Even before the COVID-19 pandemic hit, the traditional performance review – with managers sitting down with supervisees once a year to deliver feedback, and perhaps a small pay raise – had already begun to fall out of favour.
Both employers and employees alike are questioning the effectiveness of the once-yearly review, with McKinsey research showing that the majority of CEOs don’t find the performance management process helpful in identifying top performers. Likewise, more than half of employees polled in a Workhuman survey of more than 3,500 full-time workers feel the performance management process is not indicative of all the work they do and that it does not improve their performance in the long run.
Indeed, in 2020, with widespread remote working, combined with heightened stress and uncertainty, nearly a third of organisations adjusted their performance evaluations, with others postponing or skipping their customary year-end performance appraisals entirely. In these tumultuous times, where do companies go from here when it comes to performance management?
Challenges present an opportunity for change
Traditional performance reviews are based on work environments where managers are often just a few feet away from an employee’s desk. But the abrupt switch to remote working in the early part of the pandemic meant that face-to-face observation was no longer possible.
With fewer opportunities for impromptu catchups, many managers began to schedule regular check-ins with their team and quickly discovered the upside of more frequent, scheduled communication. When teams give and receive feedback on a continuous basis, the lines of communication open up, allowing problems and concerns to be addressed in real time, rather than waiting until they are deemed critical enough to raise formally, and encouraging in-the-moment expressions of gratitude and recognition.
This discovery aligns completely with what Workhuman CEO, Eric Mosley and I theorised about performance management in the book we co-authored, “Making Work Human.” In the third chapter, we observe that traditional performance management systems are based on a repeated cycle of annual goal setting and review, with a 52-week lag before feedback is given. But the modern business environment can no longer tolerate this lumbering pace, and we proposed that continuous conversations amongst employees, teams, and the business is where organisations should be headed with performance management.
Performance management 2.022
Now that continuous feedback is something companies are more accustomed to doing, business and HR leaders have a unique opportunity to leverage this shift, and redefine performance management towards more frequent feedback, with an increased focus on career development.
In order to advance your performance management processes, it’s important to concentrate on four key principles.
- Flip the focus
Organisations need to flip the focus from past performance to future development when having conversations about performance. Traditional feedback styles often emphasise the corrective and the negative, but growth-focused feedback acknowledges the positive along with areas for development.
- Make feedback agile
In addition to giving feedback on a continuous basis, feedback needs to be more agile and flexible. Praise, observations, knowledge and advice can come not only from a worker’s manager, but also their team and other peers. Conversations between the manager and employee, among peers, and even with members of the company in unrelated departments can create a network of skills, ideas, reactions, insights, and life experiences that can develop talent and improve performance.
- Be a coach, not a commander
The future of performance management lies in managers acting more as ‘coach’ than commander. Managers as coaches observe and highlight the right behaviours, recognising the best actions, values, and attitudes immediately and publicly. This builds community and belonging.
- Leverage the data
For companies with employee recognition programmes in place, there is a wealth of data from which to understand how work is getting done and gain key insights. By analysing this data, companies can spot high performing teams and highlight problem areas, as well as uncover hidden talent.
The pandemic has shown us that the traditional performance review is neither necessary nor adequate to meet the needs of today’s work world. As regular communication between managers and employees has become more frequent out of necessity, these conversations are paving the way for continuous performance development, where companies can weave in a consistent stream of feedback, check-ins, and priorities throughout the year. Ongoing performance management can help drive success for both the organisation and the employee, and it’s high time that performance management itself performs better.