For a while now it has felt like structured performance management has been getting blamed for simply managing performance rather than improving performance. There has been a trend with companies moving towards fluid, on-going processes of feedback and growth, over an annual cycle approach of goal setting, diarised reviews and an all or nothing, winner takes it all, end of year review with your line manager.
2016 was apparently going to be the year that performance reviews vanish according to some analysts, with Cliff Stevenson at BetterWorks predicting that 50% of Fortune 500 companies will kill annual rankings by early 2017. Interestingly, the CEB have recently published research suggesting that although employees didn’t like performance reviews, it did improve their performance. The CEB report found engagement and performance dropped by up to 10% in companies who had dropped reviews.
Where companies remove ratings it can be difficult for employees to understand and trust decisions that are made around performance. The CEB report also states that the number of employees who felt pay rises were allocated fairly, dropped by 8%. So there you have it, you are damned if you do and damned if you don’t. But wait, the critical piece that is missing here is what is best for your business not what is fashionable. It may be that what is right for your business is structure and ratings and for another it’s informal and free flowing. The question you need to ask is ‘who for your business, is that critical saviour of performance management?’
Perhaps your business needs performance management like The Hulk. You need strong, structured systems that cannot be flexed at a manager’s whim. Ratings are clear and have clear, uncomplicated consequence. Employees won’t like this performance management system when it is angry!
Or maybe you need Wolverine. You need strength of process and structure but there is a softer side too where you want to have developmental conversations, you know that some development is needed but not at the expense of business performance.
It might be that your business is like Batman, caught between two worlds of performance management. You like the idea of giving employees room to grow, fall forwards and fail together but your shareholders expect results and are less forgiving. Your process is trying to achieve the strict high levels of performance while trying to keep the processes as friendly as possible.
Spiderman performance management is nimble and flexible but not quite free enough to reach the blue sky of thinking. Employees understand that they can fail and the business values growth and development over out and out results. There is a culture of trust that allows managers to manage without the bureaucracy of an annual cycle.
Finally, your business might benefit from the free approach of Superman. Performance management doesn’t need boundaries and you trust individuals to do what they need to do along the way to make them as good as they can be. Managers are there if they are needed but performance management is in the hands of the employee.
While you might think any superhero would be welcome, have they got your best interests at heart? There is no point designing a scheme fit for Superman when your business needs boundaries and structure to achieve its goals.
