Take a look at your performance management processes.
Now, take a look at how they actually work in reality.
Ask people in your business what they think about them.
Check the impact they have on your teams. Have a look at the effect they are having on your bottom line. Can you spot the differences?
We’ve done this in a number of organisations, and we typically find that there are significant differences – particularly when talking about ‘appraisals’ as part of an ongoing performance management process. The appraisal is often well documented – it has a process or policy, there is a well-crafted form, often there is an IT system that drives and records the process, and usually managers have been trained on how to conduct appraisals.
So why is there this gap? And when it is deemed to be ‘not working’, why do we go straight back to the drawing board? Why do we spend time and money redesigning something else that won’t work? We know it won’t work – because it never did before. Changing the paper, or the system won’t change the habits, behaviours or practices of your leaders.
Our suggestion is that you go back to basics. Don’t mess with what you already have unless you really have to – you’ll only meet change resistance and the perennial cry of ‘not another new appraisal process’.
Think of it as a worn out old house – you could knock it down and start again – or you can renovate what you have, and make it work for you.
So where do you begin with your renovation project? We’ve identified 4 key areas of focus (our 4 Cs) for success, and a series of questions to ask yourself. Do these resonate with you?
Are your leaders acting as role models? Are they setting meaningful objectives for their direct reports? Are they regularly engaged in performance discussions? Are they showing an active interest in how performance is tracking in the organisation? And I mean leaders – senior ones. The board. Their direct reports. This HAS to be demonstrated and supported in action from the very top – or why else would anyone bother? Making proactive performance management ‘part of the way we do things round here’ is a key factor in its success. Don’t let it be an add-on task, or a one-off. Instead, encourage the cascade of energy on the topic throughout the organisation.
Been on appraisal training? Yes. Know how to do it? Yes. Then what is stopping you? Line managers can usually tick the box on having attended appraisal training, whether internally or externally. And yet still, they often tell us – and their direct reports tell us too – they don’t really know how to do it well.
Appraisal training has its place, but we find that the key challenges are in setting meaningful objectives, managing challenging conversations and differentiating performance. This affects the credibility of the process, but also the confidence of both parties in the discussion. Run some focus groups – establish the real capability gaps in your business, and develop or buy development solutions that really target those needs. Establishing internal coaches and champions can be of real benefit – an internal, confidential source of help in the preparation process.
Regardless of capability, we are frequently told that the appraisal process leaves people (managers and employees alike) feeling cold. They feel no value. They sense inequity. They hear it’s done differently in other departments. They say it’s about your relationships with others, not what you delivered. It is important that the process has credibility – but that does take time to build.
Encouraging calibration of performance ratings is a key success factor here – provided that the calibration process is independently facilitated (from within) and that decisions made are justified and robust. But senior leadership is another key factor here – bringing consistency of application, and paving the way for realistic performance ratings and differentiation.
Ultimately, what is the point? Linking performance and recognition is a must. But recognition doesn’t have to mean PAY. In these tough times, we see many organisations whose annual salary increase budget really doesn’t allow for significant differentiation – maybe 1 or 2% more for those who really exceeded expectations. But with performance of individuals being tracked more frequently, the opportunity exists for more frequent recognition. We spoke to a group recently who said they :“just really want a thank you” for a job well done. Some companies operate recognition bonuses (small token gifts – in one business these were decided by a group of employees not managers.) Are you ready to put something in? Think about the ROI – a family ticket to the cinema (c£50) in return for 3 months work over and above the call of duty. Surely there’s something in that?
Of course, there may be more you need to do. You may need to give your process a thorough overhaul. And you may want to be radical and creative. But before you go to the expense and the effort, think about how you can make what you have work more effectively – because changing your process won’t change your culture. You have to do that from the inside.