Performance Management is so much more than just managing performance!

Timm Urschinger, Helping great Leaders implement beyond BS Transformation through Agility & Teal || Transformation Architect, Inspiration Speaker, Storycollector and Co-Creator Teal Around The World

WHY SHOULD YOU CARE?
Performance Management – such a huge lever for true transformation!
Here are some thoughts around how to really make a difference, what not to do and maybe some ideas what indeed to do.
All about closing the power gap you probably have in your hierarchies if you wanna get a step closer to agility and self-managed teams.

People want to perform! But only if the company focuses on personal development will the employees’ commitment grow. Only when empowerment instead of excessive demands is the premise, motivation and morale will increase. Only when the topic of performance is not only discussed once a year, but is a continuous process, can companies actually make full use of their potential without the barrel being empty at some point. For this, it is important to realise how closely the principle of performance management is linked to self-determination theory.

Deci and Ryan’s theory describes the basic psychological needs that cause high motivation and well-being in people and how these can be fostered in different social contexts. Competence, autonomy and relatedness are at the top of the list. So a key driver of human beings is indeed inherently their need for competence – the positive experience of mastering an activity and being effective. In the workplace, this is usually expressed as a basic desire for (good) performance. In other areas, it is sometimes the thrill of challenge.

Creating a Self-Efficacious Environment

Self-determination theory distinguishes between behaviours that arise from one’s own self-image, i.e. are self-determined, and those that are not representative of one’s self. While the former are voluntary behaviours associated with an experience of autonomy, the latter are instead often associated with control and pressure. We all know the related difference between intrinsic and extrinsic motivation. Consequently, it is crucial for companies and their performance management to create an environment that supports people’s psychological needs in order to nurture the right motivation.

No discussion of motivation would be complete without addressing the issue of self-efficacy. This is less of a need and more of a quality that has a profound impact on the performance and, at the same time, the well-being of every human being. If employees are convinced of their self-efficacy, they set themselves higher goals, are able to make greater efforts to achieve these goals, persevere longer in the face of difficulties and – if the worst comes to the worst – are able to overcome failures more easily. This is also because they are also convinced that they can perform and thus influence their lives.

Traditional performance management has had its day

In today’s work environment, a culture is required that is capable of change and willing to experiment, that enables the personal development of the individual as well as the collective development of a team through continuous learning. These are precisely the incentives that traditional performance management no longer provides or even destroys. The Taylorian approach of increasing industrial efficiency and making everything and everyone individually measurable contradicts the increasing autonomy and the growing team structure, including project work, network structures and solidarity. The problems with current methods in the performance management review process can be summarised as follows:

• Assessing people for past performance contrasts with possible improvements in “real time”.

• Annual performance reviews are demonstrably unhelpful because people’s thoughts are usually focused on recent events (4-6 weeks) rather than developments and achievements before that.

• What goals from the beginning of the year even make sense to work towards in the last quarter?

• The process is very time-consuming for all involved (especially leaders).

• However, it is also true that performance evaluations are NOT performance management!

All this helped to control in the past (initially the purpose), but is now of little help when it comes to unleashing the real and so valuable potential of employees. Agile principles are therefore also needed in performance management. The need is changing from productivity and output to creativity, innovation and knowledge working. Accordingly, there needs to be more room for autonomy, purpose and for achieving a mastery in certain things that fully fulfils us as people, as leaders and as employees, as well as performers.

Empowering employees without overburdening them

When people talk about agility, self-organisation or Teal these days, empowerment seems to be at the core of many concepts used in organisations – and yet many still seem to struggle with ‘real empowerment’. Looking at the Oxford definition, it should be quite simple: People take control in their work area and make decisions about everything related to it. Sounds easy, doesn’t it? However, it is easier said than done! Because many leaders do not really see and treat “their” employees as adults with certain abilities. Yet that is exactly what would be important, and by the way, does not mean that they (have to) be able to do everything, but have experience in certain skills and are able to continue learning. So in essence, the much talked about empowerment means nothing more than creating a safe space where people feel encouraged to try new things, make decisions and not be afraid to be blamed if something doesn’t work out.

