It’s no surprise that performance reviews – across most businesses today – are changing.
For years organizations have complained that performance management needs to evolve to deliver company-wide business value. In fact, studies show that only 6% of organizations believe their current process for managing performance is worth the time. With less than one-third (31.5%) of U.S. workers engaged in their job, HR leaders want an easy, better way to help managers become effective coaches and successfully develop, engage, and retain top talent.
For decades, performance management has focused on accurately evaluating employees’ past contributions to guide rewards such as salary increases and bonuses. What’s been missing is the focus on impacting future employee performance.
A new era of performance management is here
Today most company leaders want performance management to be a more continuous process, where performance oriented conversations occur throughout the year and routine feedback helps ensure ongoing employee development and growth.
There’s no doubt that the next wave of performance management ̶ made possible by cloud and mobile technology innovations ̶ will focus much less on annual evaluations, and much more on providing employees the coaching and feedback they need to constantly grow in their roles and improve.
As an example consider our new Continuous Performance Management capabilities launched last year as part of SAP SuccessFactors Performance & Goals. A year following launch we have customers of all sizes and industries using these capabilities to facilitate routine one-on-one manager and employee check-ins and lightweight coaching and feedback. What these early adopters have said is that Continuous Performance Management has helped keep employees more motivated and engaged, which is leading to improved innovation, productivity, and overall bottom-line performance.
Indeed, more and more organizations are looking to move to a more continuous performance model. Yet companies know that making the switch requires more than creating a new performance process or deploying a new application. Based on our own experience working with customers, even the organizations most eager to make the change have struggled with how to get started.
Determining the real value of change
So, what advice is there for companies interested in continuous performance management, but don’t know where to start? The first step should be a test run in the form of a pilot. Of course, running a pilot is not required but it’s often the best way to gauge how individuals in your organization perceive the change, and importantly the value of the Continuous Performance Management tool. It’s a great way to gather feedback on specific features and functionality that managers and employees find most valuable, and where more guidance and training are needed. A pilot will also provide insight into how you may want to position and message the change for different groups in your organization before rolling it out more broadly.
A pilot of Continuous Performance Management is as easy as four simple steps:
1. Run an initial test within your HR group – Give the team approximately one month for the initial test. Make sure those participating in the pilot assume the role of manager and employee. Assign tasks so that users can explore the features and functionality and get familiar with how the solution works on mobile and via the desktop application. Have users create and share activities, link activities to goals, request and share feedback from peers, capture achievements to discuss during one-on-ones, provide simple coaching, and more. Be sure to document questions so you are prepared for what might come up during the larger pilot or rollout.
2. Define a target group and population – You want to get a good cross-section of feedback, ideally from between 50-100 people. Be sure to select a diverse group of users that includes both managers and employees from different departments, divisions, locations, etc. Next you want to set the pilot duration keeping your organization’s culture in mind. If one-on-one meetings between managers and employee occur weekly then the pilot should run 1-2 months. If they occur monthly, then the pilot should run at least three months. Keep in mind that the higher the frequency of one-on-ones, the better the opportunity for positively impacting performance and engagement.
3. Enable managers and employees – It’s important to remember that continuous performance management requires changing the behavioral habits of managers and employees – that is, getting them to engage in ongoing conversations and feedback that otherwise might not happen. While technology plays a role, customers will tell you that success hinges not only on the technology itself but also on what happens outside of the technology – namely the change management and training that occur to support it. As a result, you want to be sure and devote sufficient attention to engage, educate and train managers and employees who are participating in the pilot. Hold a kick off meeting to cover the who, what, how, why for your pilot. Create and share enablement materials with customized training content that highlights how the features of the solution work as well as the value they deliver. Conduct training sessions to ensure pilot participants use the tool according to its full potential. Think about how you can incent, prompt and remind employees and managers to embrace the new tool. Lastly, make sure you have resources in place to answer questions during the pilot.
4. Solicit feedback and assess value – To understand how the solution adds real value, you want to be sure and gather feedback from pilot participants. You can do this by administering a simple survey. Questions should focus on functionality and value (Does the tool help ensure better goal alignment? As a manager, do you have better visibility into what employees are working on? Do you have better, more up to date information to make employee decisions? Are your one-on-one meetings more productive and structured than before? Does the tool help you save time completing certain tasks?), usability (Is it intuitive and easy to understand? Is it enjoyable to use?), performance (Does it perform according to expectations?), satisfaction, and likelihood to use and recommend. As you assess the feedback, be sure and analyze results according to different roles, locations, functional groups, usage, etc.
In today’s organizations, the rate of change is constant. With that said, the way that change is managed makes all the difference to its success or failure. As you think about redefining performance management, remember that good change management training is essential for supporting managers to be effective stewards of change throughout your organization.
People in general can be skeptical and resistant to anything that changes the status quo of their everyday work lives. Make sure that managers and employees understand that moving to continuous performance management doesn’t mean extra work for them. Reinforce the benefits both short and long-term – the ease with which employees can capture what they’re working on and their achievements, transparency for managers into their team’s progress against goals, more timely feedback, higher engagement, time saved completing annual self-assessments, etc.
With proper training and onboarding for both employees and managers, new technology that enables continuous performance management can provide strong ROI to help your organization drive better business results. These tips will help you get your feet wet and ultimately succeed.