Senior leaders are deeply concerned that Performance Management is still viewed as a box-ticking activity, warns Glint’s Jim Barnett (pictured, above)…
The HR performance management landscape is changing dramatically. Business leaders know they can get more value using performance management to engage and develop people rather than to just assess them — however, while they recognise the link between employees’ level of engagement and their performance, most still run performance management and their employee engagement on separate tracks, according to a recent survey from The Harvard Business Review’s Analytic Services.
In the c-suite, it is well understood that there is a strong link between employee engagement and performance; 75% of respondents strongly agreed with the sentiment, engaged employees tend to be higher performers. Nearly as many – 69% – strongly agreed that it was difficult to improve performance without also improving engagement. Business leaders also understand that “highly engaged employees are more creative, provide more collaborative support to peers and clients, and bring more energy to work,” president and founder of Bersin & Associates and global industry analyst Josh Bersin says.
Some organisations may view performance management and employee engagement as less strategic, sure. But, the increased competition for top performers drives successful companies to think harder about retaining and getting the best from its employees. All an executive has to do is look beyond the current quarter or year to know that investing in employee engagement is always a sound investment for long-term health.
Engagement goes much deeper than office parties and employee perks. It’s concerned with fostering a genuine commitment to the organisation’s mission, and helping employees develop, learn, and grow. In high-growth situations — or, especially in the case of companies with tight margins, where every little bit of improvement counts —engagement leads to higher levels of individual effort, with employees willing to go above and beyond their job description without ever being asked.
PM tends to focus too heavily on evaluation, precluding any focus on employee development. When approached like this, performance management can actually have a negative impact on engagement.
At the same time, processes that focus only on development and engagement and aren’t linked to performance management may not serve the organisation’s best interests. When the approach includes both development and evaluation in a continuous process however, performance management can actually increase engagement.
It’s the combination that matters. For example, in the Harvard Business Review Analytics Services study more than 90% of the 717 business leaders who responded to the survey believed that not only did engaged employees perform better, but also that employee engagement was critical to their business’s success.
“It comes down to the philosophy of why you’re doing performance management in the first place,” says Bersin.
“There are basically two reasons to do this. One is for competitive assessment, so at the end of the year we know who the top people are and who the bottom people are, and we weed out the bottom people and reward the top people. Or,” he believes, “we’re going to do it as a coaching and development process that recognises all employees have the potential to develop and contribute more value to the organisation.”
In this latter case, he adds, “We’re going to encourage and teach managers how to have continuous development conversations with their people.”
A new approach to bringing the two together
While most organisations may have philosophically bought into such a development approach, only best-in-class companies have actually transformed their performance management efforts in this way.
Of course, doing so requires:
- systemic, enterprise-wide changes, including senior leadership commitment to, or at least support for, the approach
- more regular and frequent manager check-ins to give and get feedback, discuss goals, and map out development opportunities
- leadership development for managers — both to increase their own engagement and to teach them how to improve engagement among their teams
- and finally, software and systems that bring together all the relevant data and help managers gain new insights.
While these changes may not be easy, they also don’t have to be done all at once. Organisations looking to transform their performance management efforts can start by choosing one of these areas and making incremental progress there, resulting in bigger change over time.
The emerging consensus on best practice here is that companies that make this shift now and merge their PM and employee engagement efforts are positioning themselves for stronger performance and greater resilience in the future. Engagement data are incredibly valuable assets in the drive to better manage performance. Companies that integrate engagement data into their performance management efforts are gaining unique insights that enable them to change the game in their industries.
“We need to step back and ask ourselves, ‘Why do we do performance management?’” said a product leader at a consulting company surveyed by the Harvard Business Review Analytics Services team, “It’s to develop employees, help them grow, and give them feedback that will make them successful.”
“It’s also always going to be about an investment in growth, rather than just having a number to feed into compensation. It’s about supporting the growth of the individual and the organisation.”
The author is CEO at employee engagement leader Glint, part of LinkedIn.