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The performance management process at most organizations tends to be broken. A surprising number of people in the field of human resources and talent management see it this way.

Fixing it will yield much greater results for the business and employees, yet the same old systems remain. 

In this article, I’ll cover some of the common issues with performance management processes. I'll then share some performance management best practices to address them and improve your own strategy:

Let’s go. 

Performance Management, The Great Divide

When it comes to the performance management process, there tends to be a disconnect between how executives view performance reviews and how the employees view the process. 

From a study conducted by Wakefield Research and commissioned by Reflektive:

“While 94 percent of executives are confident that employees are satisfied with their company’s performance review process, the reality is most employees feel the process is outdated (61 percent) because it’s too generic (22 percent) or too infrequent (6 percent), and often incomplete (62 percent).“

How can executives be so out-to-lunch when it comes to the performance management process? Granted, if it’s not something that they are taking part in on the regular, it’s easy for them be removed from and not understand ongoing performance. 

Image Of The Most Executives Are With Performance Management
How most executives are with performance management.

Now, in contrast, research conducted by Mercer on Performance Management found that: 

  • 95% of managers are dissatisfied with their organization’s performance management system.
  • 90% of HR heads believe their performance management system does not yield accurate information.

From research conducted by Deloitte:

  • Only 8 percent of the HR respondents in our survey believed that their performance management process drove business value.

From here, let’s move down another level and get into the world of employees — those that are going through the performance management process to measure their ongoing performance. What tends to be their main gripes regarding the performance management process?

Returning to the study conducted by Wakefield Research and commissioned by Reflektive:

  • More than half of office professionals want performance reviews or check-ins with their supervisor at least once a month, but 69 percent of executives say they still only conduct performance reviews or check-ins on an annual or biannual (twice a year) basis.

Takeaway: the annual or bi-annual check-in is a relic of the past yet, much to the ire of HR professionals, many organizations still make use of it. Compare that to organizations that have created a performance management system that includes regular feedback, and real-time check-ins, and the difference is night and day.

Now we’ll take a look at some of the best practices that have emerged with performance management over the last several years and how you can utilise them at your organization. 

If you want further information on why performance management is important, read our article here.

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Performance Management Best Practices

So now we know some of the flaws with performance management, we can now focus on some best practices to get it right.

Making Use Of Continuous Performance Management

As mentioned above, a majority of organizations still conduct performance reviews or check-ins once or twice a year, while over half of employees want performance reviews or check-ins with their manager at least once a month. 

Why is there such a large gap between what management is doing and what employees want? 

There can be a number of reasons. Perhaps it’s the way you’re used to doing things. Again returning to the study conducted by Wakefield Research and commissioned by Reflektive:

“58 percent frequently reschedule or delay employee reviews because they didn’t have enough time to prepare and end up spending an average of 15 hours of personal time preparing for an annual review.”

Instead of doing smaller check-ins throughout the year, management can end up procrastinating in conducting performance reviews because it’s a lot of upfront work.

Continuing from the study above:

“68 percent of executives say they learn of employees’ concerns or issues for the first time during a performance evaluation.”

We’re seeing again and again how detrimental annual or bi-annual performance reviews can be. Instead of quickly being addressed thanks to more real-time feedback, issues grow over a period of time. In some cases, employees may leave for greener pastures and this could’ve been prevented with continuous performance management.

Again with the above study:

“Nearly half of employees don’t feel comfortable raising issues with their boss between formal performance reviews, but nearly three-quarters say they’d be more proactive in raising issues or concerns if they received more frequent feedback.”

If employees have the option for continuous feedback you’ll be able to nip problems in the bud much sooner, before they spiral out of control and become the elephant in the room that no one will address.

Gif Of The Elephant In The Room
The elephant in the room that no one will address.

It’s clear from all the research above that traditional performance management is broken and that moving to an approach that is more real-time, with more frequent check-ins, will do wonders for employee performance.

For more on how to properly conduct continuous performance management, read our article here - Continuous Performance Management: Why + How To Do It.

Case Studies Of Performance Management With Greater Levels Of Check-Ins

For one of the most notable cases of an organization overhauling their performance management system, look no further than Adobe. 

Here’s an excellent paper looking at what they did: Death to the Performance Review: How Adobe Reinvented Performance Management and Transformed Its Business. Here are some of the key points:

  • In 2012, Adobe decided to end annual performance reviews in favor of check-ins, which are an ongoing dialogue between employees and their managers. 
  • The average total time investment for managers on annual performance reviews was about 40 hours/manager. With about 2,000 people managers, this meant Adobe was spending about 80,000 working hours on annual reviews. 
  • In annual employee engagement surveys, the annual review was one of the top processes that needed improvement.
  • With their new check-in system quarterly meetings were the suggested minimum, with a goal-setting form provided for employees.
  • Ongoing feedback was emphasized, pushing towards as real-time as possible.
  • Turnover increased by about 2-3%, which Adobe considered a positive. The reason for this was identifying earlier underperforming employees and terminating them, or underperforming employees deciding to leave after having open discussion with their managers. 

