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Moving away from a broken performance management system towards performance enablement

today2022.06.14. 4514 6 5

Background

This article is brought to you by betterworks

WHY SHOULD YOU CARE?

More and more organizations decide to change their performance management system as the good old formal scheduled evaluation is not the right solution anymore in the new digitalized and more flexible world of work. Performance enablement, and providing ongoing, forward-looking feedback is proven to be a way more efficient approach to improve employee engagement.

Performance management systems are broken and are not well suited for the new world of hybrid working, flexibility, BANI, and digitalization. Companies have to transition from performance management to performance enablement. According to Gartner, 87% of HR leaders were considering changes to performance reviews in 2020. 

On 24 May 2022, the global HR community met together on an online webinar organized by the HR Congress. Event speakers were as follows: Andrea Lagan – Chief Operating Officer, Betterworks, Isabelle De Wulf – Director of Talent & Organizational Development, Barco, Alan Colquitt – Author: of Next Generation Performance Management: The Triumph of Science Over Myth and Superstition, and Amy Culverhouse – Enterprise Sales EMEA, Betterworks. Companies are now moving away from managing performance to enabling performance. Many organizations, such as Google and Adobe, have already changed their performance management systems to build employee capacity to perform. It is no longer about coercive control and enabling control. 

What is performance management?

Performance is an ongoing process where employee outcomes are monitored and controlled. Traditional performance management represents a narrow focus on employee performance because appraisals only happen once or twice a year. Traditional performance management is usually biased and often becomes less objective. Performance usually becomes an act of negotiating rather than an actual performance review. 

What is performance enablement? 

The environment that businesses operate in is no longer static. It is now more complex and sophisticated, yet performance management systems were modeled for a less complex and simple world. This is why performance management is falling in companies. To ensure that employees deliver strategy, the drive is now towards revamping performance management so that it becomes more agile, collaborative, employee-centric, and continuously improvement-oriented. This brings us to the emerging concept of performance enablement. 

Andrea Lagan defined performance enablement as “creating the infrastructure to support each team member’s performance potential and help them progress toward their career goals.” After putting the right infrastructure in place, managers and their subordinates can co-develop a performance plan that will move the individual, team, and business forward. 

What should HR leaders do to transition toward performance enablement? 

  1. Assess where you stand 

Before any meaningful change can occur, you should be able to assess where you stand. Try understanding where you are and what it takes to get to the next level.  Clear self-assessment and introspection are critical for you to take positive steps toward closing the gaps. 

  1. Explain why change is necessary

Most of the time change interventions fail because there is no buy-in from key stakeholders, especially employees. Isabelle De Wulf said in the webinar, “It’s about change management and taking the time to explain the why.” Other lady Employees will ask, “What is in it for me? What will improve my personal life when we transition to the new approach?” Employees readily accept change when they know what benefit they will get from the change. It is critical to ensure that you explain the benefits of changing from rigid performance management systems to more flexible ways of enabling performance through performance enablement. Such benefits may include more flexibility in relation to how work is done, a human-centered leadership, greater work-life balance, and the possibility of a performance bonus.  

As per a McKinsey recent report, employees are leaving workplaces in huge numbers. Employers seem to not know why employees are leaving, but some of the reasons include the fact that employees are tired and suffering from burnout. According to this McKinsey report, 47% of the employees who had voluntarily left employment returned to the workforce in either traditional or non-traditional work arrangements. The report goes on to indicate that almost a quarter of the employees took non-traditional work cited that they were looking for workplace flexibility, reasonable expectations about performance and adequate compensation as their top factors influencing their choices. This is a clear indication that employees want to work but require the right environment to work. As we learned in the webinar, performance enablement is about creating the right infrastructure for employees to thrive. Focusing on performance enablement will definitely go a long way in helping companies to win back talent. 

  1. Secure Executive leadership support

As said by Isabelle De Wulf, executive leadership plays a critical role in ensuring that change occurs. These leaders have the power to make key strategic decisions on all business operations as to whether to go through a change or not. They make key capital budgeting decisions about whether to finance an initiative or not, as well as provide leadership. Executive leadership support will go a long way in ensuring that the transition toward performance enablement becomes more effective. In the webinar, Alan Colquitt supported that executive leadership support is critical for the successful transition towards change management by saying, “It takes top management and key stakeholders time to understand new HR practices such as performance enablement.”

