This is the second in a series of articles dealing with Performance Management (and more precisely, Performance Improvement).
There is still something missing in modern approaches to performance management.
Performance management is the very last Human Resources (HR) domain yet to be conquered by progressive organizations. Payroll systems have been around for decades. Benefit plan design and selection technology were perfected in the early 1990s. Staffing systems and training administration systems came of age in the late 1990s. Powerful employee shared service centers were implemented over the turn of the century. Sophisticated compensation schemes and salary planning software have been around for many years. Employee and manager self-service applications have grown substantially in the last five years.
Performance management on the other hand, which arguably contributes most to an organization’s success, is still mostly viewed as a once-a-year review and goal planning session between employees and their boss. Does anyone really think that this meeting, which is then captured in several vendor-driven software applications, drives performance improvement? Most organizations today are still approaching performance management systems using a paradigm that is over two decades old.
Enterprises have attacked performance management using a host of approaches and tools. Leadership development programs, courses, and consulting interventions have been staples for a long time. In the 1980s and early 1990s, companies set about crafting yearly goal-setting and review sessions, and an employee’s “focal review” was often tied to their pay increase or bonus for the year. “Visioning” to get the organization “fired up” and “aligned” was popular in the 1990s. Then there was the notion that performance was all about hiring and retaining the best people – if you got the right people, high performance would follow. There has been emphasis on metrics and reporting – better analytics would, perhaps, boost performance. The use of 360 reviews was popularized several years ago. Most recently, the focus has been on tying ever-more complex pay and bonus schemes to improve performance.
These tools add value and have their place in a comprehensive approach to improving organization performance. But, all of these tools have just about reached their limits, and most of us would agree that we still do not have performance management quite figured out.
Despite the application and honing of all these tools over the last two decades, we sense there is still something missing. There is something in the middle of all this, something big and squishy at the core of performance management, something nameless and difficult to talk about much less attempt to influence, some additional piece of the puzzle, something still missing in how we attempt to guide and improve individual and organizational performance.
This is the second of a series of articles on performance management in which I offer some insights and suggestions for teasing out a specific set of practices, behaviors, and tools aimed at what’s really missing in managing and improving individual performance. For me, the key lies in elevating the quality of the dialog between managers and their staff. Real improvements in performance can be achieved by focusing on making clear requests, forging explicit agreements, negotiating commitments that shift accountability to the performer, providing deeper visibility into execution, and building trust. I will also address the surprising role that systems (specifically, software applications) can play in dealing with this soft stuff.