Over the past five years, a revolution in Performance Management has taken place. Companies such as Accenture, Microsoft and PWC have dumped their traditional “backward looking” ratings approach and have adopted or are experimenting with “goal oriented” conversation one that emphasises quality over quantity.
In effect, we are witnessing the disruption of long standing HR practices and systems “on spec” to address factors such as low employee engagement, high cost of administering performance management systems and the perceived inequity of the ratings approach. But is the pain of the change worth it?
Hard evidence is missing
For one, PwC partner Emma Grogan isn’t convinced as there is no hard evidence that a rating-less system is more effective than the traditional one. According to Grogan, the real issue isn’t whether an organization’s performance management system uses ratings. In her view, the key is to ensure managers are having more frequent, higher quality conversations with their employees and shifting from evaluation to development. Therefore, simply changing the system is unlikely to have the desired outcome. To have real impact, managers need to learn both the art and science of how to have good conversations as well as change their approach to performance management.
Change is a 3 stage Process – not 2
The challenge of course is that putting new performance management systems in place is not as easy as “out with the old and in with the new”. And from what I’ve read, most organisations are adopting a simplistic 2 step process to implement new performance management systems.
Why doesn’t a 2 step process work? First of all, the target audience – Managers – need to believe the existing system needs to change. Without that insight as a catalyst, they will be resistant to making the change. After all, it will require significant effort for many managers to embrace the change. Secondly, for a large number of managers, it will require learning new behaviours that they lack the confidence in to perform effectively. And if they lack the confidence to have quality conversations, they’re unlikely to engage in them and when they do, they’re unlikely to do them well which defeats the purpose!
Boosting self-efficacy beliefs critical
To address this challenge, organisations need to invest in educating their managers in how to have more frequent, development oriented, quality conversations. And because managers are being asked to undertake what many would categorise as a challenging task, the key is to boost their self-efficacy beliefs – their confidence in their competence to undertake challenging tasks, their sense of personal agency and control to undertake the task and their belief that with effort they can achieve realistic outcomes.
Boosting self-efficacy beliefs relies on (1) Personal mastery (practice makes perfect); (2) Role modelling (both good and bad models; (3) Feedback and coaching (a good facilitator and/or mentor); and (4) Being in a safe psychological and physical environment (out of the office). My personal preference is to use organizational theatre techniques such as Forum Theatre, Rehearse for Reality and Entertainment Education to boost self-efficacy beliefs.
Embedding new systems needs investment
I applaud organisations who are innovating in the area of continuous performance management. But to reap the rewards, they need to invest some of the savings to get it right. Otherwise they risk having another failed changed management project and will end up reverting to the old system with all its inherent failings!