Changes Ahead for Performance Management

The annual performance review may soon be a thing of the past. At least in its present state.

Employees and managers alike have long held a dim view of the process as something that takes up a lot of time and adds minimal value. And those feelings are backed up by statistics. In Deloitte’s 2015 Global Human Capital Trends report, nearly half of those surveyed said they thought their process was “weak” in demonstrating an effective use of time. Only 10% of those surveyed characterized their process as excellent in “driving engagement and high performance.” The balance were evenly split between “weak” and “adequate” to describe the effectiveness of their process.

Although there has been a lot of talk over the past several years about the need to change the way we do performance management, it hasn’t necessarily been a priority. It looks like that is changing. According to the Deloitte study, the importance of performance management rose significantly in 2015 with “75% of respondents rating it as an “important” or “very important” issue, up from 68% the previous year.” Further, “89% of respondents recently changed their performance management process or plan to change it within 18 months.”

So why the impetus on changing performance management now? Employee Engagement.  With Gallup reporting that US employee engagement is stuck at 32%, companies need to find a more meaningful and, yes, engaging way to manage and improve employee performance. This means simplifying the process. Providing regular feedback versus (or in addition to) an annual review. Recognizing strengths rather than just focusing on weaknesses. Giving employees opportunities to develop those strengths and work on a career path. Making the process forward-looking rather than backward-looking. Training managers to be coaches not evaluators.

Certainly goals and objectives still need to be a part of it. Goals should be agile, and individual goals should be tied to company goals so employees can see how what they do ties to the overall success of the organization.  Managers/coaches should meet regularly with employees to assess progress and (here’s the agile part) revise goals as needed.

If you are ready to review and change your performance management process, I’d love to work with you. Please contact me at michelle@connecttohr.com.