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Career Growth vs. Performance Management

October 12, 2016  |   Performance Management,Uncategorized   |     |   Comments Off on Career Growth vs. Performance Management

BCR-increased-productivity.jpgIf you have had your nose to the grindstone for the last year (or buried in performance review forms), you may have missed all of the coverage of high profile companies significantly overhauling or even completely doing away with their current performance management (PM) processes.

Companies like Adobe, Microsoft, Dell, Juniper and (gasp) GE have recently decided to take a completely different approach to formally evaluating employee performance. This is welcome news to many – maybe even most – employees and managers who found the traditional process an administrative burden that all too often didn’t drive higher performance or greater engagement. Maybe the term performance “management” was the first clue that what was happening via these PM processes was a maintenance of the status quo versus driving higher results and developing better talent.

Performance Management:
Performance management is a process that provides feedback, accountability, and
documentation for performance outcomes. It helps employees to channel their talents
toward organizational and personal goals.

But not so fast. PM systems, in some form, serve a very important role in the business. How can a company with thousands of employees and managers distributed all over the globe ethically, legally and successfully track, develop and reward people if they don’t have a formal way of setting goals and evaluating performance nor an objective measurement against which to make promotion and pay decisions? Simply doing away with the current PM system is a bold move but doesn’t address the critical role that PM systems were created to play and doesn’t inherently create a solution to fill the void. An alternative approach to doing away with a formal PM system is to make incremental changes that better reflect the cadence of the business and the development culture the company wants to achieve.

Anyone can agree that setting goals, documenting progress towards said goals, and rewarding employees who achieve goals while addressing the problem of missed goals is a proven method to getting results. So what about the traditional PM systems isn’t working? Experts tend to agree that some very basic human instincts as well as realities of the way work gets done in the 21st century are at the core of why the current systems tend to under deliver.

Reality #1
Business doesn’t run on an annual cycle and neither do people.
There is no magic in setting and measuring annual goals vs. setting goals when the need to do so arises. The annual process probably gained favor because the PM process took so long – no one wanted to do it more frequently. But opportunities for development happen continuously. Agile, talent development-centric companies will empower employees to set and manage goals that reflect the business, not the HR process timing.

Reality #2
Managers don’t like to have tough conversations and employees don’t like to be surprised by them.
An annual review program preys upon most managers’ instincts to avoid delivering bad news and criticism until forced to do so. Employees typically either want to know or already know where they stack up – thus leaving reviews in a black box until once a year creates a disingenuous and backward looking process that doesn’t best serve anyone. If managers deployed successful coaching techniques, frequent development conversations become a continual two-way street of accountability, collaboration and course correction.

Reality #3
Employees’ best work is often invisible to the manager. The relationship of manager and employee has several distinct differences today than in the time when the concept of PM was developed. The first being proximity and workflow. In large, diverse companies, the direct manager is often not the person best suited to evaluate the employee’s successes and development needs. Teams and projects are often distributed throughout the organization and even the world, leaving the direct supervisor with an outsider’s view on the employee’s work life. Secondly – employees in diverse teams who have highly developed skill sets may not see their manager as the “expert” in what they do – hence goal setting and development conversations should include colleagues that truly impact the employee’s growth, not just line up on an organization chart.

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Business doesn’t “get done” on an annual cycle anymore. And personal development never did. So the traditional approach to an annual review cycle does not meet the needs of the business nor drive greater performance and engagement. As an evolutionary step, companies should consider a career growth cycle. The career growth cycle takes all the basic concepts of the traditional annual review cycle into account. The following chart shows how your Company can evolve its current pay process into a career growth one.

In Summary:

All the hype of abandoning traditional Performance Management programs doesn’t take into account that PM systems serve a critical role in successful businesses and committed and productive employees. Shifts in how PM is executed is going to bring about the greatest results. Orienting towards frequent coaching vs. annual reviews and re-imagining manager and peers’ role in an employee’s development are two ways to make PM more relevant. What employees most want – specifically a pathway to towards a more rewarding career – can be made a reality by a more dynamic and agile Performance Management system.

Contact Us:

BCR has experience in working with organizations on retooling their Performance Management approaches and processes. Reach out to us if you should want to explore how we can assist your organization further in ensuring your organization’s valuable human resources are being truly rewarded for their performance.

Written by: Sheila McCarthy, BCR Consultant

BCR is a local, minority-owned firm with more than 25 years experience in serving non-profit, public, and privately held entities in the key areas of Benefits and Compensation Consulting, Performance Management, Human Resource Organization Development, and Human Resource Information Systems and Processes.

 

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