: accelerate growth, reduce employee turnover, and so on.
The big question – Does this serve any purpose, or is it just another compulsory annual ritual to be carried out?
Performance management reviews often create frustration for many employees, especially those who do not know what is expected of them at work or how can they align their work with the organisational goals. For such employees, the whole concept of performance management and annual reviews seems artificial and enforced.
A 2014 study by Deloitte showed that only 8 percent of companies feel their performance management processes drive a high level of value.
And a recent Corporate Executive Board survey showed that:
- 95 percent of managers aren’t satisfied with their organisations’ performance management processes.
- 90 percent of HR professionals don’t believe their companies’ performance reviews provide accurate information.
- 66 percent of employees say the performance review process interferes with their productivity.
Indeed, conducting the traditional performance review once each year is more time consuming, complicated, and disliked by managers and employees alike. Furthermore, it is futile for the employee to wait all year long to hear the feedback towards the year-end. Another aspect to be noted is that performance management, when not done in the right way, can result in lower employee engagement and productivity.
This does not mean that the entire concept of performance management is dead but the old approach to performance management definitely is! With the joint efforts of managers and employees, one can find new alternatives to the traditional method and establish ongoing performance management. Employees need ongoing feedback, training, direction, and coaching to make this new approach a success.
The ideal solution would be to take a proactive approach to performance management. Effective performance management of the workforce focuses on aligning the goals of the organisation with the individual employee goals, improving employee performance, helping in employee development, and finally bringing in better business outcomes. This has to be done all year round and not as a spot treatment.
So, instead of trying to consolidate a whole year’s feedback into a single, one-time annual review, why not break up the performance management goals into smaller manageable chunks spaced equally throughout the year. This will give some breathing space to the managers and employees alike and make the goals more manageable and achievable.
There are many ways to transform the old-fashioned annual performance management system into a constructive and consultative process that is more meaningful and valuable. Here are some tips:
How to Ensure Performance Management as an Ongoing Practice and Make it Truly Future-proof?
Here, we have put together a list of easy steps that you can follow to achieve this:
Setting Regular Goals
Why does an employee need goals? Goal setting is essential to align an employee’s individual goals and work towards the larger organisational goals. This will provide a better pathway for the employee to work, driving better performance, and enhanced employee engagement. For this to happen, it is imperative to set big goals at regular intervals.
Front-line managers must not only set efficient goals but also align the employee’s work towards such goals and track whether they are being met, at quarterly intervals.
It is important to conduct regular meetings and put goal tracking on the routine agenda of such meets. Train managers to make ongoing notes on goals, their achievement, and initiate check-ins if goals are not achieved. Also, make the goals flexible enough to adapt to fluctuating business conditions and include scope for changing deliverables that could extend beyond the present job profile.
Continuous Coaching and Feedback
Managers must recognize the importance of employee engagement by incorporating it into the company culture and coaching employees accordingly. Furthermore, they must be trained to give continuous coaching and constructive feedback.
The top management must perceive feedback as a productive way to enhance performance. Hence, it is better to get performance feedback from multiple sources at different points in time rather than doing a review towards the end that recalls only the previous month’s performance. For instance, assess employee performance by collecting information from peers, managers, and front-line colleagues who deal with the employee on a day-to-day basis and also from customers. Much information can be crowdsourced from the front lines of the business.
A continuous feedback policy will help to create a culture of constant improvement and ongoing employee development. This will further enhance the career prospects of the employee.
Streamline the Review Process
While conducting a performance review, ensure that the discussion is made simple and easy for employees and that managers are given the tools required to conduct the review in a free and fair manner. Also, you must review performance factors like individual factors, group factors, and factors across the company. Then you must map them to multiple performance metrics like revenue, market, sales, and profit. Be careful about incorporating hard to quantify items like employee discipline, smartness, and creativity.
Allow for Employee Participation through Self-Appraisals:
Employee self-appraisals must be formatted in such a way that an employee gives an honest account of his/her performance and areas of development in the future. Self – appraisal acts as a remedial measure to counteract the ‘single point of failure’ hazard that exists in the present manager centric system.
Additional Input Measures that Can Improve the Traditional Performance Management Process:
- Maintain the manager’s accountability for performance.
- Retain the strengths of the traditional performance review while at the same time trying to plug-in new enhanced features in a parallel way. This means that the traditional performance management system should not be uprooted in order to bring in the new system, rather the foundation of the conventional system should be retained with all its strengths while at the same time bringing in new features that will help to fix the flaws of the traditional method.
- For instance, social recognition, wherein employees praise and award each other for excellent performance, can be taken into account while conducting reviews, and this will also help alleviate the shortcomings of a one-person centric traditional review.
Ensuring a future proof performance management system for your organisation does not involve a radical substitute. The need of the hour is to balance traditional performance management systems with new methods such as social recognition on an ongoing, day-to-day basis. Thus, a combination of formal one-to-one traditional performance management reviews with many-to-many social reviews will enable the establishment of a robust performance management system that is truly world-class!