TTT - Performance Management: Creating an Effective Process and Dialogue
Contributed by the Talent Think Tank, founded and facilitated by Oasis HR
May 16 2013 - Developing an effective performance management process is crucial for a number of reasons; namely the direct financial gain from ensuring employees are successfully meeting expectations, for generating motivation and engagement amongst the workforce and for aligning employees to strategic objectives. So, how can you differentiate between high and low performers, secure true engagement from managers, ensure process compliance and create that all important dialogue around performance?
Has HR created a monster?
One of the main drivers around creating an effective performance management process is reaching that utopian point whereby quality conversations are once again occurring between managers and employees. However, are we now so concerned with wrapping the process in a 'flashy coat' that we have ultimately created a scary monster that managers run screaming from? When it comes to compliance, it seems that the IT system is generally to blame for failures to follow through with the task. Perhaps we have over complicated the process with confusing technology and hidden the benefits within HR jargon. Did we have this level of disengagement when things were done on paper? Getting back to basics and revisiting why you want the process in place is a good way to start stripping out any unnecessary elements.
What do your Employees Want?
If you have the luxury of working in a relatively small organisation and/or operate a remit where you are able to rejuvenate your performance management process, then holding consultation with various working groups is definitely advisable. Take the time to understand what your employees want to gain from the process, in order to create a tailored / appropriate solution that is going to meet their aspirations. Case studies have shown that the end process is much more effective as it has been invented by the people benefiting from it. Moreover, compliance is generally better as any problems that arise can be batted back to employees to propose an alternative solution.
For most employees, simply knowing that they have the opportunity to have structured and timely conversations with their managers is a great engagement booster. Ensuring that the process is transparent, deemed fair and that expectations are set upfront from the perspective of employees is paramount.
Ensuring Managers' Compliance
So, how can you ensure managers appraise consistently and don't deviate from the process? For the most part, it tends to be around mind-set. If managers don't see the value in your existing process then they are unlikely to follow it. As stated before, make sure all stages are really necessary and managers understand the importance of seeing it through in its entirety. It's also important to factor in a degree of flexibility, whilst balancing the consistency of the process across the whole organisation or Group. Setting consistent policies globally and then tweaking them on a local basis tends to work most effectively from a compliance and monitoring perspective. Finally, ensuring that your managers have the skills to deliver the process effectively is crucial.
Up-skilling your managers
As a business, you might have the most robust performance management process, but unless your managers posses the skills to hold meaningful conversations, it's in danger of becoming redundant. More often than not, businesses don't have HR Managers on tap to offer assistance during the appraisal process, so up-skilling your people managers is crucial. Often it's beneficial to do this with external experts, but it can be equally effective to hold internal training such as 'HR for Non-HR Managers'.
Within many businesses, it's occasionally even the most senior managers who lack the skills to deliver bad news, remain objective and hold meaningful dialogues. In this circumstance, holding debate sessions on performance management followed by one-on-one coaching is reported to work incredibly well for developing these skill-sets amongst senior employees.
Regardless of seniority, using a tool called 'scenario directing' can be incredibly powerful; whereby actors work with your staff to practice the dialogue and highlight the effective and ineffective elements of performance conversations. These scenario directing activities are conducted following an initial training workshop, and allow managers to pause, stop and rewind the actors' simulated conversations to arrive at a desirable outcome. This training solution caters to all learning styles through the initial training workshop and the more interactive element of the role play.
Embedding an Objective Process
Introducing a system which can be easily replicated regardless of who is conducting it is essential for ensuring objectivity. If you operate a scoring system, it doesn't much matter whether you score from 1-5 or 3-1, what's important is that managers feel comfortable with the definition of each rating and can justify their allocations. Ratings have to be calculated based on an employee's productivity and output, rather than a reflection of their personality and 'likeability' factor. Moreover, it's important to understand which of your key values you want embedded in the process. For example, if one is safety then your rating scale must be reflective of how your employees are performing in relation to this deliverable.
What often works effectively is scoring employees on both the 'what' and 'how'. The former looks at competencies and the latter assesses the behaviours involved in delivering the requirements of a role. For example, someone in a sales role could be consistently exceeding their targets, but if their behaviour suggested that they had trodden on their colleagues to reach them, then this would be reflected in their performance rating. An alternative solution which requires the input and influence of the employee during the process is awarding one rating for meeting the overriding role objectives. Next, introduce a deciding factor called 'Accelerator' which looks at how these objectives where achieved. Based on the 'Accelerator' conversation, the employee has the option to move up, down or maintain the same rating.
Creating the Cultural Change
When it comes to embedding the performance management process into your business and securing the 'buy-in' from managers and employees, it's crucial to create an accepting culture. It's important to understand which elements of the existing culture you want to remain the same and then also to look at how transparent you are going to be around the new policies. You ultimately need to understand what's required, what's desired and what the gap is. Research shows the direct correlation between high engagement and performance, so find out what really matters to your employees and embed the appropriate elements into your process to get the best buy-in - is it safety, community, trust, responsibility etc? For example if your company has more of a 'self-service' culture and employees are empowered by this, put the onus back on the individual to book their performance meetings and drive their careers.
Once you've ironed out all the creases, the process and culture need to be driven from the top down; ideally the CEO or a transformational leader. Often it's a case of piloting the new process on a smaller scale to build the case study and demonstrate the ROI. Setting expectations upfront is key and restoring the balance between 'am I working for you?' or 'are you working for me?' is also crucial.
'Performance Management' is a positive phrase with very negative connotations. What we really mean is enabling people to be the best they can be at work. Ultimately, the performance management process needs to follow a logical structure to enable anyone to be able to complete it to the same degree as their fellow colleagues. It's HR's responsibility to build an informed and accessible process, ensure managers have the tools to deliver it, maintain its integrity, drive engagement through it and create a system focused on quality conversations to actually improve someone's performance.