Companies with the proper focus hold regular team sessions, often without supervision, to determine how they are doing and how to improve results to measure team and individual performance. Thus, they are providing their own feedback to one another. Some teams also provide feedback in a multi-rater format to individual team members.
In most companies, the performance management program is imposed on supervisors, who, in turn, impose it on their employees. Often, the HR team ‘owns’ it and is assigned accountability for this imposition. In effect, performance management is pushed on employees, and supervisors try to ‘manage’ employee performance. Unfortunately, the result is a battlefield on which supervisors and employees prepare strategies and tactics to get the highest possible performance rating by arguing contentiously about ratings.
To end this performance mismanagement, it is necessary to transfer the ownership of performance improvement to individual employees and teams. Instead of simply managing their performance, they should be launched on a quest for the information they need and the tools necessary to improve their performance and that of their teams.
In companies that have embarked on this performance quest, supervisors create the demand for feedback to employees on how they are doing. This feedback comes from data flows and answers to questions that employees ask about performance. Employees should be avidly interested in improving their performance to participate in incentives and, in some cases, company stock appreciation.
Companies also should take responsibility to build their own human capital, which is portable. The more employees learn about how to satisfy customers and make money for their company, the more valuable they become within their own company, or to another company.
Once employees have taken ownership of their own performance, some companies have eliminated overall performance ratings. Instead, employees rate how they and their unit have performed based on information they have gathered in their efforts to improve business results. They typically prepare simple self-ratings on a regular basis, rather than once or twice a year and they seek their supervisor’s input on how they have judged each major component of their performance.
To enable companies make merit increase decisions, they need to make over all individual performance ratings. Companies using the performance quest approach find that making year-end pay decisions is a virtual no brainer. Employees and managers have shared performance information continually throughout the year. As a result, there are few surprises. Merit increase decisions become even easier if minute and meaningless distinctions in performance and pay are avoided.
In most organizations, somewhere around 10-15 % of the people are delivering truly superior results and should be paid a premium. Another 5-10 % are under performing and should receive less than the average. The majority of employees perform just fine and should receive the standard merit increase. It is significantly easier to identify top and bottom tiers of any employee population than it is to make rating decisions for every single employee. Some companies also shift some pay for superior performance to incentive plans based more on team performance.
Employee ownership can be increased by tools constructed by employees, or provided by management, such as:
* A weekly results sheet that helps track performance;
* A business impact scorecard;
* A work problem-solver computer program;
* An action planner;
* A guide to group and individual performance conversations;
* A self-assessment guide;
There are two critical process changes needed:
Avoid making performance management a once or twice-a-year transaction that pits employees against supervisors. Instead, performance feedback should be supplied from multiple sources, including the supervisor, on a daily or weekly basis as part of “how we manage the business.”
Shift from a ‘one-size-fits-all’ process covering different types of employees to a process that is tailored to the nature of the work. A performance improvement process that fits a staff employee, such as a corporate attorney, is unlikely to work for laboratory scientists, brand managers and sales representatives.
Also, some employees, such as sales representatives, tend to spend long periods of time on the road alone or with sales team members. A process for improving performance in such a highly independent job should be different from that used, for example, for service centre employees doing inbound trouble shooting and housed in a single location with constant contact with their supervisor.
Focus performance management efforts on improving business results. Shift accountability and ownership of managing performance to individuals and line coaches instead of just the boss or HR function.
Use a custom process that draws on robust business results regularly, instead of a once-a-year transaction and a one-size-fits-all process for different employee groups.
Companies that have made one or more of these three shifts have cut costs by double-digit levels, improved growth rates and reduced unwanted employee turnover.