Making performance management positive

Most organisations have put in place elaborate performance management systems in the hope of improving individual performance, and in turn overall business performance. However, many of these systems have developed a life of their own, consuming enormous amounts of resource. 

Most organisations are finding that their performance management systems fail to deliver the intended improvements. Only 20% of HR professionals are confident that such systems positively impact individual performance[1]. Staff and managers often find the work involved becomes an administrative, even burdensome, overhead. As a result, performance management can have a negative effect on individual performance, employee satisfaction, and ultimately employee retention.

By focusing on strengths and key skills required for future success, organisations can create a more engaging, constructive and positive performance management system to better support their employees and business strategy.

Positive performance management

Some companies are already achieving better results by re-focusing performance management on strengths. Individuals learn from their experiences and share their learning with others, while the organisation finds out about the strengths of its workforce, and identifies gaps needing to be filled.

If you use performance improvement techniques continuously instead of rating staff periodically, you improve both employee satisfaction and corporate performance. Research shows that developmental conversations generate 150% more return than performance assessment, and almost 200% more return than ‘pay-for-performance’ processes.[2]

Build on what you have

Existing performance management systems should not be simply disregarded. However, organisations should strip their systems back to essentials and shift the focus from appraisal to improvement – from the past to the future.

1. Put appreciative dialogue at the heart of performance management

Aim to develop people to their full potential. Liberate managers and teams to have a regular, informed dialogue about skills, contributions and potential. Forward-looking, positive conversations should explore people’s strengths and unlock the emotions of pride and loyalty. Managers will need to be equipped with the requisite coaching skills.

2. Establish a guidance system

Performance management needs a guidance system comprising purpose, objectives, values and competences. It will help individuals to align their contribution and create continuity from past successes to future visions. Everyone should know what is expected of them, individually and collectively, and how those desired outcomes align to the business’s values and the needs of its customers. Goal-setting should become a dynamic process that keeps up with changing organisational and individual needs.

3. Deliver a positive experience

Reduce bureaucracy and eliminate imprecise arithmetic methods that are seen as unfair. Adjust language to be development focused and team oriented: avoid labels like ‘superior’, ‘satisfactory’, ‘inadequate’. Where performance is low, identify the reason and respond appropriately. Move away from a model where the manager drives the process and towards one where the individual owns it and works with the team to use it.

A self-improving cycle

Get performance management right and it can engender a self-improving cycle. Though it does require a significant cultural adjustment, the change need not be disruptive or expensive. By tidying and simplifying the systems and processes that they already have, companies can spend less time on appraising and more on improving.

To find out more about how PA can help create positive performance management for your organisation and how to get your organisation fit for the future, please contact us now.

[1] ‘Performance management in action’, CIPD, November 2009.

[2] Research by MetrixGlobal LLC in 2001.