Upping the performance management ante

by 01 Jul 2010

Effective feedback is a vital part of any performance management system. HR Leader examines KPMG’s upward feedback system and how the firm has benefited as a result

Since Geoff Wilson took the helm of KPMG as CEO two-and-a-half years ago, there has been a cultural and strategic shift in the organisation, with a number of initiatives being implemented as the firm works to deliver its five-year plan.

One of HR’s initiatives focused on helping the firm’s 400 partners seek and act on feedback to drive continual improvements in performance. In order to this, partners needed feedback on both what results are achieved and how those results are achieved.

“Broadly speaking performance management is about setting a consistent set of metrics which our people are measured against,” explains Nicole Makin, project leader – strategic people initiatives, in the people, performance and culture division of KPMG. “It is designed to support us in recognising and rewarding our top talent.”

In order to effectively provide this information KPMG needed a simple but flexible system that could easily collect and report this to the partners via an upward feedback system. The feedback needed to be used as an input into assessment, to help formulate goals for the coming year and to aid development planning. The system also had to be very easy to use, minimise email traffic and enable real conversations, rather than allowing people to hide behind systems.

KPMG opted for an “upward feedback” system, based on the Acelero platform, which allows partners to receive direct feedback from any person in the organisation on their behavioural and leadership strengths and weaknesses. Choosing this particular system was one of the key factors to the success of the initiative.

“Any person can provide upward feedback to any of our partners and executive directors at any point in time,” says Makin. “We needed the partnership to support this initiative in order for it to be successful. The take up by the partnership has been very strong – they were engaged and really encouraged their staff to provide feedback, with the expectation that the feedback provided will be funneled into their performance assessment.”

KPMG’s audit group, for example, was particularly responsive to this process. Makin explains that they placed it as an agenda item at every meeting, developed a set of metrics and provided weekly measurement updates against those metrics.

“This year the feedback will be used to help partners and executive directors set their development plans and we have noticed an increase in the number of partners asking for help with their development plans since we launched upward feedback. On the other side of the coin, our employees feel that the feedback provided is important and valued,” she affirms.

Many managing partners have been pleasantly surprised by the feedback from their teams, and found out a lot of positive attributes they didn’t know about, which will ultimately assist decision making and training within the firm.

KPMG originally ran a pilot with a select partner group, and Makin says this pilot was integral to the decision to implement it throughout the firm. “In hindsight we could have done more testing to ensure the process was as smooth for the whole of the group, but we were eager to do a full rollout,” she says.

Rolling out a system: advice from the frontlines

Have a thorough idea of your system requirements and guiding principles, and partner with a vendor from the beginning in the design process. By partnering with Acelero early on, the advise, experience and expertise actually shaped the design of the system.

Take the time to do a test run with a pilot. This mitigates risk, reduces debate on design and creates an opportunity to iron out any potential problems before the system is rolled out company wide. Really focus on wording of questions, keeping in mind the wide audience who will be responding and the impact of this on future leadership behaviours.

Engage people - after the pilot, workshop with participants. An unexpected bonus of this process was that despite the fact the focus of the initiative was on partners, employees felt really valued at being asked for their feedback on leaders, and were therefore engaged.

Source: KPMG

Top performance management mistakes

1. Our appraisal system does the job. With an appraisal system, reviews are typically conducted based on the definition of what the employee was originally employed to do, their position description, letter of offer or some other static document. Appraisal systems fail to address the critical issue that jobs change as business and organisational environments change.

2 Implementing performance management on paper. In large organisations, manual performance management systems typically fail 18 months after deployment. Compliance typically reduces to less than 30 per cent after 18 months. This is because manual systems do not facilitate effective and timely reporting.

3. Force fit application to automate performance management. One of the largest mistakes in performance management is to force the organisation to change well established and highly functional processes (force fit) so that a new software application will work properly.

4. Home grown. Another mistake is to develop and deploy an in-house performance management application. The applications are typically sub-standard, lack reporting and are often very difficult to use. The end result is that compliance falls, the application is removed and HR has to start over with a very cynical audience.

5. Assuming line managers can cope with manual performance management. One of the greatest frustrations of line managers with manual systems is compliance with the system. Managers lose track as to who they have set objectives for, who has been reviewed and what actions they need to take in relation to an employee's development plan. 6. Assuming performance management is easy for line managers. HR practitioners often think that setting objectives is a simple process. Line managers also tend to defer setting objectives because it means they have to think and plan (thinking and planning is more difficult than doing the day-to-day job and responding to more urgent work issues).

7. Automating performance management will lower the quality of objective setting and review. This is a comment frequently made by those not familiar with the practical implementation of automated performance management systems. The underlying principle of performance management is that staff members and managers should meet and have a high quality discussion, not merely type information into a computer.

8. People will do it on the computer and never meet face-to-face. Again, this assumption is a mistake made by people who are not familiar with automated systems. Staff are still required to meet face-to-face in order to set objectives and perform reviews. The benefits that accrue through the use of an online system are realised through features that help HR and line managers get the job done.

9. Using performance management for project management. In organisations that are very project orientated, line managers are tempted to use the performance management system as a project management system. Typical symptoms are the request for many objectives and extremely detailed objectives (high in number). Managers need to be coached to use summary objectives, not one objective for each project.

10. We can't justify the expenditure on a performance management system. Most CEOs want to improve the quality and quantity of their human capital output. Performance management is one of the most powerful ways to increase quality of human capital and increase output through clarity of focus.

Source: Mistakes in Performance Management, by Lyle Potgieter, president of the Performance Management Institute of Australia