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Stop performance management?

March 13, 2015

Article courtesy of SBAM Approved Partner ASE

One of the highly-rated speakers at our March 5th People, Profit, Progress, Conference addressed what she called “agile” performance management. Susanna Hunter, Senior Director of Organizational Effectiveness at McLean & Company, talked about the need to adapt the traditional concept of performance management to a changing environment.

Her talk got me thinking about how wrong-headed most performance management is today.

First, let’s start with the name – does anyone really “manage” performance anymore? Perhaps they do, if they manage employees who only do repetitive tasks that are easy to observe and measure. But most organizations are moving towards employee empowerment, which means defining the objectives and relying on employees to improve the process and outcomes. This isn’t really “managing” performance.

Next, let’s consider the process. Most managers dread the performance management process and most employees are disheartened and demoralized as a result of the way it is implemented. In fact, Susanna shared some startling research that indicates that an employee’s brain response to a performance review is the psychological equivalent of getting physically assaulted.  Nice, right?

So why do we do it? Perhaps because years ago GE’s Jack Welch popularized rigorous performance management by successfully turning around that massive, lumbering, diversified organization.  Companies clamored to mimic the GE approach, thinking they would have the same success. Authors wrote prolifically about the virtues of performance management. What they failed to factor in was that GE was exiting businesses and shedding people on a significant scale, in order to focus on fewer things they could do more successfully. Welch was wildly successful creating shareholder value through focus, determination and perseverance, not by “managing” performance.

However, most companies are not bloated conglomerates requiring rapid streamlining, and are not planning on shedding legions of employees.

Finally, let’s consider the outcomes. Current research shows that employees become demoralized and productivity drops after performance reviews. Managers typically end up no better equipped to manage, and senior management does not get any actionable insights. In fact, a 2014 Deloitte study tells us more than half of executives surveyed believe their current performance process does not drive employee engagement, and performance management is not an effective use of anyone’s time.

Obviously, it is time to quit doing performance management, right? NO! But organizations would actually be better off not doing it, if their only option is to continue doing it the same way. However, that will not be good enough to compete in today’s marketplace.  Employees today desire more feedback because they want to get better and want to be appreciated.

Then what is the answer? It is to retool the performance management process.

Start with the name. Why not consider calling it the Performance Support process? This puts a much different lens on the purpose for the process and the meetings. If managers approach the process in an effort to understand and support employee performance, instead of managing it, it would help reframe mindsets for employees and managers.

Next, look at the process. The process should really be designed to facilitate the right set of conversations instead of documenting that a meeting happened and that the manager criticized the employee. Think about a process wherein the employer asks managers to ask three questions:

1. How do you think I am doing as a manager?
2. How do you think you are doing in your performance and development?
3. What can I do to better support you in both areas?

Granted that this comparatively simple approach gets more complicated when compensation issues are brought into the process; but consider what a difference it could make. The manager would approach the conversation with curiosity and humility, rather than thinking she needs to apply pronounced judgment, and perhaps be accusatory. Why not ask questions that you do not have the answers to, and learn how to better support performance?

Finally, let’s look at the outcomes. If you are going to keep the preponderance of your workforce and simply want to improve productivity, consider how to facilitate conversations that help managers and employees improve, instead of “assaulting” and demeaning them.

One answer is to move to an agile performance management system with no rankings and more frequent conversations that include constructive, two-way feedback. This is not an easy change to effect. It starts with facilitating conversations among senior leadership. You may start by simply asking to understand the primary purpose of conducting the performance management process. Is it to sustain the illusion of command and control? Or is it to get to a more productive workforce and to compensate employees equitably? If it is the latter, there are better ways to accomplish those ends than trying to “manage” performance.

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