Is it time to rethink your performance management system? Maybe, maybe not. A recent set of studies by Deloitte Consulting LLP’s Bersin points to a business landscape that has changed considerably with regard to strategic performance management. It’s easy for firms to get complacent when it comes to something so typically seen as separate, divorced even, from our everyday Flow of Work.
Josh Bersin’s ‘where we are now’ article raises some interesting questions for leaders to think about when it comes to the practice itself. Starting with a good, hard ponder about that somewhat philosophical question: “What’s the point?”, I’d like to take this a little further. In this article, I’ve identified some stretch goals worth considering if you’re wondering whether your performance management system’s working for you.
From PM to Strategic Performance Management
1. What’s the point?
According to Bersin industry statistics, we’re no longer looking solely at accountability when we carry out our performance management processes. Nor are we focused on separating out ‘promising’ potential from higher performers for differential training, compensation, or driving competition. Instead, we’re seeing a lot more in the way of development implications from our performance management assessments. For growth, we’re looking at how our systems drive heightened motivation, morale, and upskilling.
But what does it really mean for us, as leaders?
Well first, it begs the question of how we, as leaders, can develop more dynamic, forward-thinking ways to use ratings for ownership and involvement. And we need to ask ourselves if we’re ready to shake off what’s outdated, what used to work, and what’s there simply because it’s ‘always been that way’.
There are many ways to link ‘ratings’ to something future-focused as a very first stretch goal. Take personal development projects, for one—the goals that your people set for themselves. These are intrinsically motivating by their very self-set nature; they mean something to the people who create them. As an initial step to work development into our performance management systems, we can build in ways for people to get feedback on their progress.
2. Does it all end with feedback?
Performance management isn’t an end goal in itself. Expanding on our growing acceptance of performance management as a means of talent growth, better collaboration, and enhanced innovation, we’ve started to place much heavier emphasis on feedback. Businesses are experimenting more and more with different ways of enabling it. More importantly, we’re encouraging our teams to embrace it. We’re training people to deliver it effectively, and trying to strip away unpleasant underpinnings associated with it. But when it comes to working with feedback, it all comes back to culture, Bersin argues—it takes time and patience to foster the right perspectives in our people.
At Time to Grow Global, all our experience has emphasized exactly the same thing. It’s a solid yet simple concept, which I’ll put quite concisely as a ‘stretch goal exercise’. Let’s think of a garden or even a greenhouse. As leaders, our stretch goal is building and nurturing a climate that actually uses feedback as fertilizer for growth.
3. Is team performance a big enough deal?
Succinctly, the Bersin research highlights significantly better business performance for firms that use shared goals in their assessments. Based on what we already know about collective commitment, shared goals, and intrinsic motivation, it should come as no surprise that our performance management processes ought to be aligned with these. And if they aren’t, it may be time to reconsider revamping our approaches.
If you’re working with a legacy system of sorts, just starting to work team goals into performance management is a stretch goal in itself. Once again, all my professional experiences match neatly with the Bersin research findings above—incorporating shared goals means a much more holistic approach to performance management. Shared goals are immensely powerful for communication, collaboration, and for cultivating a collective team culture. It’s time more performance management systems evolved to reflect this.
4. Do pay and transparency go together?
Put another way, Bersin argues, it’s about being transparent. Which means clarity about why people are paid what they’re paid. Performance management, rewards, and compensation are inextricably linked, and there’s nothing wrong with that. But if these linkages are ambiguous, obscure, or inconsistent, then potential problems can arise. This doesn’t imply a one-size-fits-all approach, by any means (which is good news!), but it may involve thinking about how we communicate our pay policies across the company. So integrity and alignment between strategy and PM processes are one thing at the heart of systems that drive growth.
How can we aim higher with this one? We could take some tips from the gig economy, for a start. Freelance pay is often linked with performance through reviews and immediate feedback. More experience, more reviews, visibly great results and portfolios often comprise a clear enough justification for higher wages. If you feel confident that you’ve got a healthy team culture, immediate, multi-rater feedback can also prevent the ‘recency effect’ bias that’s all too common in performance management. However, it’s important to think carefully first: immediate and multi-rater feedback is also definitely not a one-size-fits-all approach for obvious reasons.
