Managing Performance Without Losing Your Marbles

There is no simple formula for getting the best performance from your employees, but your approach to managing performance could be a significant barrier. 

“Ideally, performance management helps address skills gaps and builds on strengths that will carry someone forward in their career,” says Jeff Reid, Co-Founder, COO & CPO of SkillCycle. “That’s essential to remember from a mindset and process standpoint.”

Through this lens, a traditional approach to employee performance management doesn’t quite appear to meet the bar. In many cases, it’s an administrative function HR teams must navigate rather than an effective means to develop people across an organization. 

There are some staggering numbers related to how people at all levels view performance management. Only 2% of CHROs from Fortune 500 companies strongly agree that their existing performance management system actually encourages employees to improve. And just 20% of employees report their performance reviews seem fair or inspire better performance, according to Gallup. 

In this article on moving beyond traditional performance management, we’ll explore:

• 5 reasons to move beyond traditional performance management 
• How to identify challenges in managing performance 
• The impact of outdated performance management tools
• Combining people development and continuous performance management 

5 reasons to move beyond traditional performance management

Although the dialogue around how companies manage performance has evolved over the years, a traditional approach still reigns supreme in many organizations. 

Managing performance isn’t just about ensuring the work gets done every day. Performance management enables companies to translate strategy into clear priorities, direct resources to critical initiatives, and help individuals know where to focus their efforts, according to McKinsey.

In many organizations, HR teams still conduct performance reviews once or twice per calendar year, ranking employees on their past performance. This process is often stressful for both employees and HR teams. 

“Traditional performance management is viewed as an event tied to the annual merit cycle,” says Reid. “It puts employees in the position of lobbying for a rating as opposed to a process that supports development throughout the year.”

Here are a few of the ways traditional performance management can hinder teams:

1. Performance management becomes disconnected from the flow of work
2. Goals can become outdated when performance is infrequently evaluated
3. Feedback delivered once or twice a year doesn’t capture the whole picture
4. There is no clear line drawn from performance reviews to development
5. The tools often get in the way of capturing feedback that benefits the employee

Each of these challenges contributes to friction in creating high-performing employees across your organization. They create gaps between the work your employees do each day and the actions people need to take to develop in their roles. They become obstacles to improvement instead of streamlining the process for everyone involved. 

How to identify challenges in managing performance

When performance management isn’t working effectively in your company, you’ll likely spot frustrations in your teams around the processes. 

“If any stage of the process is cumbersome to employees or HR, you likely have an issue,” says Reid. “It’s not a good sign if you need to coax people to finish self-evaluations or if your HR team is struggling with a huge administrative burden.”

Without targeted and relevant development opportunities for your people and clear steps to achieve them, you’ll likely struggle to nurture high-performing employees. Plus, you could miss company growth and success opportunities if you aren’t aligning employee and business goals. 

Another measurement of how you manage performance could be the quality of the evaluations and feedback generated by your process. Developing employees so they can give their best at work takes thought and reflection, which should give you better data to work with as you create learning programs and development plans. 

Any performance management process should equip employees with valuable feedback and insights and a plan to build on the feedback received. It should also empower managers to offer this support to their people.

The impact of outdated performance management tools

When HR teams are working with outdated systems or inefficient workflows to monitor, evaluate, and report on employee performance, their ability to influence outcomes is vastly reduced. 

How common are outmoded approaches to managing performance? More than most organizations would like to admit. 

“Managing performance might be done through a disconnected set of HR tools, or it could be a collection of Microsoft Word documents and Google forms,” says Reid. “It can vary widely, but most approaches don’t do anything to foster effective conversations or lead to development plans.”

The challenge with outdated tools is a lack of support for high-impact areas of performance management, such as continuous feedback and talent development. These are highly effective means of driving improvements all through the year, yet they are difficult to implement and execute at scale without the right tools. 

“There are a lot of companies struggling with systems that don’t allow easy reference or data comparisons,” says Reid. “For example, managers should be able to look back at past reviews, especially if an employee has had several managers within the company.”

Without a robust framework to support talent development that meets employee needs and fills skills gaps throughout the company as a whole, the burden of creating development programs may fall to individual managers. This can lead to inconsistencies across your organization.

Combining people development and continuous performance management

The best approach will be a system that supports ongoing feedback and clear development plans to encourage learning and build skills where needed. This balance helps change performance management from an annual experience most employees dread into a system that helps organizations better support their people. 

A more effective process should make sharing your company’s expectations, goals, and desired competencies with people as easy as possible. From there, it’s easier to evaluate employees on those things. You can also encourage employees to share their own feedback and evaluations.

“Higher performing employees will be more resilient in the face of accelerating change,” says Reid. “This lends itself to improved company performance by way of higher engagement and retention of your employees.” 

Ready to learn if your current performance management approach supports employee and company growth? Download our ebook: Performance Review Remix: Time to Shake Things Up.