We were recently consulted by the owners of a fast-growing engineering company to help them re-think their performance management and appraisal systems. They had an annual appraisal process in place for reviewing the performance of their people and felt that it couldn’t capture the quality and improvement that was able to be implemented by their people within their fast-paced company. Nor could it aid their people to grow and develop in ways that would boost their confidence to take up the needs of the organisation as it evolved.
They reported that their managers were not able to keep in touch with the variety of work that was being done, nor monitor the changes and upgrades that their people were accomplishing to enter them into annual appraisal forms. People themselves forgot their achievements and so were not recognised when it came time to review performance and salaries. And, they weren’t aware of how their development was congruent with the direction of the company.
What follows is a few of our recommendations to them, which can be of value to any HR unit who currently use more traditional approaches to performance management and experience resistance from managers to completing forms and engaging fully in a long appraisal processes. Traditional one appraisal per year often means significantly more paperwork for already busy and overworked HR and people teams.
The approach we suggest is that of an integrated Performance Management and Talent Development System. It Is one of continuous learning and development, employee self-organised and motivated with enforcement and encouragement from managers, colleagues and other team members. It has 2 strands – talent development and performance management.
Talent development includes the identification of an individual’s talents (such as via the Talent Dynamics assessment or the Clifton StrengthsFinder), and then how the person and their manager in particular provides work to utilise and help them develop those talents into well rounded and developed strengths. When talent development becomes a team matter, (launched and promoted via an annual group workshop) then peers can also become engaged and supportive of others growth by leveraging each other’s strengths and through greater collaboration in work.
Managing for continuous performance improvement and elevation – includes continuous review and evaluation and feedback from managers and colleagues, such as that described in the informally simple 360 degree feedback which Netflix uses.. “We kept them fairly simple: People were asked to identify things that colleagues should stop, start, or continue”. We would promote this type of continuing peer-derived feedback, in this and similar areas. The content of such conversations can be kept online and added to each person’s records throughout the year.
If you implement such performance management systems as described above, you can then get rid of yearly appraisals entirely. Introducing the correct Talent Development and Performance Management process and system allows you to align every person’s contributions to your organisation’s structure, purpose, objectives. So the end of year review becomes a collation of the input throughout the year and a review of the Individual Development Plan that was put in the place the previous year.
This is our favoured approach. It’s a much more ‘adventurous’ approach (and could even be considered radical). We all know that yearly appraisals have too many draw backs, including that they are very inefficient and grossly time consuming and are often just filed in the ‘bottom drawer’ until next year’s appraisal, by both appraiser and appraisee.
Individual Development Plans
IDP (Individual Development Plans) are the ownership of the employee, with development objectives that can be utilised but in a much simpler and streamlined format. The IDP is used continuously rather than being ‘resurrected’ at the time of the yearly appraisals. In a simplified and more concise form, then the IDP’s are easier for employees to refer to and use themselves and keep up to date. They’re personal and can provide the self-empowerment for individuals to grow and develop their innate talents and skills, not just in one role, but continuously.
By changing the performance management process to ensure that people take ownership of their own development and growth, they can more easily understand the objectives of the organisation and where they fit into it. Business objectives can be cascaded into their IDP’s and monitored continuously, or certainly quarterly when managers need to report on the achievement of their business objectives. Thus harmony between the organisation and the individual facilitates greater agility to respond to the needs of the organisation, and ensures engagement and retention of their people.
10 January 2020