Redefining Performance Management

Over time, performance management systems have evolved in content and approach. There are many well rounded and interesting technology-based systems to help leaders enable the performance management cycle in the context of talent management. Most performance management systems now also provide for a robust review of not only what people are expected to deliver (KPI’s), but also the behavioural side based on organisational behavioural expectations.

Yet the question arises - is performance management working?

The real driver of a performance culture
There is plenty of evidence that suggests the sophistication of performance management systems has not delivered the performance cultures anticipated. Often managers get bogged down in the performance management system process, and fail to deal with the real driver of a performance culture: the development discussions that enable the right performance levels in others.

As the pace of organisational life and change accelerates, there is a drive towards simplification of performance management to enable organisational outcomes with less bureaucracy and more agility. There is a real opportunity for HR and leaders to get the performance management system right with a rethink on what is important.

No longer an annual event - it's a continuous conversation
DDI, a global leader in talent management solutions, highlights that performance management has evolved into a much broader practice in the contemporary talent system; and is no longer simply an annual event.

From DDI’s perspective there are three reasons why organisations are investing in performance management - strategy execution, engagement/retention, and talent development. Leaders need the ability to lead effective conversations focused on delivering the right outcomes and coaching and developing others. These discussions can inspire talent and enable performance in the context of the organisation's needs.

In Bersin & Associates’ recent report ‘High Impact Performance Management’, it offers a simple definition of what this means – “performance management is management”.

Add coaching and development planning to the mix
Another Bersin resource, the 2014 Talent Management Cookbook, highlights a shift to a new performance management model. The classic performance management approach had three distinct annual steps of goal setting, assessing and rewarding, and sat outside the day-to-day leader/employee relationship. Under the new model, Bersin argues that performance management becomes part of the daily activities that deliver outcomes, emerging out of well rounded coaching and development conversations. It is an ongoing part of the relationship with employees, involving a continuous cycle of goal setting and reviews with well rounded feedback; with coaching and development planning integrated into regular discussions.

Their view is supported by others - for example, Hewitt in its position paper, ‘Rethinking Performance Management as a Business Tool to Spark a High Performance Culture’.

This new model requires more agility and flexibility in performance management systems, to support a focus on coaching and developmental conversations. It also requires well rounded leadership ability to lead those all important conversations.

Much of Sheffield’s work in the performance management area reflects these changes and we are happy to have a chat if you are interested in finding out more.