For some time now, organisations large and small have been questioning the performance management process and its benefit to them in providing greater organisation performance.
Changes are already underway
In a recent study, PWC found that 96% of organisations are either currently changing or planning to change their performance management processes. Traditional rating systems used by many large organisations are thought to inhibit collaboration and engagement and subsequently reduce customer focus and business performance.
A number of large organisations such as Microsoft and GE have paved the way recently by removing their performance management rating system to create a more agile and fluid approach to managing performance. The removal of these systems has quickly demonstrated a significant improvement in collaboration as staff were no longer being compared against one another through a forced curved rating system.
The move to a no-rating performance system and the typical once-a-year performance discussion is encouraging more regular discussions between managers and employees to get just-in-time performance information.
These more frequent discussions subsequently lead to greater staff engagement, understanding of staff performance, motivations and development needs.
So what are the implications to learning?
Following this trend and associated research there are two key learning implications we see:
- Implications to managers
- Implications to individuals
Implications to managers
With the removal of the rating system, managers will need to find opportunities to engage with their staff more regularly to ascertain their performance and areas for development.
As always, there will be managers who are good at these conversations and take the initiative and those that avoid them like the plague – often as a result of not knowing how to conduct an effective discussion or feeling they need to have all the answers.
Some learning and development considerations for organisations moving towards a no-rating system could include:
- Create awareness and understanding of the new system and how performance will be managed across the organisation, including their renewed accountabilities
- Develop capability to provide just-in-time feedback and development coaching to support employee growth
- Understanding the difference between performance and development conversations and how to conduct them
Implications to individuals
With the removal of a formal rating system, employees may miss the opportunity to understand how they are tracking and how their performance is viewed by their manager and the organisation.
We know this is an important contributor to employee engagement and particularly important for younger generations. Organisations often find that employees expect management and the organisation to provide development and career opportunities rather than what should be a shared accountability.
While ideally managers should encourage regular performance and development discussions, this may not always occur. Employees will need to encourage and initiate these conversations with their manager.
Organisations could consider the following development for employees:
- Develop employees’ awareness of the new performance management approach and how this relates to their role
- Create awareness for employees on their joint accountability to initiate performance and or development conversations with their manager
- Develop employees skills in having a performance and development conversation
- Grow employees’ knowledge in identifying their development needs and how to gain support from management and more broadly across the organisation in actioning these development needs.
A worthwhile journey
Moving away from traditional performance management processes will no doubt be a challenge for some organisations, managers and even employees.
But the benefits of a more agile, personal and collaborative approach for the individual and the business alike will far outweigh the growing pains.
Rock and Jones, HBR, September 2015