Performance management has a reputation for not working – not for the employees being measured or the managers conducting the reviews, nor for the HR teams overseeing the process. As a matter of fact, research has shown that 95% of managers are dissatisfied with performance reviews, and only 13% of employees find the performance review process useful.
Your current performance management process may have its flaws, but it can be fixed, improved upon, and even become a process that employees trust, value, and appreciate.
When done effectively, performance management has multiple benefits, including:
At many organizations, this ideal state is still far away and making the necessary changes can be daunting, time-consuming, and resource-intensive. That’s why Culture Amp’s people scientists came up with an agile approach for transforming the performance process. With this approach, HR teams and leaders can make small but meaningful improvements to performance management over time.
In this article, which is based on our latest ebook, HR guide to agile performance management, we explore the importance of agile performance management. Then, we share how you can use what we call performance management “building blocks” to transform your performance management process.
Why agile performance management is the way of the future
The pandemic has shown us that during times of change, everything from communications to business planning must adapt fast. This includes, of course, performance management.
Traditional approaches to performance management are often very rigid and dependent on a once-a-year performance assessment. The annual review is used primarily for determining promotions, salary revisions, and bonuses, leaving little room for forward-looking dialogue. As a result, pivoting to new priorities can be extremely challenging, especially if goal setting isn’t included in the company’s performance processes.
On the flip side, agile performance management utilizes a continuous feedback model and cascading goals. Managers and their direct reports are in constant dialogue and clearly understand how their individual responsibilities align with the larger team and company goals. As a result, an agile performance process is not only more fair and holistic, it also empowers individuals and leaders to react quickly to sudden shifts and unexpected changes – a must-have in today’s changing world of work.
Performance management building blocks
When it comes to improving your performance management process, it can be helpful to view the distinct components of the process as “building blocks” you can use to achieve a specific result. The diagram below illustrates the basic building blocks of the performance management process.
As you can see, each building block falls into one of three categories:
Performance development - Enables future performance
Both - Both measures and develops performance
In agile performance management, you can pick and prioritize the building blocks you believe will achieve the most impactful change, given current business needs and limitations. Working piece by piece, you can effectively and efficiently optimize your performance process over time, without the stress and overhead associated with a complete overhaul.
For example, let’s say you want to drive consistency across reviews. If that’s the case, your first priority will be to implement performance review calibrations. In this process, managers discuss their proposed employee ratings with other managers to ensure that their rating scales are comparable and have common ground. This will help you reduce bias, properly reward high performers, increase review accuracy, and uphold the credibility of the performance process.
Unlock the power of an agile performance management process
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