Managing performance has taken a long and winding road
Managing performance has taken a long and winding road with varying degrees of success. Through the ups and downs of effectiveness or misalignment with people and business strategies, managing performance remains a fixture on the list of have-to-dos.
However, the past few months consumed by global crisis has offered few lines of sight that support tried and true methods of managing performance. Some managers have eased performance expectations allowing space for the unknown brought on by a pandemic-inspired new normal. Others have cracked the whip requiring even more productivity now that interaction with their direct reports has been limited to views above the shoulders.
As the trajectory of coronavirus infections trends downward and businesses contemplate how best to re-open their doors, the realisation that longstanding performance management practices are inadequate has begun to set in. Now that people leaders are starting to exit the belly of the pandemic beast, three questions are causing them to shelter in place:
- Do pre-pandemic performance management practices fit post-pandemic realities?
- Are direct reports better positioned than their line managers to assess performance and development?
- Do teams have a more relevant perspective than their managers to navigate challenges in real time and apply capabilities with greater competitive advantage?
The best view of performance is on the field
Performance management is generally comprised of activities between managers and subordinates that are conducted throughout an annual business cycle with the intent to:
- Set performance goals and objectives;
- Establish plans to develop knowledge, skills and abilities;
- Check in informally throughout the year to assess progress toward performance goals and development objectives;
- Formally assess development mid-year and performance at year’s end;
- Determine performance and development achievements;
- Identify performance and development gaps, and future requirements; and
- Validate performance calculations and remuneration outcomes.
While managing performance is defined by one-way, linear processes, the drivers of performance management activities are often incongruent with perspectives and needs. Managers lack the ideal vantage point to be truly insightful. As a result, their subordinates get backward looking feedback that may be irrelevant to future performance. While technology has made the process of assessing performance and planning development more efficient, the value of the process itself remains antiquated, if not wholly unsatisfying.
To borrow a sports analogy, player-coaches are only used in amateur leagues. In the big leagues, coaches manage from the sidelines and offer their guidance before the game. After managers define the purpose and set the direction, it’s up to players to deliver on the field.
In the end, players are best positioned to assess each other’s performance on the field.
Teams are nimble enough to make changes in real time to maximise the contributions of their individual capabilities. If for no other reason than their proximity to each other and commitment to a common purpose, a team’s acute ability to assess itself is at the core of managing performance, development and change. Why, then, do we expect the coach to be the best arbiter of performance and development while positioned well off the field of play?
Changing performance mindset
Managing post-pandemic performance questions the narrative that managers are required to witness performance firsthand and assess input and output granularity. As the number of people working remotely increases, interaction between people leaders and direct reports is likely to become more physically distanced. Focus will shift away from validating tightly wound metrics toward facilitating a performance contribution mindset. In the new normal, managers guide and direct through both virtual and in-person touch points. People leaders develop a well-defined purpose supported by values, behaviour and culture. Direct reports are given the autonomy to assess themselves as a team. Responding to challenges in real time, teams make decisions about the applicability of capabilities. Reflecting on their collective performance, individual team members develop and are held accountable for knowledge, skills and abilities that best contribute to the team’s performance. Performance contribution mindset outcomes are valuated by a managers’ ability to translate purpose into team performance on the field in both meaningful and measurable ways.
Into the post-pandemic performance void
JoAnne had been promoted to property recruitment manager at the end of last year. But in just a few short months, the pandemic shutdown had challenged her thinking about leadership in general and managing performance in particular. Performance management systems and processes that were once routine, no longer fit the future of working. Consequently, she needed to rethink and communicate her team’s purpose, set a clear direction, think ahead to the end and listen more than she spoke. JoAnne realised that her most important asset was her ability to lead with the big picture in mind. She could see the entire game in her head, know which players needed to be on the field, communicate key messages from the sidelines and guide purpose from beginning to end.
When recruitment orders started falling from revenue pipelines at the start of the pandemic, JoAnne’s peers began to panic. With every placement pulled from business development lists, managers began letting recruitment staff go. From their perspective, if recruitment teams were unable to hit their revenue targets, a pre-emptive retrenchment strategy would reduce overhead costs. By doing so, or so they believed, they would save their own jobs until the market returned to normal.
