How can we redefine performance management?

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New research from Cirrus shows a shift away from traditional performance management processes towards more a more agile, dialogue-based approach.

 Performance management is a pertinent issue for pretty much every organisation today. At Cirrus, we work with a wide range of clients, and the majority of them have either changed their approach to performance management over the past year or two, or are currently exploring how to improve it. For many, the change is part of an overall business transformation.

As part of Cirrus and Ipsos MORI’s Leadership Connections 2016 research, C-suite leaders from major UK organisations were asked where HR teams contributed most to the business. In their opinion, the top HR contribution areas were talent attraction for 55% and performance management for 46%. When we discussed this finding with a wide range of HR, talent and L&D professionals, many felt this represented a great opportunity for them to influence the culture of their organisations. There was an overwhelming desire to move away from traditional performance management systems towards a more holistic approach to improving individual and organisational performance.

The vast majority of organisations Cirrus spoke to as part of our recent Redefining Performance Management research agreed that performance management should go beyond appraisals. They feel it should encompass wider elements of personal and career development in order to improve both individual and organisational performance, in line with organisational values and goals.

There is a widespread belief that performance management is – or certainly should be –  an important and valuable tool for driving business strategies forward. It would be fair to say however that no one feels they have perfected performance management yet. Most existing systems are some way off being able to deliver real value. Our research highlights strong dissatisfaction with performance management in its current form, which is driving major organisations to change, adapt, and seek alternative solutions. Many are questioning the fundamentals of their systems in search of new, agile and sustainable solutions. The research indicates that organisations have a strong desire for change and are aware of the external developments in this area, which is driving a shift in approach. Many have reviewed their current approaches at a deep level to understand what is and isn’t working, and to understand how performance management influences culture.

Many of the organisations seeking to make the shift away from rigid processes towards a more dialogue-focused approach face significant challenges. Some of these are the same challenges I’ve seen organisations grapple with during my experience of over two decades in talent consultancy.  So, for example, the desire to move away from form-filling and box-ticking can be hampered by line manager capability. Today, more and more organisations are investing in capability building, creating clear and straightforward guides and information packs to bring everyone to the same level, and offering support on approach, objective setting and ongoing conversations. Investing time with managers to establish a shared and consistent understanding of expectations is a good starting point.

Overall, there is a definite shift away from traditional performance management approaches towards a more agile, ‘light-touch’ approach. Instead of formal appraisals or twice-yearly reviews, many organisations are seeing real performance shifts as a result of regular, supportive conversations. There is a move towards really understanding business needs and creating bespoke, multifaceted approaches aligned with purpose, rather than ‘one size fits all’ solutions.

Making this shift can be tough. It often requires real cultural and behavioural change. The results however, can have a deep and lasting impact – not only on individual employees, but also across the entire organisation.

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