COVID-19 has brought huge changes in everything we do today; organizations are remodeling functions to adapt to the changing scenario with new processes. When we talk about performance management, leaders today, agree that the performance management system should be re-designed and re-calibrated to be more aligned to the post-COVID or recovery phase.
Nevertheless, the question remains as to how precisely HR practitioners can make performance management more useful this year, and in the years to come?
Many organizations are still working with traditional outdated performance management processes, despite the rising indication that they damage the well-being of an organization and consume valuable resources that could be used elsewhere. A lot of organizations including Fortune 500 companies have all realized that not only are traditional yearly performance reviews highly expensive; but the entire process may cost around €30 million for an employee count of 10,000 and on top of that they are a little worthless. Even worse, for about one-third of cases, traditional performance management methods can even negatively impact talent retention.
On the other hand, many organizations have been able to shine during the COVID-19 pandemic; these organizations were the ones who revised their performance management processes to suit the new normal. Organizations that were agile and adapted quickly, helped their employees make informed judgments about priorities and where to focus their time. On the other hand, organizations that have struggled are now investing reactively in an improvised performance management strategy to provide better clarity to their employees regarding performance evaluation access and reward.
A comprehensive performance management processes have seven components:
- Setting goals
2. Clarifying roles and responsibilities
3. Planning and aligning performance
4. Monitoring and measuring
5. Learning and training
6. Assessing and evaluating
7. Recognizing and Rewarding
Most organizations focus on only a few items in this list and happen to miss considering the importance of interactions between all of these items for a consolidated outcome. Employees who clearly understand the organization’s goals and objectives, perform better and contribute with full force.
1. Seeing goal
Setting goals is about ensuring that every employee truly understands what is the objective the organization is working towards and why they are asked to perform a certain task or project. It involves sharing the VISION of what the organization seeks to achieve over a defined period of time., the MISSION as to why and how it plans to do so, and the STRATEGY (the operational choices it has made), the VALUES the organization stands by and the quality standards by which it seeks to live and be judged), and the core SKILLS they expect employees should have.
2. Clarifying roles and responsibilities
Explaining job descriptions or roles is not merely about sharing job descriptions. It is about ensuring that each employee understands their role and the overall contribution they are expected to make to the organization’s goals. In may also involve describing the level of autonomy their role offers as it is about defining exactly how they should operate.
Many HR/Performance Management Experts are realizing that employees today expect four things: Clarity, Assurance, Recognition, and Empathy. Clarity about their role and their expectations of them; Assurance that they will get all the support to meet those objectives; Recognition for what they achieve and how they achieved it and Empathy or understanding of their circumstances (internal & external).
3. Planning and aligning performance
Planning and aligning performance requires ensuring that every employee understands and is committed to meeting their performance-related expectations. It includes :
- What is expected from them/What they should deliver
- How they should do that (what behaviors, processes, and regulatory standards are to be met)
- What will they achieve
- How they will be evaluated
These expectations need to be understood, defined, and agreed upon with each employee, to a granular level of specificity. Details should be shared according to their role, capability, and commitment.
4. Monitoring and measuring
Monitoring and measuring performance is about warranting that both the managers and the employees are equally engaged in monitoring and measuring all key aspects of performance (WHAT, HOW, and GROWTH). Only then you can be sure that each employee gets satisfactory, timely, and valuable feedback and support for further learning and development. This element also ensures that future assessments can be data-based.
For monitoring and measuring performance, total clarity is needed about the target, standard, and minimum acceptable levels.
5. Learning and Training
Learning and Training is the key to better performance. Feedback given by a manager, if backed by appropriate training, will help improve employee’s skills, motivation, and overall output.
Many employees state that during the COVID-19 crisis and through the use of virtual platforms, they have had more interaction with their managers than ever before. Hopefully, this will continue with managers taking more time to interact one-on-one with each of their team members and using those myriad interactions throughout the year to enable and enhance their performance.
6. Assessing and evaluating
Assessing and evaluating employee performance have always had distorted lines. If expectations are clearly defined, understood, and agreed upon sufficiently in the beginning , assessment is a data-based, factual, and unbiased process that answers the question, “To what extent were the objectives met?”
When evaluating performance, managers should consider all of the circumstances, such as external factors, deviations in internal circumstances, complications faced, matrix demands, etc. True evaluation requires that the manager is thoroughly familiar with all the factors and is honest enough to make and stand by their judgments.
Assimilating assessment and evaluation typically results in poorly calibrated evaluations that do not match with outcomes in reality. COVID-19 is seriously revealing instances where evaluators/managers who do not have a firm grasp of how their team members are performing and of the difference between assessment and evaluation. We have to upskill the managers also to have a better understanding of assessing and evaluating remote teams.
7. Recognizing & Rewarding
Recognizing & Rewarding is an essential element in the entire performance management process. However, many organizations and managers still have to understand that relating pay and benefits to poor-quality appraisal data; using financial incentives to try to improve performance; and applying mechanized and impersonal recognition processes do not improve overall performance. Instead, it can even incur unnecessary cost and lead to lower employee engagement levels and performance.
The recent pandemic has also fueled a debate around pay-for-skills or skill-based pay. This conversation has touched the aspect of paying a premium salary or incentives for certain in-demand skills required in a job or this might also include paying a higher salary or bonus for the skills possessed by an individual to perform better in their current role.
In the present environment, it has become crucial for organizations to re-look their performance management strategy. It is based on the premise of encouraging the right behaviors and develop processes that will result in desired business outcomes in the remote working employees.
In the current times, recognizing and rewarding should include –
- Re-calibration in existing processes as per changing business priorities and changing demand for certain skill-sets
- Revising compensation for roles/tasks that deliver the greatest business value
- Re-thinking performance management with a focus on empathy, employee experience, and providing all support for performing well.
What’s the Future?
COVID-19 has re-confirmed the importance of timely, sincere, and personal recognition. Great managers are paying close attention to each of their team members, demonstrating consideration and empathy, caring about their wellness and feelings, and recognizing and appreciating the good performance. Mind you, they are doing this as part of enabling and enhancing, during everyday short conversations, and not by waiting for some formal review meetings.
Humans are not simple and performance management simply isn’t simple either. But, delivering on each of those seven components can be very easy if we prepare ourselves a little by:
- Training capable employees for people management positions and equip them better for the role.
- Select the right people for those positions based on their capability to manage performance management
- Recognize and reward top performers who are not suited to being, or don’t want to be, people managers in ways other than just giving them people to manage.
- Ensure that people managers understand what performance management really is, and be held responsible for doing it.
The recent crisis has been a wake-up call for everyone across the world. The world is now preparing themselves to be more immune to such crisis and pandemic-like situations. And they are focusing on developing processes that will help them not only stay afloat but thrive.
This new performance management may appear to be complex, but in the words of Albert Einstein – “Everything should be made as simple as possible, but no simpler.”