How to Grow Part 1: Performance Management in 3… 2…

“Only 6% believe their current process for managing performance is worth the time, 58% called their process ‘weak,’ with North American companies 20% worse than the rest of the world.” – Josh Bersin (@Josh_Bersin), Corporate Talent, HR, and Learning Analyst & Founder of Bersin by Deloitte

Only 6%… that’s a pretty slim number of organizations who have a strong performance management system. So what’s the problem? There’s a good chance these companies joined the performance management party late – as in after their employee base grew. Create a performance management system before you begin to gather your team. It’s important to know how exactly you plan to manage the performance of a team before they are onboarded. Why? Unless there is a performance system in place, it will be increasingly difficult to accurately develop and maintain a system of performance appraisals, management system updates, and team alignment with each new employee.

Problem: Performance Appraisals
Is it really a performance appraisal if it doesn’t truly identify performance? The answer is no. In fact, performance appraisals are sometimes wildly erroneous and can lead to more performance problems than they actually solve. For example, two-thirds of employees who receive the highest marks during their performance appraisal are quite frankly not the organization’s top performers. Sounds like an oxymoron, right? The underlying problem is that these performance appraisals are outdated and tend to be overly biased. The results are less than flattering. While good employees know they are good, bad performers on the other hand don’t know how poor their performance is. This is because the performance appraisal system wasn’t created until after the maturation of the team, so a set standard of performance regulations wasn’t immediately put into action.

Solution: Create a performance appraisal plan when you recognize the need for growth in the number of employees. Doing so will prepare the organization for the new hires and monitor their growth and performance.

Problem: Updating Outdated Issues
It’s really just a formality. Does it honestly need to be updated? Absolutely. The outdated system your organization currently uses needs to be updated. While the company may have originally compiled some sort of performance system for compliance regulations, that certainly doesn’t mean the data from the performance appraisals couldn’t be useful. The data for how the employee works and what they get done during the day can set expectations of the employee, demands of the position, and expectations of the supervisor. Updating your performance management process not only helps the development of your employees, but drives business value as well. Unfortunately, only 8% of HR executives say that their organization effectively uses their performance process to drive business value. Therein lies the problem with using an outdated system – it can in fact damage the value of your business.

Solution: Consistently update the performance management system to meet the needs of the organization and the employees.

Problem: Team Alignment
The team doesn’t know the goals of the organization, so they don’t understand how their performance fits into organizational needs. Often, the biggest downfall for employee performance is their lack of understanding of organizational goals. If employees are unaware of how the company plans to grow, how can they gauge their own performance? When employees are aligned with organizational goals, they are more engaged while in the office. When employee engagement is high, employees perform 20% better and are 87% less likely to leave the organization. In order to form a high-performing team, it’s crucial the entire organization understands and shares goals. President and COO of Technomedia, Marcel Messier said:

“If leadership is unable to create a clear roadmap that can be communicated and embraced throughout the organization, it will be much more difficult to establish a high-performing workforce able to meet those goals. Alignment only will be achieved by ensuring strong leaders are in place at the top and capable of clearly communicating goals and expectations and providing employees with ongoing learning opportunities to expand and enhance their skill sets. Once these factors are put into place, the organization can benefit from an optimized workforce that operates cohesively to overcome challenges and achieve key objectives.” 

Solution: Integrate alignment into performance management. When the team knows how their work affects the organization, they are less likely to leave and more likely to become high-performing employees.

Not all performance appraisals were created equal… the outdated and antiquated ratings will do little to improve an employee’s performance. Performance appraisals must recognize accomplishments and notate areas needing improvement. Likewise, if the management systems the organization uses aren’t up-to-date, it’s unlikely the performance management system will do much to drive business value. Ultimately, without alignment throughout the organization there’s little hope for an overarching level of high performance and engagement.

Your company needs these three things before your team can grow. Otherwise, it’ll not only be difficult to manage employee performance, it will be ineffective. 

See how you can begin cultivating growth in your organization right this second.