Dan Hammond of LIW discusses how to get the most out of that most dreaded of work scenarios, the performance review.
You can run but you can't hide. Your next performance review is just around the corner and let's be honest it rarely ranks highly on the 'most enjoyable things to do at work' scale. James Adonis summed up the prevailing feelings about this process in 'The Age': "Managers dread them. Employees resent them. They only come around once a year, or if you're really unlucky, twice a year. I'm talking about performance appraisals, the human resources -inspired process of formally assessing employees that costs organisations millions of dollars each year – and does not work."
What should it look like?
When done well – performance management can unlock a lot more than employee performance: it can create all the conditions for their success and for the organisation as a whole.
Top performing organisations realise that employee engagement is central to driving results and therefore develop an aligned system which supports it. It's not a 'soft factor' but built on hard facts: organisations with optimal engagement have 2.6 times the earnings per share (EPS) growth rate compared to organisations with lower engagement in the same industry (Gallup 2010).
"Managers are often overwhelmed by a process that essentially programs them to 'manage employees' (as opposed to providing leadership) in a de-humanised manner."A performance management system is the cornerstone of an Organisational Leadership ArchitectureTM in that it is core to sustainable business success. Put simply, this is the process by which an organisation engages with its workforce to achieve its goals.
So it had better be right and it had better truly engage employees rather than be an annual conversation that, often, is spoiled by paperwork.
What does it look like now?
Managers are often overwhelmed by a process that essentially programs them to 'manage employees' (as opposed to providing leadership) in a de-humanised manner. As a consequence many employees are distrustful, disappointed and sometimes downright disillusioned of the 'two hour annual summary' of their contribution to their work.
There are however, a few myths about performance management that are unhelpful and important to dispel:
- It's a once or twice a year conversation that only HR wants to happen
- It's a negotiation for better pay and promotion
- It's a one way conversation driven by the manager
Given that the global profiling organisation, Human Synergistics, concludes that Australia and New Zealand's dominant leadership style is 'avoidance', it is also possible that no engagement between manager and employee is happening at all! So rather than attempting to sweep this process under the carpet, what can a leader do to make this process work?
How to get it right
To be blunt, the way that performance management is conducted in many cases is the opposite of the way it should, and could be. So try this: turn everything on its head to see the real value that can be added to both individual and organisation.
It’s not an appraisal, it's about success:
The responsibility needs to be shared between the organisation, its leaders and the team members to create the optimal conditions in which people become self-motivated. A well-designed performance management system will provide a framework for regular discussions about three specific conditions which determine success:
- Clarity of key accountabilities, goals, objectives, standards and how they align to the strategic direction
- Climate required to do the job which includes the environment, resources and culture
- Competence including the behaviours, knowledge, skills and attitude required in this job for individual to fulfil their longer term potential.
The saying "Your people will not care how much you know until they know how much you care, is never more true than in the performance management conversation. If a leader can project that their intent is positive, then a more genuine conversation where self-disclosure, two-way feedback and problem solving are the norm.
It’s not annual, it's daily
How many of us have had the '12 months of silence, two hours of hell' approach to performance management? If this is the case then the process has failed. An annual review is probably required by the organisation but a leader should ensure that the conversation holds no surprises for the employee. Continuous conversations provide regular directions, feedback and build a higher degree of proactive self-management.
It's not about telling, it’s about coaching
Leaders no longer have the time to supervise or provide all the solutions. Furthermore, if they do, they miss the essential role of leadership which is to unlock others' potential. It is imperative that people in the frontline and elsewhere show initiative if stakeholder needs are to be met in a way that is effective and efficient enough to warrant repeat business.
"The vital ingredient lies in the leadership style that supports the performance management system: the leader should be positioned as a super coach rather than a micro manager."
A telling, directive style of leadership is less likely to develop this self-awareness, engagement or build capacity. The vital ingredient therefore lies in the leadership style that supports the performance management system: the leader should be positioned as a super coach rather than a micro manager. In this way they can address difficult issues, build understanding and enable learning the lessons of past performance.
Asking three fundamental questions forms the basis of any coaching conversation:
- What are you trying to achieve and why?
- Where are you now?
- What do you need to do next?
Finally, it’s not about the system, it’s about the conversation:
Most companies invest a lot of resources in the 'systems and process' side of performance management – which is valuable – but this is only one piece of the puzzle. The key is to ensure that there is a quality conversation, which strives to create the conditions for future shared success.
This will mean that managers and organisations need to firmly grasp three other C's in order to break the cycle of mundane, inept or damaging performance management experiences:
- The desire to care
- The ability to be consistent in their approach to their people's performance
- The courage to have a real conversation that matters
Dan Hammond is a managing consultant at global leadership consultancy, LIW
