What does performance management look like?

At its simplest, performance management is the method of structuring daily activities and developmental tasks in order to achieve a set of clearly defined goals.

In a traditional workplace environment, this is often represented as a quarterly or yearly meeting between an employee and their superior. This discussion often focuses on the progress made towards achieving those goals, the challenges faced and any adjustments that need to be made. Done correctly, a well-structured performance management system gives a direct financial benefit as well as improves the motivation of a company’s workforce. If implemented poorly, it can become another way in which employees feel underappreciated and underutilised.

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In recent years, there have been movements that aim to redefine performance management for a modernising workforce, looking to improve the cyclical nature of the system and to enhance employee engagement. But how do senior members of the team look at redefining what performance management means to their business?

Defining strategies for a new approach

Performance management in a modern office should be directly tied not only to improving productivity and efficiency but also to employee engagement. Separating performance management from appraisal is a strong initial step: during which the activities taken to achieve goals are separated from the employee’s relative performance in achieving those goals.

However, there are a variety of research approaches and it is crucial that a company chooses to define performance management in ways that best align their business goals with that of its employees. There are a few different approaches that businesses can consider.

1. The Continuous Approach

Recent discussion around performance management looks at the ways in which it can become more engaging by increasing the frequency of appraisals and meetings related to goals. This new method suggests that once or twice a year is not enough to keep employees engaged with their own personal development. This means making shorter, monthly discussions that break down larger activities gives people the opportunity to more easily apply their performance to their daily work.

Many major companies like Adobe have adapted this continuous approach, ditching the sporadic check-ins and repositioning performance management as an ongoing discussion point for senior employees and their staff. Typically future-focused, this new definition of performance management as a constantly-evolving set of activities keeps employees engaged with smaller goals to achieve rather than a larger overall aim.

Does it keep employees engaged? Companies like General Electric, who ditched their notoriously tough performance management reviews after three decades, found a shift in HR thinking from over-focus on process to favouring positive outcomes.  

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2. Integrating Performance and Wellbeing

With more than a third of the UK workforce suffering from anxiety, depression or stress, performance management and employee engagement should be tied to employee wellbeing, according to one of the new trends emerging over the last few years. Productivity is one of the first things to suffer with a stressed workforce. But, by aligning performance management strategies with regular check-ins on how employees are coping with and managing work, this alleviates pressure and allows employees to focus on the activities that will help achieve their outlined goals.

Employees are beginning to expect businesses to help look after their wellbeing, with large businesses adopting questions around employee health in their regular check-ins and performance management meetings.

Studies have shown a strong link between workplace performance and employee wellbeing, making this a critical part of any effective performance management discussion.

3. Technology and Performance Management

With the inevitable rise of technology as a key decision maker in many areas of business from finance to HR, it is clear that bringing technology into performance management reviews is an avenue that should be explored.

AI and its impact on HR decision making processes is an area where performance management could be enhanced by technology, especially across larger enterprises. Focusing solely on managing data more efficiently – discussions have taken place focusing on how to link employee wellbeing and performance into a tangible outcome. If AI can calculate simple outcomes on ways to improve an employee’s workload and goals to increase productivity, then that could leave HR staff to focus on improving the wellbeing of their employees.

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And if AI feels too far, technology can also streamline the performance management model through clever application of “people analytics”. This report by Deloitte discusses how organisations are massively investing in using people analytics, with a view that your employee data can give a clear and unbiased indication of where your business can perform better.

Whether or not technology will have a direct impact on employee engagement remains to be seen, but with some of the biggest businesses in the world adopting disruptive technologies, there is a strong argument for using it to enhance business’ performance systems.

Implementing changes

With global employee engagement at an all time low, the time for radical shake-ups in performance management is fast approaching. But implementing these changes can be costly, difficult, and if not aligned with what employees want, they can be underutilised and may even have the opposite effect.

Change needs to be explained clearly, rationally, and in a discourse that is ideally two-way between employees and senior staff. When a business has thoroughly researched a new performance management system, the steps to redefine what performance means to the business has to start with getting employees on board.

This can be achieved by setting expectations and allowing staff to air misgivings in a non-judgemental environment – after all, there may be genuine tweaks necessary that only the people who do the daily work in a business can identify. If your employees feel they are involved in not only the appraisal part of the process but in its initial development, then this will improve their engagement with performance management as a whole.

Above all, performance management is changing. In order to be successful, the nature of how we measure the goals and activities employees partake in must reflect new expectations of engagement and involvement in business. If your workforce is not engaged, then they will not perform at their best.

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