Blog post written by Rob Harman, II CPA, MBA, PHR, SHRM-CP. You have just received an email from your Human Resources Department advising you it is time to begin the annual performance review process. Do you react by thinking, great, I have an opportunity to showcase the great work I’ve done and provide meaningful feedback to others? Or do you suddenly feel the 12 week job assignment overseas is looking like a real opportunity? I think most of us will agree the performance management process is something that can be improved upon at most organizations. It is often a once or twice a year task that is required by the company in order to assess performance, determine promotions, discipline, or terminate employees who are not performing at a level that is expected.
While having the greatest intentions, many organizations come up with sophisticated competencies that are often very long, cumbersome, and complicated at best. The performance management process then becomes a necessary evil. Since most of us are being asked to do more with less, performance management becomes a low priority because the business of doing business always comes first. Often then, the performance management process becomes an annual exercise of trying to remember what you did for the year, what your team did, how well it was done, and what you can say about it in enough words to satisfy the owners of the process, while getting it done quickly enough to move on to your other tasks.
The sad part is that performance management is very much about running the business and meeting client needs, both internal and external. What is needed in today’s workplace is an efficient, effective, easy to use, continual performance management system that is transparent. Everyone needs to be trained on how to give effective feedback, and how to receive it. This should be an ongoing refrain! EVERYONE needs to be trained to give and receive feedback! Repeat – EVERYONE needs to use the training they received to give and receive feedback. Think of how many people you know who are ineffective at giving and receiving feedback and either are too busy to get better or think they are already good enough. The changes we recommend ONLY work if leaders and managers are GOOD at giving and receiving feedback!
With those criteria met, the performance management process will become a much easier task, one that is continual throughout the year, will deliver feedback, and will help set goals to help employees and the business.
In the following sections are five things to consider when building a successful performance management process and system. Use, design, measurement, output and competencies. We will cover use this week and the following four next week.
How will you use the system and what is your goal for the system? What organization and talent objectives are you trying to meet? Common uses are compensation decisions, promotion decisions, training, and what I’ll call leveling. Leveling can mean holding someone in their current position for a period of time, providing them with additional training, or finding other opportunities for them in the organization if their current position isn’t the right fit. Ultimately, it can mean counseling someone out of the organization.
As a side note, when making compensation decisions based on performance, many organizations are considering unlinking the direct connection between compensation decisions and the overall rating. Compensation decisions can still be made by performance, but other factors such as job position, job skills, market conditions, and contributions to the organization can be the main drivers1. This allows for more direct and honest feedback, and ultimately improving employee engagement and performance by honest coaching.
In part two, I will talk about what your intended use of the system should be, what to measure and how, as numeric ratings are falling out of style. We will also touch on competencies and how those are built into the system.
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