The important thing to remember here is that building and maintaining this safe space is not a one-time thing, but an ongoing process that never ends. Leaders are therefore always challenged and can be sure: If a courageous team member tries something and does not get support, this will most likely discourage others from even trying. This is where responsibility is needed! So explore the situation the employee is currently in and look together where the obstacle is. Leaders are not there to solve the problem for the employee, but at best to give advice on how he or she can overcome it. If things have gone well, there is no reason why adult employees shouldn’t receive affirmation. This can be done publicly and, in the case of special successes, perhaps even as part of a small celebration to show the rest of the team that good work is being recognised.

Seven little things leaders can do right away

In every interaction with the team, leaders can and should demonstrate that they really care about “empowering employees” – for example, with the following seven small suggestions:

1. Listen to your team and make them part of the solution!

Give regular feedback and show employees that their impact is important to you and that you value their opinion. But be careful: giving feedback too frequently can also increase pressure and have the opposite effect. Amazon’s culture of constant feedback over a period of time negatively impacted employee satisfaction and productivity. Moreover, feedback is just feedback and can therefore be ignored or not acted upon. So you have to be able to let go of your own ideas in every respect. The responsibility is and remains with the team!

2. Be aware that your emotions have an impact on your team!

Something may go wrong – that is a natural part of creating something new and great. Assuming something doesn’t work out as planned or expected, stay positive and optimistic – but please, not just for the sake of optimism. Your emotions and the importance you attach to things reflect how your team thinks about things afterwards. Nevertheless, you may and should of course also analyse objectively what went wrong. Important questions from the leader’s point of view are: “How could I have supported better?” or “Which insights – or which skills – were missing?

3. Be grateful and show appreciation!

It’s just two little words, but they can make a big difference: “Thank you”. If you want to show your team that you trust them and value them, say thank you. Ideally with a short explanation of what you are thanking them for – the more specific the better. By the way, a “thank you” is sometimes appropriate precisely when something has gone wrong. As long as your team has learned something from it. Show each employee that you recognise their individual contribution. This will help build trust in the long run because people will see and feel that they are part of something.

4. Support your team to find their passion!

Everyone has strengths and if he or she is aware of these strengths and is willing to develop them, support him or her to feel a sense of belonging and success. Support your team to explore their individual strengths and give them the opportunity to use them in the workplace. This will increase motivation and promote well-being.

5. Be a role model for the behaviour you want to see in your team!

It matters that you model it, so be a living example of the behaviour you expect from your team.

6. Give your team freedom, encourage them to “find their way”!

Even if this way does not correspond to your way or your experiences. This is the only path to innovation! Especially important in a time when more and more work is done remotely, in virtual teams. This is a great opportunity for you to show your team that you trust them. It can be frustrating to not always be on top of things, but micromanaging is the opposite of empowering employees. Show them that you trust them to get the job done on time and that they can turn to you if they get stuck or need help.

7. Create supportive structures!

Clarity, transparency and guardrails help staff to get an overview and support them in making their own decisions. A defined process that explicitly explains who is authorised to do what is very important for people. What is not important, on the other hand, is a consensus on the decision-making process itself. Try out different structures and find out which ones suit you and your team best.

In summary: Especially now it makes sense to rethink the performance review process and take the first steps towards agile performance management. Doing away with classic performance reviews should have the effect of moving from “justifying the past” to “thinking about current growth & future development”. Employees should feel empowered and encouraged and leaders should have more time to focus on “culture” and the behaviours as well as values rather than just strategic goals. Pilot projects help to become experimental and instead of being “everywhere at once”, it is better to move forward in a targeted way. This benefits both the performance of each individual employee and the overall performance of the company.