10 Counterproductive Performance Management Assumptions You ' re St ill Making
Companies need to adapt their performance management strategies to better reflect the changing dynamics of the modern workforce and ensure their employees reach their potential. According to Deloitte, 58% of executives believe their current performance management approach neither drives engagement nor leads to high performance. 1 Even today s top leaders think the old way of doing things is throwing resources down the drain! Check out 10 outdated performance management strategies you might still be clinging to, and how you can revitalize your talent development initiatives to maximize the power of your employees. w 1 Buckingham, Marcus. Reinventing Performance Management. HBR. Date published: April 2015. Date accessed: Nov. 6, 2015. https://hbr.org/2015/04/reinventing-performance-management
1 SETTING GOALS ANNUALLY IS AN EFFECTIVE WAY TO MANAGE THE BUSINESS This belief is outdated because it assumes that the goals you set at the start of the year are the same ones you ll have by the end of it. Today s top companies recognize that goals and priorities shift due to marketplace demands. Their agility is the key to their success, and research shows that companies whose employees constantly evaluate their priorities perform better than ones who review their goals just once or twice a year. As a best practice, trade long-term goals for near-term ones. GE is one of many high-profile companies to have ditched annual reviews, and as Susan Peters, their head of HR said: The world isn t really on an annual cycle anymore for anything. 2 e 2 Nisen, Max. Why GE had to kill its performance reviews after more than three decades. Quartz. Date published: Aug. 13, 2015. Date accessed: Oct. 24, 2015. http://qz.com/428813/ge-performance-review-strategy-shift/
2 EMPLOYEES SHOULD SET GOALS INDEPENDENTLY OF ONE ANOTHER Traditionally, employees set their individual goals, separate from team or department goals, with only they and their manager having insight into progress. However, today s companies are flatter, leaner and more agile, and the complexity of today s workplace has led to dramatic increases in collaboration. This team-oriented environment means that individual and team success are often interdependent. Employees should either set team-based goals or share their goals with their teammates to ensure projects stay on track, and if someone is falling behind (and hurting the team s progress), others can step up to help them out. r
3 THE SAME MANAGER IS GOING TO BE IN PLACE 12 MONTHS FROM NOW Even though an employee may set goals with their manager, it s very possible that the manager won t be managing that same employee by the end of the year. The new manager, even if he or she wants to keep those goals in place, may not have had the same experiences or level of interaction with the employee as their predecessor did, which means they may not be able to provide the most comprehensive analysis of whether those goals were reached. It s also possible that others may have had more contact with that employee, too. t
4 THE MANAGER KNOWS MORE ABOUT WHAT THE DIRECT REPORT IS DOING THAN THE DIRECT REPORT (OR THEIR PEERS) DOES y Automatically assuming a manager knows everything about their subordinates is a big roll of the dice. With a worldwide labor force, it s possible a manager is less knowledgeable in a subject area than their direct report. Also, a direct report may be in a different location than their manager, making it possible they ve never interacted beyond video chats. To ensure they accurately gage employees achievement of goals, managers should determine who the best source of feedback is. Considering the work environment, perhaps the direct reports peers can offer additional insight to the manager s own perspectives. Someone with the same skills as a report, or one who is in the same location, can also be a great asset.
