Companies are throwing out their performance management systems all over the place, often making headlines as they gleefully abolish rankings and annual reviews, or controversially reinstate them. A fresh approach can re-energise, re-engage and be a powerful statement of intent. But if leaders think this alone will make a difference to performance and productivity they will be bitterly disappointed.
Debates about rankings, reviews, and performance pay miss the point. The key to increasing (and sustaining) performance doesn’t lie in a system that focuses on what’s happened in the past. It lies in an embedded performance culture.
Responsibility for managing performance has also been misplaced. HR teams are often brought in to the conversation too late, when the problem is intractable and an employee is halfway out the door already.
Though they’re tasked with performance management, the uncomfortable truth is that many managers aren’t equipped with the skills to have the right conversations. So they avoid them altogether, and the performance review becomes an excruciating annual event, often with surprising and difficult-to-manage revelations. Research shows that whatever your process, it will make little difference to performance if your managers don’t know how to get the best from people.
The new world that we define in this article focuses on creating the right conditions for high performance, and it is one where the employee plays a far more active part. To borrow a legal phrase, the manager, the individual contributor and HR are jointly and severally responsible.
This mutual accountability gives employees much greater licence to influence their chances of success, prompts managers to focus on setting their team up to succeed, and positions HR as the enabler – the advocate for both the business and the individual.
There are plenty of proven ways to get people to perform at the top of their game, they just aren’t based in process design, inventory management, forensic metrics or sparkling new systems. The key to creating a high performance culture is setting up and maintaining the right psychological conditions. Mind Gym’s team of in-house psychologists read, analysed and dissected research and thinking on performance management and identified six conditions for high performance.
Whether your company’s approach to performance management is generally ‘structured’ (forced rankings and prescriptive criteria) or more ‘agile’ (flexible definitions and loose processes) these conditions are equally applicable.
‘Why am I doing this?’ is a question most of us have asked ourselves. The richer our answer the more likely we are to perform at the top of our game. There are three types of ‘purpose’ that directly affect performance:
- Task purpose. Knowing our work counts and isn’t futile.
- Collective purpose. Seeing how our work combines with others’ to create something no-one could achieve alone.
- Social purpose. Recognising that our work makes a worthwhile contribution beyond the success of the organisation.
The manager’s role is to help align work with each person’s individual purpose and the team purpose. The role of HR is to reinforce the vision and purpose of the organisation through all communication, and to promote a culture where people’s performance is driven less by the ‘what’ and the ‘how’ and more by the ‘why’.
We perform best when we’re suitably challenged. The question is: how much challenge is reasonable?
There’s much more to challenge than simply setting goals or KPIs and measuring performance against them. The most performance-enhancing goals are:
- Just out of reach. If you believe your goal is possible but can’t currently see how you’d achieve it it’s probably the right level of stretch.
- Aligned. Individual goals should be aligned to personal strengths and motivations as well as the organisational strategy.
- Always up for review. The world around us changes fast, so goals need refreshing.
The manager’s responsibility is to help the individual appreciate that the goal is ‘just about possible’.
It’s HR’s responsibility to ensure managers are able to adopt this approach, and to keep the process simple. Time should be spent on goals themselves not form-filling. Agreeing goals should be a highly motivational process that creates direction and energy.
The feedback that makes the biggest difference is:
- Descriptive. Saying what you see someone do has more impact than evaluating it.
- Informal. Comments given frequently as part of conversations are easier to digest and allow time for reflection.
- Informed. Managers are aware of what everyone is doing.
The simple act of noticing and saying what you noticed can be the most powerful feedback. Employees who think their manager always knows what they’re up to and how they’re doing are far more likely to feel appreciated and raise their game. The key to paying attention is doing it lightly and often. Frequent feedback is best, but if this doesn’t happen research suggests there’s a minimal threshold: once every two weeks.
HR’s role is to place less emphasis on mid-year and end of year reviews, instead promoting a culture of continuous feedback. HR leaders should coach and train managers to create a feedback culture.
We grow faster when we have:
- A growth mindset – believing we can get better.
- A role that plays to our strengths and skills.
- Sight of better prospects. We can see that by getting better now we’re more likely to attain something that matters in the future.
When promotions and pay rises are scarce, ‘moving’ needs to mean more than moving up the hierarchy. Progress may include new skills, project opportunities, lateral moves, secondments, shadowing, leadership opportunities or even a sabbatical outside the company.
HR’s role is as an enabler, providing detailed career paths. HR can coach hiring managers to put together a possible career trajectory for new hires. It might not be in a manager’s best interests to focus on the future development of a high performer if the status quo focuses on getting results. HR should challenge managers not to be protective or territorial over their best resource.
We feel most appreciated when recognition is:
- Fair. It should be based on clear criteria and applied consistently.
- About me. Not the person giving it.
- Differentiated. The difference between how the best and worst are recognised is proportionate.
Though we might tell ourselves the question that matters is: ‘is it worth the effort?’, we’re actually more affected by the answer to: ‘am I being treated fairly?’ When recognition is perceived as unfair it does damage. However, when it is done well it delivers a significant boost in performance. In service organisations this can be as much as 15%, rising to 30% when combined with appropriate feedback.
HR teams should offer managers multiple ways of recognising and rewarding both group and individual performance, and have very clear guidelines on how to manage underperformance. It also needs to support managers through applying these.
We keep performance high when we:
- Create support networks. Do this by building a strong network of technical, emotional and practical support.
- Adopt an optimistic outlook. Interpret challenges as short term, specific and insightful.
- Focus on what’s in our control. Draw on your inner strength to sustain performance in spite of setbacks.
You can’t always choose your circumstances but you can choose how you think about them and what you do as a result. This is the premise for the condition of ‘choice’.
Together with HR leaders, managers can reflect on where it’s possible to give people autonomy. When sharing plans they should explain the choices people have in how to implement them. HR can coach managers on how to help teams make the right choices to build perseverance and performance in the long term.
Natasha Elvin is global head of HR at Mind Gym. Mind Gym launched a new whitepaper Reinventing Performance Management in October 2015. Visit www.themindgym.com or tweet @themindgym to find out more. References Schwartz, J., Bersin, J., & Pelser, B. (2014). Delry workforce. Deloitte University Press