Peak Performance:
a Team Game

Using the Cloud for Better Development, Engagement and Productivity

V.
The Future of
Performance Management

New ways of working, new digital capabilities and new employee demands will continue to reshape performance management.

The “year of the employee”, then, is not about handing over unaccountable power to individuals; it’s about finding ways to manage their performance that support their self-image, their life and their development goals. It also demands clear corporate culture, well-defined behavioural norms and objectively set, data-driven goals aligned to a wider mission.

Figure 3: Gallup’s model for the transformation of performance focus

How to shape conversations.

David Rock’s NeuroLeadership Institute distilled three key lessons from talking to 33 large businesses and looking at wider CEB research into the current state of performance management. His respondents are ideal touchstones for HR leaders and line managers keen to evolve their own performance management.¹⁴

1. Ensure conversations happen. Without an annual appraisal or the need to assign performance scores across different skills, managers can assume they don’t need dedicated performance conversations. They do.

2. Focus conversations on employee development. The past is full of signposts – but what interests both employees and their employers ought to be where both go next.

3. Constantly review how the changes to management styles and the performance management processes are affecting employee engagement and business outcomes. There’s unlikely to be a perfect endpoint for every employee, line manager, team or business.

And almost all the research suggests that a relentless focus on the positive – focusing on good outcomes and employees’ personal strengths – correlates to better engagement and performance.

Performance in just three dimensions.

For both HR and line managers, losing a formal annual review structure can be daunting. But these more fluid, responsive conversations can be informed by a very simple structure.

Gallup’s extensive research¹⁵ into performance management practice yielded an interesting analysis of how behaviour might be articulated as part of the conversational, ongoing review process. It found that most commonly-applied job demands for evaluating employees (running into the hundreds across all organisational roles) “could be summarised into three meta-demands or dimensions of job performance:”

Setting goals and meeting them
Partnering for effectiveness
Translating work into its consequences

As long as line managers – with support from HR and authentic C-suite leadership – are able to have frank discussions with employees in these three dimensions, performance improvement should follow.

Be ready to change.

As we start to build out smarter AI systems and robotic process automation takes on more of the process-driven work that’s easy to evaluate in performance terms, organisations are going to have to answer those questions.

The benefits of getting the performance piece right are varied. A big one is enhancing employee engagement. That’s not just because conversations are more motivational. Personalised performance management allows the organisation to put firm foundations under one of the key strands of engagement: opportunity.

That’s all about shaping development, career-building and succession planning – and with smarter systems backing up the analysis surrounding opportunity, you can start to shape both employee potential and organisational capabilities.

But we do need systems architectures that support this more holistic view – and HR and business models that are capable of both delivering and responding to those ongoing conversations.

14David Rock, “Don’t Remove Performance Ratings (Unless You Are Willing To Do Three Things Well)”, LinkedIn article, 18 May 2016, linkedin.com/pulse/dont-remove-performance-ratings-unless-you-willing-do-david-rock/.
15Ben Wigert and Jim Harter, “Re-Engineering Performance Management”, Gallup report, 2017, news.gallup.com/reports/208811/re-engineering-performance-management.aspx (registration required).

Building Your Action Plan

Use this checklist to build your action plan. As you select each item,
they will build into a comprehensive set of next steps for you.

Which of the following do you need to do?

Your action points:

1. Align HR systems and processes around strategic objectives.
- Ensure there is board-level clarity on organisational objectives and that behaviours, from leadership down, create a culture aligned to this strategy.
- Design functional and team objectives in a way that dovetails with strategy and culture.
- Help line managers shape personal objectives in line with these team goals and support them in guiding employee performance around them.
2. Evaluate existing appraisal processes.
- How well does the output from formal appraisals shape the individual and team goals? Shift away from focus on managing poor performance and more on goals.
- Consider augmenting annual or biannual processes with more frequent, less formal performance conversations centred on development.
- Consider alternatives to simplistic score-based compensation decisions if they are still part of the appraisal process.
3. Support line managers in creating ongoing feedback loops.
- Offer managers clarity on how organisational goals ought to be translated for teams and individuals.
- Establish management goals based on metrics related to employee engagement, not raw results (much as the attention has moved from sales to customer experience).
- Develop coaching and mentoring programmes for line managers around softer, more frequent performance-related team interactions.
4. Focus more on development and objectives, less on past results.
- Build systems that provide better evidence of performance against role and function and skills, not just outputs.
- Ensure development-focused conversations can be carried through into tangible training and coaching opportunities.
5. Treat employee engagement as a core pillar of performance management.
- Ensure conversations happen: make sure every manager understands that having performance conversations is central to their job.
- Focus conversations on three areas: setting goals and meeting them; partnering for effectiveness; translating work into its consequences.
- A relentless focus on the positives: an employee’s strengths and the business goals they can drive with them.

Oracle

Oracle HCM Cloud

Peak Performance: a Team Game