High growth companies are rethinking traditional approaches to performance management.
At the start of a new year, this is an ideal time for companies to rethink their traditional approaches to performance management.
Annual pay raises and bonus payments have proven ineffective at driving performance improvements, with any lift in engagement or performance lasting only 3-4 weeks, according to a Workhuman study. An even larger urgency to change is employees’ growing discontentment with the current process and their desire for more frequent, timely feedback and ongoing conversations about their work.
High growth companies are beginning to understand the potential of performance management, which cannot be achieved by an annual appraisal and a rating created from the top down. By shifting traditional performance management to continuous performance management, companies can optimise performance by enabling employees to achieve their fullest potential.
Here are four strategies for reinventing your company’s performance management in 2020.
Build a foundation of trust
Trust is at the heart of effective performance management. Building trust requires cultivating a culture of authenticity and positivity, where employees feel safe giving, receiving, and asking for feedback from colleagues or managers.
Encourage employees to participate actively in their own success
Giving employees with tools and technologies that allow, or even encourage, them to engage proactively in frequent conversations about their work and priorities empowers them to own their growth and development.
Setting operational and developmental goals with their managers that align with strategic business objectives and shared purpose helps employees understand how integral they are to the team’s success and feel more connected to their career path. It also gives them a greater sense of meaning in their work, which has a huge impact on their overall employee experience.
Approach as a coach
Managers should be encouraged to view their primary role as coaching employees to consistently improve their performance over time, rather than directing, evaluating, and trying to prove their contribution.
Make weekly check-ins a top priority to promote continual learning, improve retention, and foster human connections.
The ideal moment for feedback is in real-time as the behaviour occurs, not days, weeks or months later, so managers and employees have the benefit of addressing performance concerns immediately.
Shift from high-stakes, low-frequency feedback to low-stakes, high-frequency conversations
Annual performance reviews affect decisions about employees’ income, advancement, and continued employment. These high stakes create stress and anxiety for both managers and employees. For many employees, the formal, once-a-year performance review is the only time they receive feedback, and they may feel blindsided on discovering an issue with their performance months later, when it’s too late for them to fix it.
Continuous performance management takes the opposite approach: ongoing, frequent, informal conversations, sometimes planned and other times occurring more organically through the work day.