Transforming performance management? Part 3: Invest for success


Part 3 of a 3-part series

Posted by Joan Goodwin, Diane Morris, Greg Scott, and Josh Davis on Febuary 06, 2019.
The pressure is on. Many organizations are realizing their performance management approaches aren’t suitable for the new realities of work and certainly aren’t agile enough to meet future needs. In fact, as reported in a recent Human Capital Trends, 79 percent of executives rate redesigning performance management a high priority, with 38 percent calling the problem “very important.”

But, as we’re exploring in this series, performance management transformations are rarely easy or risk-free. In our first post, we identified a few common pitfalls of transformations and ways to avoid them. Then, in our second post, we discussed how leaders can get the transformation effort started on the right foot by thoughtfully considering the overall purpose and objectives of performance management at their organization.

Once the new performance management design is finalized, organizations turn their attention to the implementation and adoption phase. In our final post of this series, we’re exploring a few critical investments that contribute to a successful implementation. Let’s dig into how the case for change, the right technology, and manager capability are critical to performance management transformations.

Invest in . . . communicating the case for change
Why? Performance management is widely disliked and is the talent program people love to hate. Our high-impact performance management study found that most performance management approaches are still failing to generate intended organization outcomes.1 Employees often don’t clearly understand the evaluation criteria or find the evaluation process to be unfair or inconsistent across the organization. Still others feel that there is a lack of transparency around the link between performance and compensation, or that their managers lack coaching skills.

We recommend that organizations listen to their employees—who, after all, know best what motivates them—and crowdsource their input during the redesign phase; this data can be leveraged again during the implementation phase to tell the story of why performance management is changing and how it addresses those hot button issues or pain points.

Employees know what will make their experience better, their rewards more transparent, or their development opportunities more relevant. Their voice can help make the “what’s in it for me?” messaging compelling and clear.

Another consideration in the case for change is to share a behind-the-scenes look at how the redesign was done and how employees’ crowdsourced feedback was used in the design. Most employees in the organization do not have insight into the options considered, the decisions that were made, or the reasoning for those decisions. Showing how their input was incorporated into the design will aid in the speed of adoption of the new approach. Employees will more than likely feel a greater ownership in the design, which will help in making the implementation successful. Don’t miss an opportunity to create a groundswell for change by being transparent and inclusive every step of the way—this energy can enable, accelerate, and sustain the broader implementation efforts.

Invest in . . . selecting the right technology and tools
Why? Performance management technology is the enabler of the organization’s design and is a critical component to a great employee experience. Operationalizing a new performance management approach means considering how the new design will actually function in the “real world.” Chances are, if the technology feels clunky or burdensome, employees may not meaningfully engage with the new approach, no matter how great it is in theory. It’s important that the technology platform selected has a user-friendly interface and mobile device compatibility. Organizations are looking to create more of a consumer-grade experience with performance management so that the system is easy to access and use in the flow of work.

Some organizations are reconfiguring their existing technology to more effectively enable their PM redesign, but many are looking at and considering best-in-class performance and talent management platforms that create a more engaging experience.

Work, workplaces, and workforces are all becoming more digital, and that digital transformation is driving demand in the market for a better, more agile and configurable technology solution. When considering a new technology, it is important to think beyond the present and choose a technology that the organization can grow with. The technology doesn’t need to be the flashiest or most expensive, but ensuring that it will truly drive a more engaging employee experience and help provide the data needed from the performance management approach to make talent decisions is a critical success factor in enabling a successful redesign.

Invest in . . . building manager capabilities
Why? Leaders and front-line managers play a critical role in driving employee performance and behaviors, and it is their job to create conditions and environments where employees succeed. Unfortunately, many organizations fail to understand the skills that managers need to support a new performance management approach, and thus fail to develop the needed manager capabilities.

There can be significant gains in investing in a coaching culture and managers who are more effective people developers—and yet, one of the top challenges to effective performance management is managers’ inability to coach effectively. The business case is clear. Effectively coaching and developing employees can boost their performance by as much as 27 percent, increase their intent to stay in the organization and their commitment to the organization’s success by 25 percent, and increase their effort on the job by 18 percent.2

Consider what capability gaps exist in managers and what resources are needed to fill them—including both up-front training before implementation and ongoing support afterwards. Then, create a clear plan and strategy for both development and for holding managers accountable for demonstrating these capabilities. Many organizations are holding managers accountable for people development and coaching through upward feedback surveys, where employees evaluate their manager’s coaching skills. Consider how your managers could benefit from this feedback, and if or when it should start to become an input to their own performance metrics.

The bottom line

After spending a great deal of time and energy on the redesign process, it can be challenging to secure the resources needed for the implementation phase. Change, even good change, is complex, and a redesigned performance management approach requires a shift in mindsets and habits across the organization. While each transformation is unique, the investments we describe here are common to successful transformations and pay dividends to the organization for the future.

Joan Goodwin is the performance management practice leader in the Human Capital practice of Deloitte Consulting LLP, focused on talent management, performance and development, culture change, leadership development, and change management.

Diane Morris is a consultant in the Human Capital practice of Deloitte Consulting LLP, focused on performance and development, employee experience, and talent strategy

Greg Scott is the deputy performance management practice leader in the Human Capital practice of Deloitte Consulting LLP, focused on performance and development, HR service delivery, training, and change management.

Josh Davis is a senior consultant in Deloitte’s Workforce Transformation practice, focused on talent strategy and program design that helps organizations create meaningful employee experiences built upon deeply integrated processes, incentives, and systems.

1Seven Top Findings for Moving from Managing Performance to Enabling Performance in the Flow of Work, Bersin, Deloitte Consulting LLP/Kathi Enderes, Ph.D., and Matt Deruntz, 2018.
2Seven Top Findings for Moving from Managing Performance to Enabling Performance in the Flow of Work.

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