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From Performance Management to Performance Development

Posted by Mathew French

3 December 2019

Most companies do not require managers to provide regular, ongoing performance coaching or feedback for their direct reports as part of their own objectives, goals or performance assessment. Instead, managers’ operational responsibilities (including budgeting, strategic planning and administrative requirements), make it difficult to prioritise human to human contact with the employees they manage. To succeed in today's business environment however, one of the few things you can be sure of is that THIS MUST CHANGE if organisations want to survive (let alone grow). If leaders want to begin re-engineering their performance management frameworks, managers must be given the resources, systems (that is Performance Management Software) and training they need to meet the new requirements for employee development and improved performance. Let's continue our exploration of why performance management still matters.

The Shift From Performance Management to Performance Development

Leadership teams, Managers (and even Boards) operating within traditional performance management systems have struggled to inspire and develop employees because this approach consistently leads to:

  • Unclear and misaligned expectations.

  • Ineffective and infrequent feedback.

  • Unfair evaluation practices and misplaced accountability.

Instead, organisations can transform their managers into coaches by teaching them to effectively and cohesively:

  • Establish expectations.

  • Continually coach.

  • Create accountability.

According to Gallup's 'Re-Engineering Performance Management' research, when performance becomes focused on these core principles, manager-employee interactions and discussions feel encouraging, purposeful and rewarding in ways that annual reviews do not. Creating a culture of performance development and consistent, ongoing improvement around this trinity of core principles also helps employees better own their performance, development and career.

When managers take multiple sources of information into consideration, measurement becomes more reliable and accurate. And it also leads to rich discussions that are developmentally meaningful. Gallup's research yielded the following key findings and insights into critical components of performance development:

  • Employees whose manager involves them in goal setting are four times more likely to be engaged than other employees. Yet this basic expectation only occurs for 30% of employees.

  • Organisations can transform their managers into coaches by teaching them to effectively and cohesively conduct coaching conversations.

  • Performance measurement needs to be blended with individualised development. Without the two in harmony, performance measurement can be perceived as a threat and development as disconnected from the business.

Through a review of 559 roles and 360 behavioural job demands, Gallup found performance review measurement can be collapsed into three key dimensions that describe and predict overall success in a role:

  • Individual achievement = My Work

  • Team collaboration = My Team

  • Customer value = My Customer

To blend performance measurement and accountability with individual development and both personal and team accountability (and to turn activities perceived as threatening into something more positive and constructive), organisations need to consider multiple sources of information:

  • Quantitative metrics that are within employees' control and reflect key outcomes, such as productivity, profitability, accuracy or efficiency.

  • Subjective observations that qualitatively reflect performance in terms of role expectations and allow a manager to provide feedback that helps put performance in context.

  • Individualised goals that take into account each team member's expertise, experience and unique job responsibilities, alongside the general responsibilities of the job.

Gallup Performance Development process

Performance development is strengths-based and engagement-focused. So, what does HR and Leadership need to do to ensure your employees work in a strengths-based, engagement focused environment?

Establish Expectations - Make Them Clear, Collaborative and Aligned

Clear expectations often start with a job description, but that description must reflect the employee’s actual work. Just 41% of employees strongly agree that their job description aligns well with the work they do. Those who strongly agree with this statement are 2.5 times more likely than other employees to be engaged. Employees greatly benefit from having a distinct path to follow, and without one, they can feel aimless.

While just 30% of employees strongly agree that their manager involves them in setting their goals at work, those who do strongly agree with this statement are 3.6 times more likely than other employees to be engaged. 

Employees who strongly agree that they can link their goals and their team's goals to the organisation’s goals are 3.5 times more likely to be engaged. Unfortunately, only 44% of employees strongly agree they can see this connection.

Continually Coach - Make it Frequent, Focused and Future-Oriented

Gallup has found that employees who strongly agree they have had catch-ups with their manager in the past six months about their goals and successes are 2.8 times more likely to be engaged. Multiple meta-analyses reiterate the importance of continual coaching, as they have found that goal setting has a stronger positive effect on performance when it is accompanied by progress monitoring and feedback.

Only 23% of employees strongly agree that their manager provides meaningful feedback to them, and 26% of employees strongly agree the feedback they receive helps them do better work. Those who strongly agree with these feedback elements are more likely to be engaged than other employees (3.5 times and 2.9 times, respectively), demonstrating the need for managers to learn how to coach their employees more effectively.

“Coaching is future-oriented if it gives employees a vision for what success can look like and ideas for getting there.”

Create Accountability - Make it Achievement Oriented, Fair and Accurate and Developmental

Accountability is critical to achieving high performance. Without accountability, establishing expectations and continually coaching are just talk. As such, effective performance development requires managers and employees to take the time to review progress toward expectations, discuss lessons learned and plan for the future.

Employees who strongly agree that their manager holds them accountable for their performance are 2.5 times more likely to be engaged.

19% of employees strongly agree that their manager recently reviewed their greatest successes, and those who do strongly agree are 3.8 times more likely to be engaged.

2 in 10 employees strongly agree that their performance metrics are within their span of control, and even fewer employees — 14% — strongly agree that the performance reviews they receive inspire them to improve.

“Employees have lost confidence — if they ever had it — in traditional performance management largely because insufficient metrics and biased ratings have adversely affected their compensation and promotion opportunities.”

The Intersection of Performance, Strengths and Engagement

While each fundamental aspect of performance development could be conducted in isolation, there is added benefit for Managers to integrate the full performance development model into their coaching conversations. For instance, when Managers talk to their employees about their strengths, the conversation can evolve seamlessly into a discussion about supporting the individual’s performance needs, which impacts both engagement and performance.

Strengths-based, engagement-focused, performance-oriented coaching is both an art and a science. When managers embrace strengths and fulfil their employees’ engagement needs, they see through a new lens for understanding and unlocking exceptional performance. Managers should keep these key coaching principles at the top of their mind each day — because every interaction they have with their team can affect how employees perform and develop.

In the next Blog in this series, we will examine the essential strategies your business can implement to transform the way you manage performance including the key ingredients your managers need to become masters of continuous performance development. 

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Topics: performance management, Performance Management Software, Coaching for Performance, Managing performance, Performance development, Continuous performance management

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