JoAnne saw the challenge of the pandemic through a different lens
Based on JoAnne’s thinking, the coronavirus pandemic would indeed slow down revenue cycles. However, she also believed the market would return to a new normal. The new normal, in parallel with new ways of working, would require deeper, evidence-based relationships with customers. Customer data, insights and experience would be leveraged to anticipate needs and develop market-disrupting products and services.
JoAnne conceded that new ways of working would not only change how the business engaged with customers, but also change how the team talked about performance. She envisioned her team applying their skills to create customer value and drive competitive advantage. Her role would be to provide direction, get out of the way and allow the team to determine how best to allocate their unique capabilities and customer-related resources.
An essential part of JoAnne’s strategy was bending the arc of performance management toward aligning purpose with performance contribution. She needed to give her team a clearly defined purpose that would inspire them to focus on making the big picture come to life. With purpose in mind, she would guide them to embed a culture of performance contribution using values and behaviors. In turn, the team would translate purpose into customer-focused performance setting them up for success now and post-pandemic.
Five tips for managing performance contributions
1 – Start with the end in mind. Define and commit to a purpose.
It’s difficult to manage performance without a clear objective in mind. It’s even more difficult to achieve high performance standards without knowing what to do well – especially from a distance. Defining and committing to a purpose is an opportunity for people leaders to paint a performance picture. It’s also a platform to communicate a compelling story in which direct reports visualise their roles from beginning to end. With purpose in mind, everyone has a clear sense of what is expected of his or her performance. Similarly, teams know the level of capability expected from each other and leaders know what is expected of their leadership – regardless of their proximity to each other.
2 – Establish a performance contribution culture. Identify and embed values and behaviours that support a contributive culture.
Cultures are purposeful and so too are the values and behaviours that reinforce them. Managing performance granularity emphasizes a far less empowering culture compared to delegating authority to teams to assess their own performance as unique contributors. Embedding self-assessment into the culture of a team allows them to set a standard of performance contribution necessary to achieving the purpose. Culture emanating from high performance team standards not only establishes the value of a contribution mindset, but also reinforces behaviours underpinning specific contributive inputs, outputs and outcomes.
3 – Build trust, advise and get out of the way. Share ideas and insights as a trusted advisor.
People leaders provide the most valuable insights when they decide to let go of the wheel – especially when someone else is driving. Focus on building trust, advising purposefully – offering specific ideas, insights and perspectives that translate purpose into performance. As a trusted advisor, less is more. When trust is established, teams ask for and then apply advice as appropriate to their performance and development needs on the field. In return, people leaders will need to let go, get out of the way, and have the patience to allow the reservoir to run low before identifying an opportunity to offer purpose-led advice again.
4 – Align performance contributions to customer relationships. Contribute to relationships.
In many ways, the coronavirus pandemic has levelled the commercial playing field. Organisations of every size and strip have been reduced to a least common denominator. Relationships. Calibrate performance contribution metrics that add value to customer relationships. Qualitative value has greater sustainability and leverage than quantitative volume. The length and depth of customer engagement is more valuable than the number of customer calls made. Listening and asking questions goes further to establishing a deeper understanding of customer needs than upselling product lines. Contributions that reflect both customer relationships and understanding are more likely to have greater performance value.
5 – Prepare performance systems, processes and expectations for an evolving new normal.
The residual effects of COVID-19 are likely to continue with areas of impact less obvious than others. However, the new normal isn’t a destination; it’s a continuous evolution that will have as many far-reaching consequences for some as it creates niche opportunities for others.
Performance systems and processes can be unforgiving if set too rigid to be adaptable to change resulting from within or outside an organisation’s span of control. Instead, performance expectations should be communicated through the lens that a continuously evolving new normal demands.
About the author:
Dr Wesley Payne McClendon is chief executive, thought leader and Executive Director, McClendon Research Group, Inc. Wesley was previously Chief Strategy and Transformation Executive and Board Director at Gooroo (ASX-GOO); Managing Director and Professor, Edinburgh Institute (UK and Hong Kong); Partner and UK Practice Leader, Mercer HR Consulting (London); and Principle and Melbourne Practice Leader, Ernst & Young (Australia). Dr McClendon is author of more than 25 articles and 2 books including “Strategy, People and Performance.” A third book, “Leadership, People and Culture Due Diligence in M&A, Integration and Restructure,” will be published later this year.