  1. Develop Growth mindset

The focus that companies currently have as they move out of the Great Resignation towards the Great Escape is growth and improvement. To achieve the right level of growth and improvement that they require, companies require talent with the right growth mindset. In the panel discussion, Isabelle De Wulf said, “You can have the best tools and know-how to increase the conversations, but you need the right mindset and culture.” At the end of the day, it is not about tools but people. It is people who make use of tools to translate strategy into action. Your people should be in the right frame of mind with a strong desire to grow and become better. As said by Henry Ford, “You can take my factories, burn my buildings, but give me my people and I’ll build the business right back again.” A strong belief in people with a growth mindset will result in a sheer determination to improve and see the change you desire. 

5. Be Patient

Change often comes in as a developmental and gradual process. As companies transition towards performance enablement, they need to take the necessary positive steps in the right direction. Alan Colquitt said, “It takes top management and key stakeholders time to understand new HR practices such as performance enablement.” Management and employees might not promptly buy into the idea but HR leaders have to be patient. They have to engage their audience, teach them and walk with them throughout the journey.

Other key issues that were discussed in the panel discussion include the role of management in performance enablement. Andrea Lagan stressed that management plays a pivotal role in performance enablement. They set the right tone and coach employees to do things right.

Conclusion                                                                    

Performance management is moving towards performance enablement. The drive is to move towards creating the right infrastructure that is critical to support each employee’s performance potential and help them progressively attain their career goals. Companies have to be patient and revamp their performance management systems so that they drive business value.

1The real impact on employees of removing performance ratings, by Jackie Wiles, Gartner 

https://www.gartner.com/smarterwithgartner/corporate-hr-removing-performance-ratings-is-unlikely-to-improve-performance

2The story of Adobe’s revolutionary performance journey, by Tiffany Lam, Betterworks

https://www.betterworks.com/magazine/story-adobes-revolutionary-performance-journey/

Why more and more companies are ditching performance ratings, by David Rock and Beth Jones

https://hbr.org/2015/09/why-more-and-more-companies-are-ditching-performance-ratings

3The 8 fatal flaws of performance management, by M. Tamra Chandler, HR Congress 

https://www.youtube.com/watch?v=WroClhSgQLU&t=3s

4The great disconnect between managers and HR, by Laura Schroeder, HR Congress

https://hr-congress.com/2022/04/14/managers-in-the-middle-the-great-disconnect-between-managers-and-hr/

5PWC’s 25th Annual Global CEO Survey: Reimagining the outcomes that matter, by PWC, PWC

https://www.pwc.com/gx/en/ceo-agenda/ceosurvey/2022.html

6Performance management is broken: Replace “rank and yank”, by Stacia Garr, Deloitte Insights

https://www2.deloitte.com/us/en/insights/focus/human-capital-trends/2014/hc-trends-2014-performance-management.html

7Why more and more companies are ditching performance ratings, by David Rock and Beth Jones, Harvard Business Review

https://hbr.org/2015/09/why-more-and-more-companies-are-ditching-performance-ratings

8Objectives and Key Result Areas: It’s execution that’s everything, by John Doerr, Betterworks

https://www.betterworks.com/okrs/#:~:text=OKRs%20stands%20for%20%E2%80%9CObjectives%20and,better%20alignment%20around%20top%20priorities.

9 Reimagining performance management in an evolved world of work, by Farai Mugabe, HR Congress 

https://hr-congress.com/2022/04/14/reimagining-performance-management-in-an-evolved-world-of-work/

10Strategies business leaders use to improve employee performance, by Mofoluwaso llevbare, HR Congress 

https://hr-congress.com/2022/03/23/strategies-business-leaders-use-to-improve-employee-performance/

11The Manager Dilemma, by M. Tamra Chandler

https://youtu.be/p7V_fasGoGQ

12 Performance Management: Change is on the way but will it be enough? by Emma Grogan 

https://www.pwc.com.au/people-business/assets/publications/performance-management-mar15.pdf

Written by: Mihaly Nagy

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