Grab your slate chalkboard and jot this down: "The old performance management model is dead."
But of course you don't own a slate chalkboard, because its time has come and gone.
And just as it no longer makes sense to use an antiquated method to take notes, it no longer makes sense to follow the old pattern of performance management, wasting hundreds of hours and thousands of dollars on a painful process that grants little usable information—and certainly no improvement in performance—as its reward.
Traditional performance management dates back to the Industrial Revolution, when employers saw workers as replaceable parts in a machine, not as valuable assets integral to the growth of their organizations. But while the employer/employee relationship has evolved, performance management remained stuck in the past until very recently.
The health of an organization is dependent on accurate, timely information. Just like people have upgraded from annual checkups to constant monitoring with apps and wearables, organizations should be seeking to do the same. An annual review simply can't provide enough information to make smart business decisions.
Frequent reviews are more than functional for employers; they also meet the demands of modern employees, who expect a constant flow of feedback and won’t settle for anything less. As proof, 85 percent of millennial employees say they would feel more engaged in their current position if they could have more frequent performance conversations with their manager.
The old model lives in the past, does little to reflect the present, and stunts an organization's ability to plan for the future. We need to think of performance management as a living plant that needs constant care from a caring gardener, not a box that needs checking once a year. Even GE, the original champion of performance reviews and forced rankings, has jumped ship on these old ways of handling performance management.
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TAKE THE LEAP
Why do so many continue implementing infrequent—and demonstrably ineffective—performance reviews when it’s clear that today’s workforce is screaming for a change? We might as well ask why Grandpa Jim still uses his PalmPilot on a daily basis. Even though the consensus from the business world is that most everybody hates the old model, it remains in many organizations because they fear the unknown.
It takes courage to take any sort of leap, and this is certainly true of performance management processes. But the workforce is changing, and those slow to act will be left behind.
Research shows today’s workers don’t look to their managers for expertise nearly the way they used to. Young employees are acutely aware that in the Information Age, answers can be readily found elsewhere. Instead, employees want managers to be mentors and coaches who push them and inspire professional growth. If managers want to develop their employees and help them improve their performance, they’re going to have to approach performance management differently.
HR professionals who are making the leap are seeing valuable differences. Research from Deloitte shows that new performance models—those that “focus less on evaluation and more on agile goal setting, regular feedback, coaching, and development”—are making a difference. Participating organizations are significantly more likely to believe their performance management process drives business value (up from only 8 percent in 2014 to 75 percent in 2015!). For a real-world example, software powerhouse Adobe turned away from their annual reviews, and within two years they saw a 30 decrease in voluntary departures. Perhaps more importantly, they got back the 80,000 hours they estimate their managers were spending on old processes.
It’s time to take the leap and master your performance management efforts. To do this, you must thrive in these two processes:
Check-ins: This includes both scheduled one-on-one meetings and the spontaneous conversations that occur organically between managers and employees.
Feedback: This includes feedback loops like peer reviews, manager reviews, and self-assessments.
The following are 9 BEST PRACTICES to help you master the new performance management.