If you are running a business which involves working with multiple groups within the organization, chances are you already have a performance management system in place. In many organizations, such system may be an annual process of evaluating what individuals and groups did well to determine their perks like salary raise and/or bonuses. While in many others it is now a continuous process of dialogue conducted monthly to ensure expectations are calibrated regularly. In the recent past with more and more enterprise organizations moving to the continuous performance management process, many organizations of various sizes are evaluating a move to the same.
We believe that what performance management works for you is dependent on the overall organizational culture and there are benefits and pitfalls of either system. Fundamentally any performance management system involves components like defining what is to be achieved, how it is to be achieved and using what resources it is to be achieved. Once the individual and group are clear what they are to achieve the management then reviews such objectives periodically to determine if the individual and/or team is on track and if not what adjustments need to be made.
Performance Management is more than the appraisal review
In many cases employees and managers seem to equate the whole process to the end objective of securing a higher pay and bonuses, however, performance management is a holistic process designed to work for both employee and manager and help them optimize the performance of self and the group. The performance management process hence not only interfaces with compensation and benefits but also with reward and recognition and learning and development processes within an organization.
So when you are designing the process for your organization you need to ask yourself, what resources and tools do my employees and managers have to truly embrace and execute the performance management process being defined. Most of the conversation around performance management seems to be centered on the frequency of review while we believe the frequency of review is just one of the design elements. Organizations need to focus more on what is going to be reviewed and how effectively it will be reviewed rather than spending disproportionate time deciding how frequently it should be reviewed.
Performance Management is susceptible to fads
As large global organizations experiment with their overall performance management systems, their success soon gives rise to these conversations about how this practice should be the only way every other organization needs to follow. We all conveniently forget that the organization which started this “innovative” approach started with what business problem they were solving and hence arrived at a particular solution as their method to solve that particular problem. If you simply copy someone else’s process and superimpose the same in the business realities you are likely to run into many problems.
Performance management has seen its evolution from the early days of “time and motion” studies to the “9 Grid evaluation of performance and potential” and the most famous “Bell-Curve”. We call all of these as philosophies rather than specific methodologies. We believe that most of these are still relevant depending on the organizational policies and processes and most importantly the maturity of their business and people to handle more complex performance management approaches.
In most cases, organizations designing a new performance management system tend to ignore what their employees and managers want from the process. Ensuring that these critical stakeholders are involved in the design phase will ensure that you take a holistic view of the performance management process and its objectives, which is then likely to ensure adherence to the laid down processes.
Performance Management is not silver bullet
No performance management process including the continuous feedback one is silver bullet which can magically resolve all your problems. For Example, if your managers are not capable of holding effective conversations with employees, they are not going to be effective irrespective of the frequency of such conversations. So while deciding if the continuous performance management or any other performance management system is right for you or not, you have to assess various aspects of your organization including what is happening currently, what is working well, what are the key expectations of the key stakeholders and what objectives will the revised process help you achieve. While doing this assessment and then designing a new approach, you would also have to critically evaluate the effort and investment required to make the new approach work. In many cases, while people talk about the “wasted” efforts in filling out annual appraisal forms, not many document and report about efforts required to make the continuous performance management process work as it is intended.
Lastly, design your process first and then look for a digital tool for the same. If you are going to introduce a process which is primarily designed around a digital tool used by other organizations, then you are fighting your battle at two ends, the process and the tool. Such transitions would typically need more effort on your part to ensure the change management is done effectively and the tool and process meet its intended objectives.
So if you are looking to redesign your performance management process look carefully and think of various design elements beyond the frequency of review and then select a digital tool that is flexible and configurable to accommodate your process the way it is designed.