Perfecting Performance Management (by Marc Effron | Talent Management)

-By Development Network-

 

Few talent processes are as powerful or as widely despised as performance management. The steps to align employees with corporate goals, coach them to higher performance and assess their accomplishments often elicit an unending stream of complaints from managers and employees alike. Talent managers should ignore the siren's calls to eliminate the performance review, and instead create a process that's guided by science, easy to use and features clear accountability.

 

Thanks to 60 years of psychology research, we have information to set goals that create higher motivation and drive performance. Science tells us that:

 

1. More difficult goals produce higher performance:

We increase our effort as a goal becomes more challenging. The old performance management maxim of "three regular goals and a stretch goal" doesn't cut it. Today it should be four stretch goals.

 

2. Goals motivate better when they coincide with self-interest:

When we believe a goal can help us earn, learn or realize other personal objectives, we'll be more motivated to complete it. This doesn't mean employees should set their own goals. In fact, allowing them to do so can easily reduce the power of the first point.

 

3. Fewer goals are better than many:

The more goals we have, the less effort we can give to each. Science doesn't tell us the right number of goals, but my experience is few of us have more than five truly important goals in any given year.

 

Many parts of the typical performance management system add complexity to the manager's life without adding value. You can eliminate many traditional bells and whistles to make your process easier and more efficient for your managers.

 

4. Encourage a one-page goal setting and review form:

We can all agree it's not about the form, but a complex, difficult-to-use form can poison the process for both managers and employees. The only form elements supported by science are a goal statement, metrics and a section to evaluate results. Anything else you want to include should be considered guilty until you prove it innocent.

 

5. Kill the labels:

Fancy classifications such as "valued contributor" or "star performer" complicate the message you're trying to send to employees. Simply tell them they exceeded, met or partially met their goals last year.

 

6. Precision does not equal accuracy:

Especially popular in scientific and engineering cultures, the precise, formulaic calculation of a performance score gives managers comfort but adds absolutely no value. It is impossible for a manager to accurately measure the difference between a 3.7 and a 3.8 performer. Eliminate the calculation, and force managers to consider the totality of accomplishments and assign a rating.

 

Even the most well-intentioned manager might not always complete performance management in the time and fashion you require. Two powerful levers can help.

 

a) Time-bomb communication:

We can help managers do the right thing by making our expectations visible. At key points in your process - goal setting, coaching, reviews - have your CEO or HR leader send a message to every employee covered by performance management detailing the process and expectation.

 

The message should describe the process, timing, what employees should expect from their manager and what managers should expect from employees. You've handed the manager a ticking time bomb and given him or her easy instructions to defuse it.

 

b) Forcing/guiding/managing a distribution:

Highly controversial but increasingly popular, providing strong guidance for performance distribution is a response to the chronic inflation of ratings seen in most companies. If properly challenging goals are set, a reasonable distribution should be achieved. But until managers are fully competent at this activity, the training wheels provided by managed distributions are a helpful tool.

 

Spend one hour today thinking about how you could decrease complexity, increase transparency or drive more accountability in your performance management process. You don't need to redesign the entire process; simply chip away factors that are causing the most pain. It's the most powerful thing you can do to improve your company's performance.

 

 

[About the Author: Marc Effron is president of The Talent Strategy Group and author of One Page Talent Management.]

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