Millward Brown Head of Talent and Strategy, Cindy Grass, says an increasing number of organisations have been listening to their employees’ complaints and taking a more sophisticated approach to performance management.
“They are replacing year end appraisals and ratings with in-depth conversations, often drawing on the myriad data points now available about employee and company performance, such as sales information, organisational climate survey results, and employee engagement data,” Grass told HC Online.
“This improves how people listen to feedback, encourages them to set stretch goals, and makes it easier for them to put in extra effort toward a worthy project, and helps them learn from positive role models.”
She says this new method of performance management places a strong focus on regular quality conversations between managers and employees, using the structured conversation model.
But Grass doesn’t agree in scrapping performance appraisals altogether. Instead, she believes HR needs to take a fresh look at evaluation and what it means to the business and its staff.
“Employees want feedback, they want to know they are learning, growing and improving,” she says.
“This requires managers obtaining robust and reliable data on employee performance and be able to share this with employees in a timely manner.”
Grass says correctly conducted performance appraisals hold a number of benefits for leaders, managers and employees.
Benefits for executives and senior leadership
- Access to data on employee performance to support better decision-making
- Ability to identify high and low performers
- Alignment of your entire workforce with the organisation’s goals and priorities, and the ability to track everyone’s progress
- Ability to provide training and development programs that address performance and skill gaps for individuals and groups, and verify their effectiveness
- Ability to get a clear and strategic understanding of your workforce’s potential, strengths and weaknesses
- Ability to establish an effective pay for performance culture grounded in employee performance data
Benefits for HR
- Legally defensible documentation on employee performance
- Ability to ensure all employees are getting the direction, feedback and development they need to succeed
- Insight into the competencies, skills and experience that lead to high performance in specific roles (which can improve hiring, decisions about promotions, etc.)
Benefits for managers
- Better employee performance and engagement as a result of regular consistent feedback and coaching
- Better employee accountability for work as a result of clearly defined and aligned goals
- Easier identification of employee development needs
- Better ability to assign, track and evaluate the effectiveness of employee development activities
- Fairer and more informed decisions about pay and promotions
Benefits for employees
- A clear understanding of expectations and a context for their work
- An understanding of how they fit into the organisation, and how their work is contributing to the overall success of the organisation
- More regular, and better quality feedback on their performance and specific details on how they can improve
- Clear insight into the skills they need to develop if they wish to progress in their career
- Better, more targeted support for their development and career progression
- The ability to provide performance feedback to managers and peers
Contrary to their perceived function, traditional performance reviews may have the opposite effect on employee performance, Grass says.
“If you want a high-performance organisation, you have to reverse the destructive effects of conventional performance management,” she says.
Grass says HR must learn fresh ways to evaluate employee performance that stimulates and motivates individuals to perform to the best of their ability.
“You need to find ways to evaluate people that recognise the unique role each person has played in moving the organisation forward.
“These evaluations must be based on a growth mindset: They must recognise that with the right context and conditions, anyone’s abilities can be improved, especially given the expansive, flexible nature of the human brain.”
HR professionals can instigate this change at the top echelon of the organization by opening up frank discussions with key leaders.
“The starting point may be educating your company’s leaders about your current performance system, especially if it is based on numerical rankings,” she says.
“Because these rankings are so deeply ingrained in most organisations, and so closely tied to both the fight or flight response and the fixed mindset, you may need to build awareness to get people ready to consider change,” Grass says.
A key component of HR’s role is to develop the tools, thinking and coaching in how to manage the conversations between management and employees. Grass says HR needs to be educating managers on how to have these conversations and ensure employees receive the right type of feedback.
“This will help employees grow rather than demotivate them,” she says.
The cost to organizations in the time and effort involved in completing performance appraisals could be minimized if feedback was provided in a more timely way, Grass says.
“At Millward Brown, we conduct monthly catch-ups where each manager has a set of 10 questions to ask employees. These questions are linked to strengths, development areas, training and ideas for communication and feedback,” she says.
“This format has a number of benefits as employees come prepared with thought out responses to the questions; they can then discuss and reflect on achievements, identify strengths and provide feedback upward, which is important to encourage growth.”
Cindy Grass is a guest speaker at the upcoming 14th annual National HR Summit in April 2016.
The death of the performance appraisal may be on the horizon in favour of in-depth conversations and more holistic performance management strategies.