Peak Performance:
a Team Game

Using the Cloud for Better Development, Engagement and Productivity

I.
Always-on Performance Management

Annual appraisals and mechanistic performance management processes look increasingly unfit for the age of big data, personalisation and digital transformation.

Performance management has become the number one skill for HR leaders over the past couple of years¹ and traditional methods have become outdated. But against a backdrop of rapid change in business practices, it’s looking increasingly challenging.

2018 is the “year of the employee”, according to the Oracle HR Trends Report.² Employees are in the driving seat thanks to shifting sentiment about work, a tight labour market and new expectations about the nature of employment. Performance management now needs to deliver for them as well as from them.

It means shifting from a compliance mindset – where HR uses performance management to control the risk of employees underperforming, dealing with problem employees and justifying compensation decisions – to one of constructive facilitation. As well as being the year of employee, 2018 must also be the year that "the conversation" becomes the defining tool to manage performance.

Appraise the appraisal.

The compliance mindset is typified by a reliance on the annual appraisal. It finds its most negative expression in the managing out of perceived low performers. The whole performance management system risks being geared to ticking boxes and following scripted processes. In too many cases right now, the question is not how we help the employee, but how an organisation copes with poor employees.

That’s clearly going to result in less-engaged employees, as the Oracle Global Engagement Survey noted (see chart).³ But HR and business leaders have also had enough. After surveying 1,056 organisations in 56 countries, Mercer declared 2015 "the year that killed performance management".⁴ The consulting firm found that only 3 per cent of business people think exceptional value is delivered by performance management processes. In the UK, 73 per cent of senior non-HR leaders polled by the CIPD said the annual appraisal is ineffective – and only half their organisations were still using it.

Overall, our survey indicated that satisfaction with current performance-review processes is low. We discovered:

46%

say their performance is regularly assessed

54%

think their last performance review was fair.

36%

say their last performance review took into account the views of their peers

Research from Oracle’s HCM Global Survey

New questions:

How should we monitor individual, team and organisational performance in harmony?
How should we change performance metrics and management to suit our strategic aims?
Should performance management sit alongside compensation?
How do we structure HR and the support systems for managers to help them adapt to a new, less rigid, less structured performance management approach?

Another question we need to ask is: if we have something we call a performance management system or process, how does it add value to the employee? HR also has a duty to help deliver engaged individuals whose own development secures the talent pipeline for their organisation.

Equally, if we want our organisations to be flexible, innovative and agile, we also need to be prepared to make mistakes. The fail fast culture that defined Silicon Valley’s disruptive model is now prized in most organisations. But if the performance management process is rigid or binary, how can it accommodate this more nuanced approach? How do data-driven systems, in particular, cope with the need to experiment? What about leaders and managers – and the cultures they create – that struggle to embrace failure, especially in more traditional organisations?

The change we need:

There’s no "I" in team (but there is a "me").

Oracle’s latest research, in conjunction with Engage for Success and Ashridge Executive Education, focuses on one crucial aspect of those questions: teams.⁵ HR must design performance and reward structures for individuals, but also support managers in building team performance. That must include ways of setting and measuring goals that don’t discourage experimentation or creativity.

Wellness initiatives are a great way to optimise the environment to help an individual make a more fulsome contribution. We need ways to create workplaces conducive to delivering the best team performance, too. That isn’t about just tweaking processes or automating HR functions; we need to articulate the context for performance, using desired outcomes to define successful performance.

1CIPD, "HR Outlook 2017", cipd.co.uk/Images/hr-outlook_2017_tcm18-17697.pdf.
2Oracle, "HR Trends Report 2018", oracle.com/webfolder/s/delivery_production/docs/FY16h1/doc39/HR-Trends-Report2018-680676.pdf.
3Oracle, "From Theory to Action: Global Engagement Survey", go.oracle.com/LP=39982?elqCampaignId=65988.
4Mercer, "Performance Management: Time to Stop the Process Pushing out the Purpose", 2016, mercer.com/content/dam/mercer/attachments/private/nurture-cycle/gl-2016-performance-management.pdf.
5Andy Campbell, "Why It’s Time for HR Teams to Stop Focussing on HR", Oracle HCM blog, 23 October 2017, blogs.oracle.com/oraclehcm/why-ite28099s-time-for-hr-teams-to-stop-focussing-on-hr.

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Peak Performance: a Team Game