An epic shift in how companies approach performance management is occurring across the globe. Three interconnected frustrations are motivating this shift.
• Leaders are weary of the administrative burden of current performance management systems
• People managers and their direct reports are frustrated by performance management processes
• Current performance management is not creating the performance benefits many expect
In response to these frustrations, many companies are pursuing a better way. This effort is best enhanced through integration with another big people priority: improving engagement. Some industry studies point the way.
• In an Aon-Hewitt study of Global Engagement trends, we see the exciting potential of linkages between employee engagement and performance management. This research revealed that Rewards/Recognition and Career Opportunities were big engagement drivers in EMEA.
• A Mercer study on global performance management reveal that three performance capabilities are in urgent need of development
o Candid feedback
o SMART goals
o Linking feedback to development planning
A quick look at the results of both studies reveal a powerful connection between improving engagement and achieving more productive performance management.
• At the center of both people processes is coaching the development of others
• This means:
o Creating clear goals and the measures with which progress will be achieved – often termed SMART goals
o Developing plans with direct reports for how they will acquire the knowledge and skills needed to achieve stretch goals
o Having candid dialogue about what is working and what needs to be improved in overcoming the challenges associated with achieving performance goals
o Recognizing and reinforcing progress towards stretch goals
Performance management research indicates that these skills are underdeveloped among leaders. AchieveForum research emphasize the priority that many organizations have assigned the competencies that underlie success in the area. Our research shows that performance management and coaching are top leadership development priorities for several levels of leaders.
Achieving the new performance management, one that leverages these capabilities, involves pursuing a three part agenda. We outline this below.”
1. Strengthen managerial coaching skills.
Enhancing managerial skill in setting SMART goals and linking development planning to performance planning, and conducting coaching conversations are top skill development priorities. In recent polling we have done in North America and in EMEA many customers see this as their top performance management top priority. We would add that this is a top engagement priority as well.
2. Improving Direct report performance management skill
Increasing the ability of direct reports to participate in and make the most of conversations about performance goal setting, feedback and coaching is a second priority. In the new performance management empowering direct reports with these skills is vital to promoting personal accountability for performance management.
Finally, streamlining and simplifying the HR systems through which managers and direct reports access performance management tools and resources needed to do high-performance performance management is a third focal point of our three point agenda for enacting the new performance management.
Taking advantage of powerful and under-leveraged synergies between pursuing the new performance management and achieving engagement improvement priorities will help us efficiently optimize improvements in both. The three point agenda outlined will help us convert dissatisfaction with former approach to realizing the promise of the new performance management.