If you’re questioning the effectiveness of your performance management program, you’re not alone. Our Global Talent Management and Rewards Study found that many employers believe their performance management practices fall short when it comes to driving high performance or encouraging employees to set stretch goals. We’re finding that part of the problem is that the traditional approach to performance management tends to focus on past performance, rather than on what employees can do to improve performance in the future. The good news is that employers are looking to change their approach.
A seven-step program
So, how do you create a performance management plan that doesn’t just assess performance, but fuels it? The answer will be different for every organization as it’s driven by your organization’s unique goals and culture. However, I’ve found the following steps to be essential and universally applicable when it comes to creating a performance management program that actually drives performance.
- Assess the current situation: To achieve this objective, I recommend you consult some of the organization’s various key players, including members of senior management, decision makers, managers and key employee representatives of different business units, as well as human resources executives. Serious reflection generally requires holding one-on-one interviews with 10 or so people and consolidating everyone’s perspectives so as to glean converging and diverging insights.
- Share your findings: Present everything from the assessment — including recommendations — to senior management so that broad guidelines may be approved in order to proceed.
- Define your goal: What’s the objective you wish to achieve through your program? Many organizations want to generate more meaningful conversations between managers and employees, support better skills and career development, realize employees’ full potential, foster collaboration, etc. with the goal, of course, of improving employee performance over the long term.
- Create an action plan: This is where changes are decided upon and practices are put in place. The changes should make it possible to shift from the current situation to the desired situation, while addressing as much as possible the needs expressed by the individuals previously consulted. It should be noted that these changes can sometimes be significant (philosophy or approach, evaluation topics, responsibilities, etc.), but that occasionally, all that’s needed is for existing elements to be improved or refined (practices, mechanisms, tools, etc.).
- Communicate and validate changes: Communications should focus on the new features, the reason for the changes and the objectives; train managers and employees; and set a target date to implement the changes (often the start of the reference year)
- Implement the plan: And keep these five things in mind when putting your plan into place: Don’t underestimate the impacts of change across the organization; include at least one person from the compensation team on the project; involve representatives from various functions/departments early; quickly implement a well thought-out change management and transition strategy; and have important decisions approved by senior management.
- Follow-up: Refine, adjust and improve. Ask yourself: Is the plan producing the expected results? Is it really helping us boost performance? Does it really contribute to the overall success of the organization? If you don’t answer “yes” to those questions, consider revisiting the other six steps.
Employee performance management still remains the most effective and direct way to encourage employees to excel and demonstrate expected behaviors. These 7 steps can be a useful guide to developing a program for continuous improvement that drives employee performance.
Luc Hanna, M. Sc, CRHA is a consultant at Willis Towers Watson in the Talent Management practice at the Montreal office. In addition to working with large organizations, Luc works with several smaller companies in various industries. His areas of expertise include attraction and retention, performance management, engagement, HR programs and policies, HR efficiency and strategic human resources management. He can be reached by telephone at +1 514 982 2209 or by email at firstname.lastname@example.org.