These are the thoughts and takeaways from the latest Talent Think Tank held on Thursday 10th September and hosted by Telefonica’s Kristine Taylor (HR Consultant – Programme Delivery) and Kate Whelan (Head of Reward & Pensions). This Think Tank sought to discuss approaches to “Embedding an effective performance management strategy”.
The following summary has been prepared to reflect a segment of the discussion held amongst senior Talent professionals from leading national and international businesses. Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.
Performance management is an increasingly popular topic in today’s workplace. Business pressures are ever-increasing and organisations are now required to become even more effective and efficient, execute better on business strategy, and do more with less in order to remain competitive.
Taking this into account, how can businesses adopt and prioritise an effective and successful performance management strategy ?
The key aspects to consider:
Be clear about what performance management is and why it’s important. Start with the end in mind. Why is performance important? What does this mean on an individual level? Are we using it to get rid of low performers or are we trying to help our employee’s be the best they can be? In our attendees view, the system should be about recognising ‘good’ and ‘great’ performers versus focusing obsessively on under-performers. In addition performance management should be viewed as a developmental tool – ie it is about getting you to the right place and there can be a whole host of reasons for that.
Expectations. The Importance of clear expectations in terms of standards, objectives, and results is fundamental in terms of the success of performance management. From an employee’s perspective knowing the expected standard (and why) helps build purpose into people’s work and underpins performance management.
Link performance to rewards (and not necessarily just money). It’s important that our work environments are focused on results and that in turn this leads to rewarding those that consistently deliver against their objectives. That said, as Dan Pink describes in his book ‘Drive’ reward does not always mean monetary reward. Dan argues that money is a ‘hygiene factor’ and whilst undoubtedly important; individuals are driven by autonomy, mastery and purpose. Arguably therefore performance should be linked not only to monetary reward but also to a greater opportunity to explore autonomy, mastery and purpose.
Don’t over-complicate the process! Technology should be an enabler as opposed to your master – it shouldn’t be so unwieldy that it ‘switches people off’. If it isn’t simple – don’t use it, do something else!
Performance should be an ongoing conversation – not a once a year or bi-annual chore. Think of these as more ‘dynamic reviews’ where your managers are getting tangible return on investment by being close to their teams and having continual dialogue. This is much more likely to uncover reasons for underperformance more quickly and improve a manager’s understanding of their team.
Encourage managers and individual employees to take ownership for performance management. Responsibility for objectives and outcomes can only truly be effective if owned and set by the individual. Clearly the ‘why’ needs to be highlighted – and a (consistently) communicated movement towards ‘mastery’ (comprehensive knowledge or skill) championed.
Don’t forget behaviours! Whilst objectives are extremely important, performance management should also take into context recognition for individuals acting in a way that is coherent with company values. Ultimately – “what are you doing but also why are you doing it?”
Allow flexibility in how those values are assessed – different parts of your business will undoubtedly interpret values in slightly different ways. For example your risk team may decide to implement a corporate value of ‘disrupt’ in a very different way to your marketing team. It’s important that managers and individuals understand the context behind your corporate values and ultimately what great behaviour may look like in order to keep a values based approach at the forefront of employees minds.
Managers are the key! A crucial part of the process is the way in which your hiring managers are supported by HR. How many of your hiring managers have received training on these critical performance management skills
- Asking open questions
- Giving honest feedback
One particular Think Tank member gave some fantastic context around the work they’d done in conjunction with their L&D team to develop a suite of training support for managers. Alongside the more traditional training approach this organisation also championed: comprehensive ‘best practice’ videos on their intranet, encouraged employees to use systems to continually upload achievements and share praise and published humorous videos in company communications to raise awareness of the importance of performance reviews.
Performance VS potential – Performance is interesting, but future potential is very interesting and should be much more of a focus. Who are the people in your business that have untapped potential? Therefore ensure your performance reviews aren’t just filed away in a ‘tick the box’ exercise – but are shared, discussed and consistently referred to by managers. This is especially important when looking to drive internal mobility to counter an obsession with external hiring.
Don’t ignore underperformance! – Consistent underperformance is unacceptable. This message should be conveyed clearly to your employees and a roadmap of measures to tackle this (in as positive way as possible) should underpin your performance management strategy.
Who should sit where? Should there be an ‘expected’ or ‘target’ curve of where performance should sit? Whilst tempting (especially from a reward perspective), performance should not be influenced by a statistical desire. More important is a consistent calibration of the levels being given and reporting against that. This then enables the business to embrace measures to improve performance and (hopefully) drive a genuine improvement (which can then be evidenced). Consistent calibration of level can also help a temptation to ‘drop’ employees in the middle to make it easier?
Preparation is key – encourage your managers and employees to take time out to prepare for performance discussions. Both the manager and the employee should know what they are going to talk about BEFORE a review; negating the temptation to ‘wing it’ for the sake of ticking the box. Ensure therefore it is ‘ok’ to take time out of the day job to prepare and again positively reinforced in the culture of a business. In addition, encourage an employee to ‘self-assess’ against their objectives (and values) to provide a manager with an insight into how the employee views their performance prior to that meeting.
Good is good! Use of language is hugely important and it is really key that employees are not disappointed by achieving anything less than ‘great’. As always, communication is key. Therefore ensure good performers are well praised and left feeling inspired to continue achieving ‘good’ and push for ‘great’.
What number of ratings should you have? A recurring theme in performance management discussions is around whether companies should use a 4 point scale, a 5 point scale (or something else). The obvious question is “does it really matter?!” Whilst undoubtedly some truth in the evidence of statistically what happens on those respective scales (i.e. people loading in the middle or just above middle) the general consensus was that to a large degree it is actually irrelevant IF Performance Management has been correctly implemented. The caveats being that you need to be really clear as to what level = what performance and dial in the aforementioned points.
Mastery is an asymptote – You can approach it. You can hone in on it. You can get really, really, really close to it. But you can never quite master it.
Performance management is a deeply personal issue for an employee and can have a huge impact in terms of performance, motivation and happiness. Having a clear performance management process that is simple, easy to use, consistent and fair is therefore really critical for business success.
That said, the key message from this Think Tank was that Performance management does not have to be ‘perfect’ and a ‘silver bullet’.
It should be agile and develop consistently. In essence it’s all about consistently improving and tweaking in the pursuit of ‘mastery’.