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Some Essentials for Your Performance Management Process

A growing number of companies are rethinking the way employee performance is measured. Some companies such as Adobe and Microsoft have done away with numerical rankings, while others, like Accenture, have eliminated annual performance reviews altogether.  Recently, an article appeared in the New York Times describing the other extreme at Amazon, where reportedly data is used extensively for vigorous performance management.

The shift away from traditional employee evaluation methods is largely being driven by the needs of today’s workforce – chiefly, millennials. Putting this new generation through a stale and sometimes subjective process that has gone substantively unchanged for more than 30 years just doesn’t make sense.

That doesn’t mean that all companies should get on the “ditch the annual reviews” bandwagon. Performance tracking is a good idea, but there is no one formula for creating a high performance culture. The framework and methods employed can and should vary depending upon the company and its culture. There are, however, three key essential elements for all organizations to consider:

1. Set strong individual goals. Align them with company strategy.

Goal-setting is fundamental to any successful performance management process. It helps to create a workplace with engaged employees who know what is expected of them.

A company should invest time and effort in communicating its strategy to everyone at all levels. Employees want to feel like they are making a valuable contribution, so it is important to draw a picture in which all employees can see where they fit. Only then can individuals develop personal goals that link to department plans, and ultimately to the greater company mission. 

The goal-setting process should be collaborative between a manager and the team member and the goals agreed upon should be: challenging; include developmental tasks that will enhance the employee’s role today and prepare him or her to move ahead; and consider the future needs of the team, department and company.

2. Build in frequent opportunities for feedback.

In today’s on-demand environment, employees should not be expected to wait for an annual cycle to get performance feedback from a manager.

Rather than have a team leader gather performance data through quarterly or annual evaluations, check-ins should be much more frequent. Through the use of technology, some organizations are gathering performance data on individuals and teams and giving feedback in real-time - after every client touchpoint or internal business interaction.

Though companies like Amazon have recently been criticized for building a culture of “relentless” data-driven feedback, there is a middle ground. An organization can partner with an HR services company that provides clients with access to on-demand performance management systems and tools, tailored to a company’s specific culture and implemented seamlessly into the organization.

3. Keep it simple.

Creating a high performance culture is complicated. A company’s performance evaluation process shouldn’t have to be.

Strip out as many arduous administrative steps as possible and replace them with flexible processes. A long list of required forms to complete and intricate rating scales to calculate are not effective tools for evaluating or motivating people.

One size never fits all

Regardless of the company, there is no one-size-fits-all performance planning solution. Before implementing a new program or scrapping an existing one, leaders should closely examine the merits and drawbacks of doing so and gather input from employees and HR industry experts. Then, the organization can decide what really fits its culture and will ultimately motivate and inspire employees to grow with the company and achieve the desired results.