5 EMPLOYEES WORK FOR ONE MANAGER In a matrixed management structure, an employee may have more than one manager. This can be challenging for traditional performance management processes. Most managers end up evaluating employee performance in a very ad hoc way. However, today there are technology solutions that can accommodate gathering of feedback from multiple individuals as opposed to being limited by just one manager s input. u
6 AN ANNUAL OR SEMI-ANNUAL PAT ON THE BACK, OR PERFORMANCE CORRECTION, IS SUFFICIENT TO MOTIVATE AND RETAIN EMPLOYEES Infrequent reviews don t motivate employees or attract top talent. Typically, managers find long-term tracking of employees to be difficult, which means a lot of information gets lost over the course of the year. To truly inspire employees to be more productive, managers need to provide regular feedback about their progress toward goals. Also, Millennials are used to getting information when they want it, and they expect that same immediate access to information in all aspects of their lives, including their careers. For staff of all ages thotprovide regular feedback for employees enjoy a 14.9% lower turnover rate. 3 i 3 Jim Asplund and Nikki Blacksmith. The Secret of Higher Performance. Gallup. Date published: May 3, 2011. Date accessed: Nov. 6, 2015. http://www.gallup.com/businessjournal/147383/secret-higher-performance.aspx
7 EMPLOYEES ONLY CARE WHAT THEIR MANAGER THINKS ABOUT THEIR PERFORMANCE Millennials will comprise more than half the workforce by 2020, so understanding their mindset is critical to rethinking performance management. This group values receiving feedback from those they respect, irrespective of the corporate hierarchy, which is a break from prior generations who tend to more highly value their immediate manager s opinion. Now is the time for companies to rethink what the most valued sources for employee feedback are, and what practices are in line with their culture. Goldberg suggests seeking opinions beyond immediate managers as a key direction for stakeholders. o
8 MANAGERS ARE REFLECTING ON THE EMPLOYEE S PERFORMANCE ALL YEAR LONG Historically, managers have not been great at tracking observations about their direct reports throughout the year. It s only during review season that managers take time to really do the evaluations they should have been doing throughout the year. While this often stems from how busy they are, the result is an employee evaluation that is often too skewed towards recent performance. A researcher at Colorado State University found that annual appraisals end up as a source of anxiety and annoyance rather than a source of useful information. 4 1) 4 Vara, Vauhini. The Push Against Performance Reviews. The New Yorker. Date published: July 24, 2015. Date accessed: Oct. 29, 2015. http://www.newyorker.com/business/currency/the-push-against-performance-reviews
9 THE PERFORMANCE OF KNOWLEDGE WORKERS NEEDS TO BE MANAGED According to author Daniel Pink, today s employees want autonomy, mastery and purpose. They are motivated internally, and don t need anyone to manage their performance. Managers should provide the big picture to their employees, give them the right tools and resources to succeed, and even inspire them to be their best. But Goldberg says that even using the term performance management sends a subtle signal to employees that they need to be managed. Instead, she recommends moving away from performance management and shifting towards inspiring great performance. 1!
10 EMPLOYEES WILL TRUST THEY HAVE BEEN TREATED FAIRLY UPON EVALUATION It can be tough for employees to feel that their evaluations are objective. Manager bias still rears its ugly head, even despite complex formulas that weigh attributes like goals and behaviors. Further, some managers subjectively decide who gets a bonus, then rotate who gets it the next year. Others decide who they want to receive a bonus, then manipulate the ratings toward their pre-determined outcome. Ultimately, managers can manipulate their company s compensation system to get the outcome they want. Currently, less than one-third of employees 29 percent feel their company s performance management process is fair. 5 Avoid this by ensuring managers get feedback from multiple sources, and that pay-forperformance processes are transparent. 1@ 5 Stevenson, Cliff. Performance Management: Sticking With What Doesn t Work. I4CP. Date published: Oct. 31, 2013. Date accessed: Nov. 6, 2015. http://www.i4cp.com/print/trendwatchers/2013/10/31/performance-management-sticking-with-what-doesn-t-work
These 10 outdated assumptions about traditional performance management reviews all address weaknesses in how companies evaluate their employees. They also touch on how goals are set and achieved, flaws and biases in managers assessments, and what truly motivates employees (feedback and transparent compensation are key factors). For companies to truly have an objective system for developing employees, they must tailor their approach to a modern workforce that is more global and connected than ever. To dive further into how your company can have more meaningful evaluations, check out this video today! Edie Goldberg, 2015: Building a Cycle of Engagement and Development with Re-Calibrated Performance Management webinar. HCI September 30th, 2015 Ready to learn more about how Cornerstone OnDemand can help you rethink your approach to performance management? Let s talk. Cornerstone OnDemand is a global talent management software provider that is pioneering solutions to help organizations realize the potential of a modern workforce. csod.com 2015 Cornerstone OnDemand moreinfo@csod.com 888-365-CSOD Stay connected: