A Better Approach to Performance Management

What comes to mind when you hear the term performance management?

For many managers and their staff, the term fills them with dread. A major reason for the negative reaction comes from the typical way performance management is implemented.

Traditional performance management systems focus on evaluation. Managers set goals for direct reports at the beginning of the year, meet with them at midyear to see how they are doing and provide feedback, and meet with them again at the end of the year to assign them a grade. That grade is used to calculate pay increases and bonuses, and often to determine who to let go if there are layoffs. This process treats employees like cogs in a machine to be tweaked, oiled, and fixed if needed.

Traditional Performance Management

A different approach to performance management requires a different mindset—for organizations, managers, and employees. Ken Blanchard and WD-40 Company CEO Garry Ridge discuss this mindset in their book Helping People Win at Work. They suggest a new approach to performance management that’s based on a concept they call “Don’t mark my paper, help me get an A.”

This new approach to performance management creates a real partnership between managers and direct reports. With this process, the manager and the direct report work together at the beginning of the year to set meaningful goals. Then, at least every two weeks they meet one on one, which provides an opportunity for the employee to let the manager know how things are going and to ask for what they need in the way of direction and support to achieve their goals.

Throughout the year the manager provides specific, meaningful praise and encouragement, as well as redirection if needed. When this process is followed, the end of year meeting becomes a time to review and celebrate the employee’s accomplishments.

New Performance Management

Many organizations have adopted this new approach. For example, Adobe has dumped its old performance management system with its formal review forms, rankings, and calibration systems. The new approach encourages people to collaboratively set expectations for the year, get feedback on a regular basis, and create a plan for growth and development. The process is referred to as “the check-in.” A year after instituting this new approach, voluntary attrition has dropped and the organization is seeing an upward trend in both employee sentiment and organizational performance.

Another example comes from Australian enterprise software company Atlassian. Leaders found that their old performance management system did exactly the opposite of what they wanted to accomplish. Instead of inspiring discussions about enhancing people’s performance, the old system not only caused disruptions and anxiety but also demotivated both team members and managers.

To solve the problem, the company replaced its old system with a model that emphasizes regular weekly coaching conversations. In these meetings the manager and employee discuss what the employee can do to enhance their own performance and play to their strengths. The company also removed its traditional performance incentives and moved to a motivational model that encourages performance through coaching. Atlassian is now recognized as an employer of choice.

If you are a manager whose organization still participates in the old performance management model, adopt this new coaching model for yourself. Create a partnership with each of your direct reports—and help them get an A.

About the author

John Hester is a senior consulting partner with The Ken Blanchard Companies who specializes in productivity and performance management.

6 thoughts on “A Better Approach to Performance Management

  1. Headaches with employees is the most often posted complaint on director electronic “bulletin boards.” We have help on performance management. Here is advice from one of the best known management consultants.

  2. Taking employees performance to higher levels can be as simple as adopting a collaborative approach to performance management. In addition to the model suggested in this article, I found it particularly effective to set “performance empowerment conversations” where the leaders would set and “Listen” to employee and learn more what he/she can do to help the employee perform at a higher level. It is great regularly coach the employees and help them learn skills / knowledge needed for them to do the job well, in my view it is equally important for the #leader to learn from the employee as well.

  3. There are quite a few new tools being developed to help managers and their staff build a much more productive performance management cycle.

    I believe the critical missing element is going to be an attitudinal shift, where performance of an individual is viewed as an organizational failure. As we move into a “big data” world, we’re going to gather a lot of insights into what causes poor performers and what are the correct actions to take.

    In short – managers are going to be a lot more accountable in the “big data” future for managing performance. In my opinion, that’s a good thing!

    David Pethick
    Co-Founder, http://leading.io

  4. I like the new approached mentioned here, “new approach to performance management creates a real partnership between managers and direct reports. With this process, the manager and the direct report work together at the beginning of the year to set meaningful goals.”

    This type of approach enhances employee morale, and opens the door for sharing innovative ideas. When a manager meets with their direct reports it let’s the employee know that their input is valuable.

  5. For the purpose of sustainability organizations are constantly seeking ways to improve performance across the board by reducing cost, creating innovative products and developing new processes to keep up with the speed of the globalization of markets. Manager need to keep conversations going with their direct reports.

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