Rethinking performance management

Many of us have experienced a nerve-racking annual performance review.

We walk into that end-of-the-year meeting with the boss, hands sweaty and stomach in knots, not knowing what’s to come. Am I going to get a raise? Will I be promoted? What if I’m demoted!? What if I’m put on a performance-improvement plan!?!

Only when the door closes behind us is our fate revealed.

The good news is that many organizations are taking a thoughtful look at their performance management programs with an eye toward making the process more of an ongoing, transparent conversation, rather than a once-a-year judgment day.

“Many of us in HR believe the best way to improve employee performance is to improve both the quality and quantity of conversations happening between leaders and employees about performance,” says David McMonagle, senior manager of Organizational Effectiveness at Strategic Education, Inc. “People appreciate feedback, but they don’t like being harshly and unexpectedly judged.”

Why the need for change?

Beyond the often unpleasant experience of traditional performance reviews, there are other very solid business reasons to rethink performance management, McMonagle says. Namely, he says that when employees experience transparency and forthrightness from their employers on how they are performing, they are likely to be more engaged and give 100% to their roles. They also value ongoing feedback throughout the year, which provides ample time to pivot if needed.

“Performance management should really be about partnering with employees on how they can be their best,” McMonagle says. “Everyone should know where they stand at any moment in terms of job expectations and how well they are meeting those expectations.”

Avoid surprises

In the spirit of no surprises and knowing exactly how one is performing at any given time, McMonagle advocates for scheduling dedicated performance conversations throughout the year. By that, he means schedule time for a performance conversation and a performance conversation only. Don’t tack it onto the end of a weekly one-to-one meeting.

“These are conversations that need to feel special,” McMonagle advises. “They can’t get lost in the shuffle of day-to-day work.”

Sina Saunders, manager and HR business partner at Capella University, adds that more frequent performance discussions also provide people managers with additional opportunities to hone their leadership skills.

“When performance management becomes a regular part of a manager’s workday, it provides an incredible opportunity to develop people-leading skills,” Saunders says. “It enhances their ability to have the crucial conversations they need to have and to think about the development of their teams.”

 

Be thoughtful about ratings

To avoid the stigma of being judged, some organizations today are getting rid of performance ratings altogether. McMonagle says that can work in some instances, but he advises to tread carefully before scrapping your rating system.

“If one employee gets a raise or promotion and someone else doesn’t, and you don’t have some sort of rating structure, people will question those decisions,” McMonagle says. “Employees deserve clarity about what success looks like. There should be as much consistency as possible across the organization.”

Furthermore, he says that managers can actually have better performance conversations when they can lean on specific metrics and standards that are meaningful to the success of the team and individual. “Performance management metrics and ratings should be helpful, expansive, and constructive,” McMonagle says. “There is no reason to throw out metrics and the accountability and clarity they provide. They just need to be well-defined and communicated.” 

In summary, McMonagle and Saunders recommend organizations take a fresh look at their performance management programs with an eye toward making the process more transparent, less anxiety-inducing, and an overall constructive process for everyone involved.

“Performance management doesn’t need to be a stress-filled experience,” McMonagle concludes. “When done as part of the open, ongoing conversation, it can build a stronger bond between manager and employee, and become a productive, positive experience.”

Develop the competencies to design the performance management programs of the future with an online degree in human resource management from Capella University