Performance management – time for HR to let go?

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So glad to read this article. As an HR practitioner, I've often disliked the annual performance review process, particularly the ratings, as some line managers had already mentally rated people ...


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We've known for nearly 50 years why this assessment-dominated, backward-focused ritual doesn’t improve performance

Performance management was supposed to herald a brave new world, sweeping away the negative aspects of old-fashioned annual appraisals. In 2004 Armstrong and Baron were full of missionary fervour on behalf of the CIPD:

Performance appraisal has a reputation as a punitive, top-down control device, an unloved system. Performance management is a holistic, total approach to engaging everyone in the organisation in a continuous process, to improve everyone and their performance, and thereby the performance of the whole organisation.

Yet in most organisations the formal end of year performance review is just the horrible, old, ineffective appraisal with a slightly more confusing name, increasingly more complicated ways of defining performance, extra layers of backroom horse-trading (to change the rating your boss has given you), and old paper forms now on inflexible computer systems. All this gives an illusion of control over performance, but in reality is a lot of expensive administration for a doubtful benefit in terms of performance improvement.

We have known for nearly 50 years why this assessment-dominated, backward-focused ritual doesn’t improve performance. So maybe it’s time to take notice of the evidence we already have about what works and what doesn't. With many organisations wondering what to do with the system everyone loves to hate, here is my list of what to let go:

1. Don’t expect a conversation that ends in a rating, especially if used for reward, to also be an open honest, motivating, and developmental conversation. Organisations may want to rate annual performance, but let’s stop asking managers to discuss a rating at the same time as helping an individual understand how to perform better. An assessment-based discussion is not the same as feedback given with the purpose of improving performance. Assessment puts the employee in an inevitably defensive and adversarial position – arguing for a good rating or a pay rise. It also highlights that they are less powerful in this conversation than the boss. A developmental conversation is neither hierarchical nor adversarial. So if you need ratings don’t turn them into a kind of phoney negotiation that distorts important performance and development conversations.

2. Don’t over-engineer frameworks for expressing priorities and behaviours. Being clear about what you are asking someone to do and how they need to behave is a key part of performance management. But HR over-engineers it all by insisting on priorities being expressed as SMART objectives for the whole year, even though we know these only work well in some kinds of jobs and usually need to change during the year. Managers are also expected to work with several overlapping or conflicting behavioural frameworks describing some or all of the organisational values, codes of conduct, work standards, generic or leadership competencies, personal qualities etc. It is not difficult to combine the behaviours required by the organisation into just one framework with examples of what these might look like at a few broad levels.

3. Don’t evaluate performance management by how many forms have been completed online. If HR wants to encourage high-quality conversations rather than compliance why is it still thrilled when 98% of employees have a performance review form completed – even if it’s rubbish? Staff engagement surveys could ascertain whether individuals feel they have useful conversations about their performance and whether such conversations lead to skill and/or career development. Business metrics can show whether areas with effective conversations also perform better over time.

4. Don’t hang onto performance management as an HR process when we say it should be line owned. If we say that performance management is part of how the line manages people then why is HR hanging on to ownership of the process? Line management should be designing the overall approach to managing performance and integrating this much better with processes for quality and service improvement, team planning and metrics, job design, and work flow.

Nothing terrible will happen if HR lets go of some of what hasn’t worked for more than 40 years. Managers and employees may start to have better conversations with lighter touch guidance and HR can stop nagging and focus on the enablers of performance improvement.

Wendy Hirsh is principal associate at the Institute for Employment Studies and visiting professor at Kingston and Derby universities

Comments

Thank you for your article. Regarding the link between performance assesment and remuneration, would you share with me other views, please? What other tool to use to base the remuneration of performance in an attractive, challenging way (specially in large Groups)? Thanks beforehand.


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Individual reward linked to a performance rating is not necessarily effective. Team-based rewards come out favourably in research, as can other forms or recognition. Interesting that GE from which many of these practices stem has now taken most of them out again! If you do wish to link individual reward to performance you can use ratingless reviews and substitute calibration of populations by management teams. Or just delegate financial decisions to managers within budget. US firms are using these kinds of mechanisms - https://www.worldatwork.org/waw/adimLink?id=80722. Duncan Brown and Peter Reilly of IES have written extensively on pay and performance. See, for example, Evidence-Based Reward Management by Armstrong M, Brown D, Reilly P (Kogan Page), and publications on IES website - http://www.employment-studies.co.uk/publications?search=performance+reward&search_resources=1#results


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So glad to read this article. As an HR practitioner, I've often disliked the annual performance review process, particularly the ratings, as some line managers had already mentally rated people before even holding the review with the individual concerned. Sometimes those ratings were irrelevant anyway, as it proved to be very demotivating to give employees excellent ratings, and then have the company decide on an "across the board, same percentage increase for everyone" approach after the whole review process had been carried out (or in some cases, no increases at all, despite good ratings being given to employees). I also find the annual review for the sake of the review a bit pointless, as it becomes a bit of tick-box exercise. I've also been aware of colleagues, in a previous company, who had basically copied the previous year's review, and just changed the dates... and their line manager never noticed a thing!


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If ts not meaningful, can we be honest and just do away with it. I dont understand how business leaders accept this broken outdated practice. They wouldn't accept the use of fax machines ONLY so why this. And examined (workplace) life is not working/worth living.


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