People & Leadership

5 ways to reinvent performance management for the better

People Companies are ditching annual appraisals for continuous conversations, reinventing their performance management processes.

The world of work is changing at pace. Is your performance management process keeping up?

Research reports from Gallup, Effectory International and Quartz agree on one thing: there’s an engagement and productivity crisis at work.

Just 29% of the global workforce is fully motivated and engaged.

In fact, our research revealed that one in three full-time employees admit to being productive for less than 30 hours a week.

When it comes to motivating and engaging employees to drive performance, HR and People leaders tell us two of their biggest challenges are knowing their people and getting the best from them.

In fact, our own research revealed that 55% of senior managers think they put people first, but only 29% of their workforce agrees.

Why the disconnect?

How can HR and People teams motivate employees to drive performance?

This is where performance management processes are key.

Make the link between performance management and productivity

According to our research, 78% of all employees say positive workforce experiences have a big impact on productivity, rising to 92% of younger generations, who will make up half of the workforce in 2020.

Two-thirds say being valued and recognised is the most important aspect of their work. Again, an area where the role of performance management is vital.

Leading People Companies are doing it today

Some forward-looking People Companies are already listening to their workforce and taking action to create and sustain a high-performance culture.

At Pret a Manger, high weekly mystery shopping scores for a branch earn staff an extra £1 an hour, for every hour they worked the previous week. Financial perks and public celebrations are only part of it, though.

Meanwhile, 80% of Pret store managers started as trainees, sending a clear message to the workforce about how much the organisation values its people, through actively recognising their potential and ambition.

Mercer reports that 85% of HR leaders plan to increasingly develop and promote from within – because in today’s competitive talent market, it soon won’t be possible to buy in the high calibre people we need in many industries and areas.

Embed a performance management process designed to motivate

Staying close to employee needs and delivering great experiences and recognition in response holds the key to an engaged, productive workforce.

A strong, motivating and effective performance management process fuels this.

We ran a webinar with SHRM (a professional human resources membership association) recently, looking at best practice among leading employers and People Companies to identify five ways to reinvent performance management to achieve productivity and talent goals.

Here’s what we found.

1. Set clear expectations

People need to know what they’re doing so they can work towards a clear set of goals. Make sure the goals are clearly expressed and understood by manager and employee. Keep it simple.

Salesforce grew from a backroom startup with a goal-setting principle it still uses today: the V2MOM. It’s a document that spells out what to do, why to do it and what’s most important.

2. Collaborate

Collaborate with 360 feedback and peer recognition from people who work as a team every day on the ground.

A range of feedback minimizes bias. Make sure there’s follow-up in the shape of recognition (potentially public), discussion of development plans and a continuous feedback process rather than a one-off hit.

Keep the feedback questionnaires easy and simple and focused on performance and behaviour, not the individual.

3. Encourage self-evaluation

Encourage self-development and assessment, so employees have their say, too. Give employees the opportunity for self-improvement by setting their own goals.

Enable two-way feedback so employees can give feedback about the organisation, processes and managers – so issues can be identified and fixed before they create disengagement and apathy.

And reinforce achievements since the last review.

4. Make feedback continuous and sustainable

Sometimes it’s too long to wait to quarterly reviews to praise people for their hard work.

Find channels for continuous feedback that are easy to use, so the feedback process is quick and achievable for busy managers and staff and provides a real-time picture of performance and attainment.

5. Employee development: Don’t just think – act

Don’t just write a development plan, make it happen. Focus on strengths, passions and career aspirations.

Ask for updates and encourage progress, making it clear that self-development to enable your employees to progress is a priority for you and the organisation.

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