Question

Performance Management Process

Many times, people confuse performance management with one element of the performance management process: performance appraisal. Performance management is much more than a once or twice a year event. It is a critical process that aligns individual goals and performance with the strategic goals of the organization. In some organizations, performance management is part of an overall talent management or human capital management program, which is the process that organizations use to both attract and retain skilled employees. In many organizations performance management and talent management are synonymous. Regardless of whether it is viewed as an element of a larger process or is the overarching process, an organization’s performance management plan needs to also be designed to develop and retain talent for the organization.

Planning is the first component of a comprehensive performance management plan.

This part of the process involves setting expectations and goals for groups and individuals. These goals need to be aligned with the strategic goals of the organization, and they should also include the goals that the individual wants to achieve. Aligning the goals of the individuals and the organization is an effective method of achieving the goals of both. Additionally, involving the individuals in the process of setting goals and expectations can lead to greater employee engagement. Determining measurements is also an important part of the planning element of the process. Using SMART goals is one method of determining measurements. The term SMART goals stands for Specific, Measurable, Achievable (with stretch), Relevant, and Timebound. Another benefit of a SMART goal is that employees will know if they are meeting their goals—setting goals properly will set up an almost “automatic” feedback loop for the employees. They will know how they are contributing, which can also lead to greater employee engagement. Finally, when employees are involved in the planning, communicating goals and expectations with employees becomes an inherent part of the process rather than something that must be designed separately. Involvement from the beginning encourages two-way frequent communication between managers and employees.

How does this part of the Performance Management Process operate within your workplace or an organization that you are familiar with?

Answer 1

I have included the Deloitte organization, one of the reputed management consultancies in the world. Being a consultancy, they try to inculcate cutting-edge performance management practices in their firm.

Previously Deloitte used to conduct feedback sessions once in a year. Objectives are set for 65,000- people at the beginning of a year; the after each project the manager rates his team members and offers comments. After consensus meetings, a single year-end rating is arrived at.

But Deloitte felt that such long intervals between feedback are becoming less valuable. Also, the process was too tedious and inefficient consuming around 2 million hours a year for completing the ratings and holding the meetings.

They now simplified it with no once-a-year reviews and no 360-degree-feedback tools. Now it is focused on constant learning and feedback. Instant of 360 degrees only the immediate team leader is asked to give comments about a member. The questions asked, to the team leader, are about the future actions with respect to the member. They don’t ask about the skills rating of their team member or their perceptions about the team member. They ask what they would do with each team member instead of what they think of that individual.

Example of one among four such statements :

“Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus”

These data points are collected over a year continually and weighted according to the duration of a given project. Then each quarter the data is assessed to review a subset of employees.

Also, the new design expects team leaders to check in with each team member once a week.

Also, the snapshots of performance are not kept open to avoid the team leaders and members from getting biased.

In short, Deloitte has moved from just using numbers via ratings, in feedback, to capture the abstract factors and behaviors in an employee performance. It has simplified the capture of past performance and communicating with them. It has also increased the number of feedbacks per year - by increasing the number of evaluations through an increased number of check-ins. This also leads to increased conversations and frequent immediate feedbacks resulting in instant results.

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