The key to making performance management effective

The failings of traditional performance review techniques have been discussed at length in recent years, with most people in agreement that they no longer have the desired effect. Employees and employers alike are finding that age old practices fail to give real insight into employee performance and lack any real value.

The traditional performance review does not capitalise on the business processes of today. While some believe the practice should be made redundant, this does not need to be the case. Rather, it needs to be re-imagined and should include strategies that reflect modern business and employee needs.

Social recognition

An approach that has a profound effect on employee performance is social recognition, which provides bottom-up, peer-to-peer feedback. At its simplest level, social recognition democratises performance management by giving everyone the ability to recognise and be recognised by their colleagues, and harnesses the “wisdom of crowds” by collecting the opinions of many to gain a deeper and better-rounded understanding.

Business practices of today differ to those in the past, but the performance review process has not been adapted to reflect these changes. Traditional performance management techniques involve judging performance on goals and targets as defined in an employee’s job description. However, in today’s organisations, roles are less rigid and employees take on activities that are outside of their prescribed remit, yet these “extra” activities are not always taken into account when it comes to reviewing performance.

Biased review

Historically, employee appraisals take place annually (or occasionally every six months). By the time they come around, much of the good and bad work has been forgotten and it is the last few weeks or months that are focused on. Furthermore, the traditional method is limited by a “single point of failure”, whereby the employee is assessed by one manager and the review is conducted by that same manager. This means that the process can be restricted to the bias of that individual, whether positive or negative. Unless the manager can be truly impartial, the review can often be at odds to the opinions of others.

While traditional performance appraisals as a stand-alone process are failing to have the required effect, when combined with crowd-sourced feedback their worth can be greatly elevated. The feedback received from the crowd offers valuable quantitative and qualitative data that can be used to shape a formal review.

Social recognition allows every employee to be recognised for their work constantly and immediately by those individuals that see or are affected by the behaviour. This ensures that when it comes to the performance review, the work of previous months is not forgotten as it has been recorded as it happens. As the knowledge is derived from peers who work with the employee every day, the feedback holds more weight and allows for reinforcement through tangible examples. This helps the employee understand how their performance affects their colleagues and how it can be improved to have a greater impact.

Improving performance

The crowd-sourced data can also show elements of an employee’s performance that may be lacking. For example, an employee who has been frequently recognised by their peers for tasks performed in isolation, but who receives no recognition for teamwork, may indicate that the employee requires support to improve their team-working skills. Combining these two processes gives real, valid and timely examples of behaviour that can be used as part of an ongoing performance management conversation.

The process can be further improved by having a clearly defined set of organisational goals and values. Encouraging all employees to reflect these values in the actions that they take will create a strong corporate culture that is based on the mission of the company as a whole. As everyone within the organisation begins monitoring the characteristics that define the culture, all participants become highly sensitive to the right values and behaviour, and reinforce them.

Correctly implemented, social, strategic recognition programmes have a positive effect on employee motivation and performance. When an employee can see they are adding value to their organisation, they have a much greater reason to be engaged with their work and, in turn, this sense of meaning creates higher levels of performance. The opportunity for reward is huge, from individual performance to business growth.

Eric Mosley is CEO of Globoforce. He expands on these issues in his book “The Crowdsourced Performance Review: How to Use the Power or Social Recognition to Transform Employee Performance”.

XpertHR offers a good practice guide to performance management (subscriber content).

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