Performance Management Trends - a Credibility-Building Opportunity for HR

Jamie Resker is hosting two events in collaboration with NEHRA on tackling the redesign of performance management. Join us at MIT in Cambridge on April 13th or in Boston on June 7th to learn more about how you can affect positive change in your organization's performance management process.

Business leaders report the need for a 20 percent improvement in employee performance to achieve their goals. The very core of performance management is to increase performance effectiveness. The reality? Millions of dollars and hours are spent on administration, filling out forms and haggling over ratings without any correlation to enhancing business results. What has been standard practice in most organizations is beginning to fade away, as the call for reform increases.

"...[HR] has plenty of room to improve, and this is a moment of enormous opportunity. Little has been done in the past few decades to examine the value of widely used practices that are central to how companies operate. By separating the effective from the worthless, HR leaders can secure huge payoffs for their organizations."

This means putting HR activities under a microscope to determine which add real value and clearing out activities that create busywork and distraction. The hottest topic in HR right now is the validity of the annual performance appraisal and ratings process.

According to the Corporate Executive Board, employees are less satisfied with performance reviews than ever before (95 percent, according to a SHRM survey). High performers find them ineffective and uninspiring. Over 90 percent of HR leaders report the process yields inaccurate data, and 95 percent of managers are frustrated with their organization's approach to performance reviews.

I'm not advocating getting rid of performance management; in fact, the opposite is true. We need to a system that truly manages performance and creates a high performance culture. The focus on reviewing past performance should be supplanted by more frequent conversations focused on current performance contributions and coaching style conversations about future expectations. The new paradigm shifts away from managers judging and evaluating performance to a two-way exchange of information between the manager and employee. Insight gained through giving and receiving timely and specific information focused on "the now" reassures people they are on the right track and re-directs off-target performance much more effectively. When managers and employees touch base frequently and openly, strengths and accomplishments are acknowledged and performance expectations are easily discussed, so that everyone can focus on producing exceptional results. Each person learns as they work and makes incremental improvements that lead to even greater individual and company performance. Conversations that are designed to promote dialogue will positively impact company performance and are a source of competitive advantage. It starts with a new way of thinking — a modernized approach.

Create a quick (10-15 minute) monthly framework where managers and their staff engage in one-to-one higher level conversations about performance and development. When I say "conversations," I mean dialogue that goes beyond the usual talk about "how's that project or task going." This is already occurring within your organization.

As more and more companies realize managers are replacing annual reviews with more frequent feedback, new technology solutions are working their way into the equation. Online tools and apps for exchanging feedback are just that - online. Sending feedback online is a one-way communication; conversations don't happen in the cloud or in an app. Emphasize the importance of voice-to-voice communication to managers.

Few would argue with this fact: it's the manager's job to give feedback throughout the year. If you're an HR pro, how many times have you instructed others to "give feedback all the time"? Telling managers to give feedback isn't enough. Mercer's 2013 Global Performance Management Survey reports just 6 percent of managers are skilled at this mission-critical task, leaving a whopping 94 percent of employees working for a manager who is unskilled at having candid performance conversations, regardless of how many reminders HR leadership provides. These skills don't come naturally, but can be learned. The Harvard Business Review article points out that most companies are realizing what HR has long known: managers need the training, the time and the incentives to have ongoing conversations about performance and growth.

HR can pave the way for new habits of regular manager and employee performance development conversations, and is poised to create a system that engages everyone, boosts organizational results and creates a strategic advantage. The pressure is on HR to adopt and introduce new thinking on a practice long overdue for change. Your primary goal in 2016 should be to fix performance management, regardless of your industry, geographical location or size. The good news: you don't have to be Gap, Deloitte or Adobe to make this monumental change within your organization. You have the ability to rebrand performance management, taking it from an HR distraction to a strategic advantage for your organization. We are poised to create a system that engages everyone, boosts organizational results and creates a strategic advantage. The obvious question is how to go about making this shift. Seems hard - but it's not. Others are doing it and you can to. Join us on April 13th in Cambridge, MA or on June 7th in Boston, MA to learn more about phasing out the annual performance appraisal in your organization.