As organizations start modernizing, so does the performance management process. Managers are changing the way they look at goal setting, how they evaluate performance, and the way they approach conversations with their employees. According to the recent survey by Deloitte, 89% of respondents recently changed their performance management process or plan to within 18 months.
Want to find out some new trends and strategies? Here are the notes that we gathered from the “How to Evolve Performance Management in Your Organization” session at the 2015 Bersin IMPACT conference:
One factor that’s bringing down performance reviews is how conversations take place. Typically, they’re one-sided from the manager, but the new trend that’s being widely adopted is to get the employees more involved in conversations.
Conversation journals: Seen only by the employee and manager, this solution is ideal for keeping a log of topics discussed during one-on-one meetings or end-of-year performance evaluations. It gives both parties something to refer back to whenever someone needs to reflect on goals, performance, or general pain points.
Year-end conversations: Gone are the days of year-end ratings. Instead, organizations are moving towards having year-end conversations where both parties can given the opportunity to discuss what’s happened in the past and what should happen in the future.
Continuous feedback: To supplement year-end conversations, consider giving frequent feedback. One-on-one meetings allow managers to touch base with how their employees are progressing on their goals or find out if there are any concerns that need to be addressed.
Performance reviews are all about getting employees involved. A one-sided conversation has the potential for putting employees on the defensive. But if you give employees a voice, it gives them the opportunity to contribute their thoughts and explain any situation that might need to be discussed.
When it comes to goal setting, everyone needs to make sure goals are aligned across the whole organization. Doing this keeps ensures that any individual’s day-to-day task is relevant to the business’ strategies and contributing to its success. To do this, follow these steps:
Company goals: Find out what the company’s overarching goals are, whether it’s acquiring 10,000 more clients or building out a new product feature.
Manager goals: How will you, a leader, contribute to either acquiring said number of clients or building out a new product feature? Build your goals around what the company is driving towards.
Individual goals: How will this person contribute to the manager's/team’s goals? If they’re in sales, give them a number of clients that they should aim to acquire. If they’re a developer, make sure they’re on the team to help code the new feature.
Cascading goal also gives everyone a heads-up for what’s to come in the future. That way, there won’t be any surprises or mad dashes to finish a project. And because everyone is on the same page, company goals will be achieved quickly and efficiently.
Transparency Is Everything
Not only should you be transparent about goal setting, but you also need to be transparent about ratings and rewards. No one likes surprises in their performance evaluation. Is there a promotion that employees can work towards? Let them know how. Is there a new rating scale that you’re leveraging? Make sure they understand how it works. The more transparent you are with your employees about ratings and rewards, the more motivated they’ll be to work towards them.
Start off the discussion with a career conversation. After all, employees want to keep pushing forward with development — they don’t want to be boxed in and feel like they’re at a dead-end job. Ask your employees about their career goals and what skills they wish to develop or work on. Giving them stepping stones and room to grow within your organization is a great retention strategy.
A lot of managers tend to focus too much on what’s happened in the past, and this contributes to employees feeling like reviews are useless. Make sure to include some time to discuss developmental goals during the review meeting.
Psychology of Mindset
Another interesting topic brought up during this session was the book Mindset by Stanford University Psychologist Carol Dweck. There are two types of mindsets that people adopt: fixed or growth.
Those with a fixed mindset believe that intelligence and talent are innate, so they spend time documenting these traits without putting effort into development. Because they believe their traits are fixed, they are under the impression that success is achieved through talent alone. Failure is also not an option for these people. To them, it’s a negative mark on their natural talent.
On the other hand, people with a growth mindset believe their intelligence and talent are developed through learning and hard work. As for success? That’s also hard earned. People with this type of mindset aren’t afraid of failure. In fact, they learn to improve through their mistakes.
When it comes to performance reviews, if you continue to tell someone, “good job, you’re such a talented writer,” then this employee will get into the fixed mindset that this skill is innate. However, if you tell an employee, “good job, you’ve worked very hard,” then this employee will get into a growth mindset because you’re encouraging them to work through any setbacks. The way you communicate to your employees can make or break their motivation.
Performance vs. Potential
In the workplace, it’s sometimes difficult to tell the difference between the two. But doing this is extremely important when you’re considering giving someone a promotion.
High performers get their work done on time, and they’re known for that. That’s great when it comes to productivity, but it can also mean they don’t have the potential to succeed in a management role or with advanced tasks.
People with high potential have already demonstrated that they have the technical skills and ability to make an impact in the company. They can do more for the organization in terms of leading and people management.
Differentiating between the two will help you come up with developmental paths that will be tailored towards their needs.
Another theme that we caught during this session was the mention of David Rock, the founder of Neuroleadership. Rock uses neuroscience as a foundation for developing leaders. The one theory that made its round was the SCARF model:
Status is about relative importance to others
Certainty concerns being able to predict the future
Autonomy provides a sense of control over events
Relatedness is a sense of safety with others - of friend rather than foe
Fairness is a perception of fair exchanges between people
Each of these five domains activates either the “primary reward” or “primary threat” in the brain. In plain English, this means that if someone perceives a threat to their status, it calls forth the same brain networks of their life getting threatened.
This is an interesting take on the performance appraisal conversation. When managers focus too much on the negative, psychology says that employees will feel as if they’re getting attacked. Instead, focus on an employee’s strengths and develop them to avoid this type of behavior.
From what we saw, attendees from this session brought forth new strategies for performance management. Things are changing in the workplace, and organizations need to make sure they’re staying up to date. If they don’t, there’s a great possibility that you won’t be able to hold onto your top talent.
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