5. Who’s writing the questions? (Top-down isn’t the answer!)
By definition, a performance management process should incorporate intrinsically motivating goals to be more meaningful to everyone. This means collaborative goal-setting by the people who work towards them and those involved in their achievement—employees themselves, managers, and team members. This not only allows for flexibility and transparency but has huge implications for efficiency. And ultimately, it comes back around to engagement. Is this something your business can say for its system?
I’m personally a big believer in the power of diversity—in thinking, decision-making, innovation, and ultimately, future-focused performance. If we’ve built a powerfully diverse team around us, inclusive performance management goals are an ideal way to harness that diversity of thinking. So as a stretch goal, let’s open up goal-setting to those really involved in goal pursuit. How do they feel they add value to the team or business? What matters to them?
6. Are you thinking about the flow of work?
Thinking about how we can make Performance Management a strategic part of our daily lives also means thinking about technology. Functionality is great when it comes to picking a tool for the process, but essentially, your Performance Management processes must work with your people. If you’re linking goal-setting, performance management, and strategy (and it’s highly recommended!), it only makes sense that your tools work as seamlessly as possible with your team’s everyday tasks. Essentially, having to log in to a ‘separate’ performance management tool means to having to log in to a ‘separate’ HR mindset.
It’s about design thinking again with this one, Bersin argues. I’d also add that it’s heavily underpinned by how we choose to communicate on a day-to-day basis. Our thought patterns too—it’s easy to get bogged down with short-term objectives and deadlines. All too soon, performance management becomes an annual ‘spring clean’ rather than a daily task.
So…this one’s not a stretch goal, per se, it’s an easy-peasy activity. Let’s just ask people how they’re feeling about their own performance progress. And let’s make it clear that we’re not ‘checking up’ on anyone. We’re just taking some time to check in, touch base, and support our people, blending performance management a little more into the natural flow of work.
7. Is coaching part of our process?
Taking a holistic perspective is integral if we’re going to have a performance system that works for everyone. Training and coaching managers to better develop others means supporting them and giving them what they need to help your team grow. This has implications for your goal-setting processes, feedback systems, and for your talent management strategy more broadly. We need to ask ourselves whether we’re rewarding all the right people for this more sustainable aspect of our teams—whether we’re giving everyone the support they need for growth.
Clearly, training those who train is integral to growth—‘give a man a fish’ springs instantly to mind. A performance management system which doesn’t equip managers to grow others will often need some tweaking. Put simply, it’s not strategic performance management. Just like a siloed ‘training function’ is just an extra limb if it’s got zero to do with PM. Logically, the long-term stretch goal is to link coaching and performance management meaningfully. Let’s start by opening up our performance system to feedback from within. Do managers feel equipped to coach others? Mentally? Skills-wise? And what, over the long term, can we do about it?
So our competitive landscapes are changing, which isn’t news. But if we’re thinking about how to adapt, and our ratings systems need to reflect this. And getting on the right track means thinking about teams, leadership development, feedback, getting people involved, and a whole lot more. Basically, it’s time to look at whether our systems are working for us. What do you think?
 We Wasted Ten Years Talking About Performance Ratings. The Seven Things We’ve Learned, Josh Bersin, 2018.
 High-Impact Performance Management: Part 1: Designing a Strategy for Effectiveness, Bersin & Associates / Stacia Sherman Garr, 2011.
 The Performance Management Maturity Model, Bersin, Deloitte Consulting LLP / Kathi Enderes, PhD, and Matthew Deruntz, 2018.
Carel is an HR consultant, change manager, business coach and talent scout with hands-on experience in over 75 countries. He facilitates, designs, and co-creates organizational strategies, work processes and human capital solutions for businesses facing critical challenges across industries and geographical regions. Join Carel and the rest of the team on our Time To Grow Global LinkedIn.