Getting Buy-In For Change To Continuous Performance Management

How did Adobe get the buy-in from executives to implement these changes to their performance management process? It is somewhat of an amusing story. 

According to the paper mentioned above, here’s what happened at Adobe:

“Things took an unexpected turn when I flew to Bangalore, India, for business meetings. The local marketing team had scheduled a press interview with the Economic Times of India, one of the country’s most widely read business newspapers. I was very jet-lagged, and the journalist interviewing me was quite aggressive, pushing me on whether the HR function really has any strategic impact in an organization. In an unfiltered moment, I shared my opinion that annual performance reviews were an outdated and unproductive process, and we intended to eliminate them at Adobe.

Later that day, the marketing team told me that the journalist planned to run a front-page story. It ran eight days later, “Adobe Set To Junk Annual Performance Appraisals.” This was definitely not the way I would have chosen to launch my idea, especially when I had not yet shared it with the CEO!”

From here, an internal blog was written about switching to a more ongoing approach, which saw great enthusiasm from most employees. 

Now, you may not be in a position like Adobe, where external factors forced the hand of switching performance reviews to continuous feedback, but you do have other options. 

You could try throwing all the above stats at executives and hope they’ll take note — but if that were the case, change would be so easy. 

Looking at what Adobe did, try something like an internal blog or survey to get support and feedback from employees that you can then present to management as a firmer case. As I mentioned at the beginning of this article:

“While 94 percent of executives are confident that employees are satisfied with their company’s performance review process, the reality is most employees feel the process is outdated (61 percent) because it’s too generic (22 percent) or too infrequent (6 percent), and often incomplete (62 percent).“

If you can get this internal showing of feedback and support, you can make clear how pronounced the difference is between how executives view their performance review process and what the reality is. 

Managers As Coaches

One of the best things that you can do for effective performance management is to emphasize, with managers, the importance of ongoing employee development. 

By focusing on continuous performance management, you can move away from the dreaded annual performance appraisals that, from the research above and personal experience, have done more harm than good in the long run. 

By having more real-time feedback from managers, more akin to coaching, employee competency can be identified much sooner along with areas that need improvement in an employee’s performance. 

Instead of having these potential issues build up over a period of time before they are addressed, they can be addressed in real-time and greatly enhance employee development. 

As was mentioned earlier in regards to research in this area: 

“Nearly half of employees don’t feel comfortable raising issues with their boss between formal performance reviews, but nearly three-quarters say they’d be more proactive in raising issues or concerns if they received more frequent feedback.”

Goal Setting

While clichéd, I’m sure we’re all familiar with the expression “what gets measured gets managed”. 

As well as setting business goals, your organization should also dedicate plenty of time to establishing individual goals for employees. By having these individual goals, employees have a better understanding of what makes for good performance and have a sense of direction of where they should be going. 

One of the best things you can do for setting individual goals starts at the beginning when bringing in new employees. For more on this topic, check this article out on creating 30-60-90 day plans for your organization’s onboarding.

When it comes to goal setting there are plenty of options, but one thing to be clear on is that this should always be a collaborative effort with employees. You want to tie them with business goals, be measurable, establish metrics that make sense, but you should also have flexibility when it comes to professional development for employees. 

There are many different strategies and frameworks when it comes to setting goals in your performance management system. Google, for example, makes use of the Objectives and Key Results system (OKRs) systems for goal setting. For more on OKRs, check this article out on the 10 Best OKR Software Compared.

Next Steps For Your Performance Management 

Now that we’ve gone over some of the best practices when it comes to performance management, where can you go from here?

Firstly, you want to have an understanding of where your performance management system currently stands. Perhaps you already make use of continuous performance management, or perhaps you still make use of the old annual performance review. Identifying where your organization is at will help in deciding where you need to go next. 

From there, start to really drill into what currently works, and what doesn’t, about your performance management system. Don’t go to executives about it—go to the frontlines, the employees that are on the receiving end of performance appraisals. From there, you’ll gain a much better understanding of where you need to improve your performance management system.

One of the best ways to identify the strengths and shortcomings of your performance management system is by employee journey mapping. With this technique, you lay out the story and journey that employees go through when it comes to performance appraisals. 

Should you wish to make use of the employee journey mapping above, I provide facilitation services to help guide your way.

Performance management tools can be a great help in the process as well as they

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