Everybody is talking about it. What are you doing about it?
Performance management has lost relevance in its current format and needs to be thought about differently. Performance management, as we know it, presents retrospective historical data representing a lag on impact on performance data; damages employee engagement and alienates high performers; fosters internal, rather than external competition; and does not effectively align people with the values and strategic goals of an organisation.
Deloitte Touche Tohmatsu(1) conducted a 2014 public survey and reported that over half of the respondents (58%) said that the performance management process is not an effective use of time, in their organisations.
In their recent journal article(2) “Reinventing Performance Management” Marcus Buckingham and Ashley Goodall highlighted the need for change and the steps followed in redesigning the approach to performance management internally at Deloitte.
The case for change was evidenced when Deloitte reported its own internal data:
“Specifically, we tallied the number of hours the organization was spending on performance management – and found that completing the forms, holding the meetings, and creating the ratings consumed close to 2 million hours a year.”
The lessons learnt from this data analysis motivated Deloitte to move the investment of time from talking about themselves and their personal ratings, to start talking to their people about their respective performance and careers with a “focus on the future” objective.
Deloitte achieved this “focus on the future” objective, in part, by designing and piloting an internal system based on the high levels of frequency that their best team leaders conducted check-ins with their respective team members. Encouraging brief frequent conversations at Deloitte allows their leaders to review progress against priorities, determine and set expectations for the upcoming period, and provide coaching where required to team members.
At the People Insights Group, we recognised early on it is more effective to engage employees in meaningful frequent conversations and gain their commitment and accountability through trust and mutual respect, and not just with an arbitrary ratings score.
People Insights Group is a HR software and consulting company that enables medium to large-sized organisations to reinvent the way they think about performance reviews, by providing a holistic framework that increases employee engagement and motivation, and which ultimately improves business performance.
About Gary Morgan
Gary Morgan, is Founder and CEO at People Insights Group, Managing Director at MPT Innovation Group and Adjunct Professor at Queensland University of Technology.
2: Buckingham, M and Goodall, A. Reinventing Performance Management. Harvard Business Review. April 2015. Retrieved from https://hbr.org/2015/04/reinventing-performance-management