‘Employee Performance’ seems to be on everyone’s mind at the moment. Probably because a lot of us have a fairly traditional model in place, where salary increases are tied to performance ratings, and this is the time of year when the budgets and salaries for ‘23 are discussed. So, for a lot of managers and employees the end of the year traditionally means ‘end of year performance conversations’.
Effective? No. Fun? No.
A lot of managers dread these conversations. Generally crammed in the same month, having to give feedback on poorly defined deliverables in the first place… and forced to give some sort of rating (are we still at school?!). It’s time consuming and doesn’t really lead to improved performance. It actually does the opposite, as for many employees it’s not a fun process either. You can feel very disillusioned when you are convinced you’ve had a good year, worked hard, and all of a sudden you find it wasn’t good enough. The big risk is that it comes across as poorly defined feedback, which is given too late.
‘’Performance review statistics to show how performance review systems can impact employee engagement. 92% of employees want feedback more than just once a year. If they felt they received an unfair performance review, 85% of employees would consider quitting.’’
Do we actually need performance reviews?
Can we just skip them altogether and move on with our day to day business, looking forward instead of looking back? Sounds like music to many. Turns out however, most employees do actually appreciate feedback on their work and they definitely want to know what they can do to grow. They look forward to these conversations! What they are looking for is a conversation in which they are complemented for the work done and learn how they can be even more successful.
And this is where the disconnect comes from. Because employees want to know what they need to do to grow in the future, and companies tend to use the reviews to look backwards and rank their employees (and base salary decisions on).
Don’t review, give a preview!
We are big fans of increasing engagement, and that’s done by providing feedback regularly. Employees are 3x more engaged when they receive daily feedback from their managers vs. annual feedback. So, focus on continuous feedback and use your daily/weekly meetings for this. Feedback should be instant, honest and actionable.
During the annual (or bi-annual) performance review, you take time to go a bit deeper than feedback. We suggest you use this time not to look back too much, but to look forward. Give your employees a ‘preview’ of how their future might look like. What they could do, can become, how they can grow. What amazing projects they could take on, teams they might lead, features they can develop, roles they could fulfill. And then discuss what needs to be done to get there.
Because the essence of performance management is to help people grow, not to rate their past performance.
Separate salary from the performance conversations!
When you know your feedback or ranking is tied to your increase, it’s super logical you’ll challenge the ‘constructive’ feedback and you’ll defend your performance. This is very different from the way good feedback is received - which is open, receptive and seen as a gift. Whilst great performance inevitably should lead to increased reward, it’s not the same conversation. Salary increases and reviews depend on so much more than individual performance. The company performance and financials play a role for example, and this is easily forgotten when salary is discussed together with individual performance.
How can we as People & Culture professionals contribute to the performance of individuals?
Mostly by enabling managers to have great conversations, to offer coaching and training and to provide a clear framework for growth. By helping the business take the bias out of the process and make it as fair as possible for employees. Ensure decisions around salary and promotions aren’t made by managers alone. Employees will feel supported in their growth goals and ambitions, and have clear objectives.
Essentials for an effective Performance approach
Enable your managers. Train, coach, develop them. Ensure your managers are capable of having good conversations around performance.
Clarity. People know what their role is in the organization, and how they contribute to the company goals.
Regular feedback. Build a culture where continuous feedback is the norm. When honest feedback is given regularly, performance conversations can be centered around development instead of feedback.
How can we as People & Culture professionals contribute to the performance of individuals?
There are many tools to capture performance (ratings), provide feedback with, capture kpi’s and deliverables, push 360’s and document conversations. Now ask yourself the question: Have you personally ever performed better because of such a tool?
That’s right! A tool is cool, but not essential. (Sorry all tools!). Why not? Because ‘I want a tool to document my performance conversations and this will help me become better’... said no employee ever.
If you love tools, there are plenty on the market. Most HRIS systems have an option to record the outcomes. We’ve also had positive feedback from users of: Leapsome, CultureAmp and Lattice. For what it’s worth, a simple Google-doc completed by the manager and employee can also do the trick when you’re still a small organisation.
Whilst we understand that it’s helpful to save your notes, especially when you make a commitment, we encourage meaningful and deep conversations. Take a walk, go for lunch, really listen and manifest the future. Preview. And then, if needed, document this afterwards.
What do your people actually want?
If you can’t answer this question, it’s probably because you’ve not asked them. Performance management is a process often designed and driven by HR departments. When you apply design thinking principals, you’d go to your employees and ask them how they would want to see this process. How could we get the best out of them in terms of performance? How should those conversations and the frequency look like according to the ones it was designed for? Perhaps that’s the key idea for 2023!? We’re looking forward to innovative new ways to boost performance!
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