How is your performance management system working for you?
For many of us, we have known for quite some time that the typical annual performance review isn’t productive, but we aren’t sure what to do about it. In 2014, a Human Capital survey done by Deloitte found that only 8% of companies thought their performance management process drove high levels of value and 58% thought it was not an effective use of their time. So what are organizations starting to do differently to address the issues?
Timeliness and Productivity
Adobe dealt with what many organizations struggle with today: their performance review process was dreaded, largely ineffective, and more time was spent documenting the process than spent in the conversation itself. Collaboration across the organization led to the rollout of the “check-in” process, designed to make sure employees and managers agreed on expectations and identified development opportunities, especially as they changed throughout the year. The focus shifted to giving and receiving feedback, timely recognition of good performance, and addressing any issues head-on. Several years after the change, Adobe is more effective at dealing with those who aren’t meeting expectations while seeing a sharp decline in voluntary resignations. In addition, one of the biggest benefits Adobe has realized is a significant reduction to the almost 80,000 hours its managers used to spend annually on performance reviews, leading to higher productivity and more time for other initiatives.
Ranking Vs. Developing
Deloitte was surprised to discover that their annual performance management process ate up about 2 million hours per year; time spent on completing forms, holding meetings about employees and determining employee ratings. They decided to see if they could simplify and change the conversation “about” the employees to “with” the employees. Like Adobe, their program became focused on regular check-ins between managers and employees to ensure quality and consistent coaching occurred – conversations which require no paperwork or documentation. They also implemented performance snapshot surveys done at the end of each project or phase of work that consists of 4 simple questions. Business leaders are able to use the information from both sources to determine business measures per person. After a few years of implementation, Deloitte’s new performance management system is having a positive impact on the organization and is continuing to optimize the process.
Frequency and Buy-in
Here at The Persimmon Group, we tried the typical annual performance review process. Documenting goals, discussing strengths, concerns, issues or areas of opportunity. But it never seemed to click for us. We consider ourselves a flat organization that runs on collaboration and teamwork, so following a traditional performance review process always felt slightly forced and unnatural. Like many of the examples above, our team members craved real-time feedback, ongoing discussions, and cultivated opportunities to learn and grow. So we did away with our more formalized process and came up with the concept of AAR (After Action Review) surveys and “families” – small groups within the organization that are focused on development, feedback, mentoring, and relationship. We did away with our more formalized process for performance management and started making it happen more organically and timely.
Our AAR survey, based on the performance management survey Deloitte utilizes for its employees, is a fast, simple way to accumulate information about how our employees are performing on projects. Simple, straightforward questions like “Would I always want this person on my team?” and “Is this person at risk for poor performance?” help us identify trends and figure out how team members need to grow, whether that be growth in responsibility or promotion, or recognizing how team members could benefit from mentorship or a more specified performance plan. While this does not take the place of the lessons learned sessions that happen in person post-project, it does allow us to roll the feedback up to the leadership team for review when it comes time for promotions, raises, and bonuses.
Our entire team would tell you that the concept of “Families” is one of the better organizational decisions that we have made.
Families at TPG are small groups of employees who meet together over a 9 month period to discuss skills assessments, do internal projects, provide mentoring or development feedback, and last but not least, just have fun. We have found it’s a way to get everyone plugged into Persimmon and feel a part of the team, which impacts overall buy-in and morale, while also providing a more consistent avenue for feedback and development. Families are strategically formed, adjoining team members from all areas of the company with various levels of experience and expertise. This allows our team to bounce ideas off of each other, learn from one another, and grow together for the good of Persimmon.
Is your current performance management system working and linked to your overall strategy? Are you getting the value you want for the effort expended? If not, start asking questions about what is working and what needs to be changed. There isn’t a “one size fits all” solution here. It needs to be the solution that is right for your company and needs to drive the kind of culture you are wanting to create.