You hear Josh Bersin’s estimate that some 70% of multinationals are moving towards continuous performance management. You read success stories from the likes of Adobe, Microsoft, IBM, Deloitte, Accenture, PwC – even GE.
You’re convinced. Continuous performance management is the way forward.
But then you look at your own organisation, and the gap seems impassable. Frustrated managers. Barely-there annual appraisals. Resentful employees. An otherwise-occupied executive team.
How can HR support the business to break the cycle, and successfully transition from cumbersome, ineffective annual appraisals to meaningful dialogues that add genuine value to the business?
Find out below, because we’ve outlined the three most common obstacles for organisations like yours – and shown you how to lead the business through them.
You’re excited about continuous performance management, and completely convinced this will drive impactful change – and ROI – for the wider business. But the executive team aren’t behind you wholeheartedly.
Which means continuous performance management lands straight on the backburner when other projects hit crisis mode. Progress stalls before any meaningful results.
Which means your people lose faith in your commitment to change, which disincentivises engagement next time, and the cycle starts again – only harder to break.
How to break the cycle:
For continuous performance management to succeed, you need complete executive buy-in from the CEO down. This must be a priority for the organisation, not just a priority for HR. Rubber-stamping isn’t enough: senior leaders must be role models, championing the change they want to see.
To secure that buy-in, connect continuous performance management with clear ROI, to build a persuasive business case for investment.
We’re no longer in early adoption stage: there are plenty of clear, compelling proof points showing how continuous performance management drives ROI across easily trackable metrics like retention, performance and engagement. Like Deloitte’s finding that 90% of companies implementing the practice have found increased engagement.
As well as highlighting benefits, CIO note the importance of addressing risk, to prove to your risk-focussed colleagues that you’ve considered all perspectives.
Ultimately, as with any initiative, success breeds success. Proving your success will be vital to getting buy-in for wider adoption – so start small, with an area of the business you’re confident you can succeed with:
“Choose an area of the business where you have strong allies, great executive buy-in, and ideally a flexible and adept user base, and pilot your solution for some time before rolling it out widely.” (CIO)
Also think about metrics. This shouldn’t be arbitrary. As SHRM note, “the process of connecting the dots should be done to solve a business problem that has already been identified”.
In other words, choose metrics you can connect back to something executives care about right now – like performance improvement in a struggling sales team, engagement levels in a new business unit or retention in a particular division.
That will help you build a more powerful business case – one that proves relevant to the wider business and earns HR a genuine seat at the table.
Annual appraisals are like pulling teeth.
Managers dislike them because they’re tonnes of work and don’t seem to deliver value. And because appraisals prioritize improvement over praise, and because they happen so infrequently, employees usually turn up with a laundry list of problems to air, hoping for instant solutions. Frustrating. That’s why Deloitte find that 58% of executives think performance reviews are an ineffective use of time.
Employees dislike them because they’re demotivating (performance declines when forced rankings are used), biased (ratings are as much about the rater as the ratee) and focus on, as Harvard Business Review put it, accountability not development. Which means employees’ needs for valuable, actionable feedback aren’t met.
In other words, everyone dislikes annual appraisals. So you might persuade your people to reluctantly agree to quarterly appraisals instead of annual, but they still view it as a box-checking exercise to appease the higher-ups, as opposed a meaningful discussion.
Which is a self-fulfilling prophecy. When these discussions happen infrequently and cursorily, they do take loads of time and don’t add value.
How to break the cycle:
To start changing attitudes, you need to reframe the discussion. Continuous performance management isn’t traditional performance management but more frequently.
This is a new way, creating a continuous dialogue that goes beyond performance to development. As one Deloitte manager puts it, “the conversations are more holistic. They’re about goals and strengths, not just about past performance.”
Help employees understand how this conversation saves time and adds value, by providing valuable employee data at managers’ fingertips. Because managers already create all this data when they give employees regular feedback. It’s just that those feedback moments are ad-hoc and not collated into any single useful channel.
Teach managers that continuous performance management doesn’t mean doing more. It means doing different. It’s about unlocking value from the data they already create, using those ad-hoc feedback moments to structure check-in conversations more effectively.
That’s how you get managers who empower and employees who grow – without increasing anyone’s workload.
Managers focus mostly on managing their functional area; people management becomes an add-on that falls to the bottom of the to-do. In fact, Harvard Business Review report managers spend an average of only 9% of their time on developing their people.
That’s why more than three quarters of leaders are considered better at driving results than inspiring and engaging their team. (While studies prove the best leaders balance both).
Which means there’s an institutionalized lack of interest in managing people and being managed. Neither managers nor employers are convinced continuous performance management is a good idea, and you get the same old self-fulfilling prophecy.
How to break the cycle:
Like the first and second scenarios, the real issue is culture – so you need buy-in from your people. Create engagement by helping managers and employees understand why you’re championing continuous performance management, by showing them how continuous performance management drives overarching business goals like engagement, retention, productivity and performance.
The same principles as securing C-Suite buy-in apply. Start with a small group to trial and optimize your process. Early success will earn evangelists who can help you scale to other parts of the business. Don’t overstretch yourself, because if you overpromise and underdeliver you’ll only employees’ doubts and make change harder to achieve.
Then Harvard Business Review talk about the need for managers of managers to reframe their coaching, to reinforce the importance of employee development:
“Instead of asking ‘how’s that project going? You might ask, ‘How might you better support Clara on that project?’”
Again, this relates back to C-Suite engagement. You need top-down commitment to make continuous performance management work.
Training managers how to better support employees is also critical. Even if they’re fully-invested, you can’t count on managers to lead empowering development conversations unless you show them.
As Jaime Roca, a Gartner practice leader, notes: “It’s less about the quantity [of time spent on employee development] and more about the quality”. In other words, if managers aren’t leading conversations effectively then your continuous performance management efforts will flounder.
The key is to educate and empower your managers, so they buy into what you’re trying to achieve and understand their responsibilities within that.
Lead the business into the future
When it comes to continuous performance management, the gap between what you want and what you have can feel vast. Hurdles to effective implementation are cultural more than procedural, and large-scale cultural change is never easy.
But it isn’t impossible. The likes of Dell, PwC and Deloitte faced hurdles that seemed equally insurmountable, but smart, determined HR leaders refused to take no for an answer. So do the same, and lead your business into the future.