So often, performance management programmes are treated as box-ticking exercises that leave employees unable to make the connection between their day-to-day activities and the overall corporate objectives. Warns Susy Roberts, Co-founder of Hunter Roberts.
If organisations are really serious about turning business objectives into commercial results, it’s time for a more strategic, goal-oriented approach to PM. But the most important ingredient is authenticity and not paying lip-service to this fundamental facet of HR.
Look around any organisation today and you will see that people are very busy and pressurised. In a difficult economic climate, organisations are struggling to deliver better results with fewer resources. As a result, their employees are permanently at full stretch, struggling with a myriad of tasks and trying to keep both clients and their managers happy. The question many organisations fail to ask themselves, however, is whether their people are busy and focused on doing the right things? There’s no doubt that organisations have the best intentions when it comes to performance management. Often, they have sophisticated, technology-driven processes that ensure performance reviews take place, skills gaps are highlighted and development needs are documented.
The reality, however, is that these processes are often little more than box-ticking exercises. Managers frequently set generic, inappropriate goals that bear little or no relation to the overall commercial and strategic objectives of the business. As a result, employees have no clear line of sight between their daily activities and the bottom line. They do what they think is right, or what they’ve always done in the past, because no-one has explained to them what’s really important and what they might need to do differently to do a good job. In our experience most people come to work wanting to add value in their role. When it comes to the annual performance review, managers often ‘sign off’ on the paperwork, even if performance has been below par. They shy away from difficult conversations that should really take place if an individual hasn’t come up to scratch because they don’t have the skills and confidence to deal with the situation in a firm but fair manner. The problem is that these poor performance management practices add up to a huge cost for the organisation. The business fails to meet its targets – or doesn’t perform to its full potential – because it hasn’t found a way to make its high level strategy come to life on the ground. my experience of helping organisations improve business performance, critical to success is properly aligning the workforce to the corporate objectives of the organisation by focusing on the following five key principles: Organisations will only be able to make the shift to a more robust style of performance management if there is clarity about goals at the very top of the business. Senior leaders often spend hours locked away in boardrooms, brainstorming long lists of goals. The problem is that these goals are often focused around activities (what the business is going to do) rather than results (what it is going to achieve). The key to making the shift from not just trying to deliver, but actually delivering, is for the top team to get a clear focus on the three to five key priorities that will make a real difference to the bottom line. There also needs to be close collaboration between divisional leaders, so that the goals they set for their areas of responsibility are aligned to the overall business objective and all heading in the same direction.
Experience has shown that it is not uncommon, for example, for departments to have as many as 25 different goals for their area, or for the financial targets for each division in the company to total less than the overall business target that has been set. An external perspective can often help the top team refine these high-level goals and come to a joint understanding about what is really important. Once the top team is really clear about the things that will make a difference to the business going forward, it needs to begin the process of translating its priorities into meaningful goals for the rest of the organisation. A clear message needs to go out that responsibility for achieving financial targets cannot rest solely with the CEO or senior leadership team. Everyone in the business needs to be crystal clear about the part they have to play and to make a personal commitment to delivering. Middle managers are a vital cog in this process. If they are not clear about their role in delivering the business plan they will not be able to convey priorities accurately to their team. The further down the leadership of an organisation you go, the harder it becomes for people to relate to high-level goals. Middle managers need the skills to set meaningful goals for themselves, but also to translate these goals into individual commitments for each and every one of their team. They need to use their communication and influencing skills to encourage the people who report to them to take ownership of their personal goals and to commit to making them happen. This doesn’t always come easily to line managers and HR has an important role to play in facilitating helping them make the transition whilst not playing the role of “Policeman”.
Formal training sessions can of course help managers learn how to set tighter, sharper goals, but the shift to a results-focused culture doesn’t happen overnight and HR will need to provide continuing support to line managers. It’s also important to recognise that this more robust style of performance management will not sit comfortably with some line managers. They may have had a tendency in the past to shove poor performance under the carpet, because it’s easier than having what could turn out to be a challenging conversation. They might also be concerned that if they are too tough with people they will alienate them. In fact, the opposite is true. Most people are much happier if they are clear about what their manager wants them to do and they will be much more motivated to go the extra mile if they can see their efforts are making a real difference to the business.
Role plays are a tool we’ve found to be particularly powerful when it comes to helping managers ‘practice’ these difficult conversations so that they have the confidence to deal with them when they arise. Of course if the business is going to hold people more strongly to account, it needs to make sure it is setting its employees up for success. The annual performance review is not enough on its own. Managers need to be having frequent conversations with their team to keep them focused on their personal objectives. Feedback needs to take place on a regular basis, both formally and informally, so that people have an on-going sense of how they are performing against targets and what they might need to do differently.
Everyone needs to understand that they have committed to a goal and to delivering the results. So if Plan A isn’t working, they need to move to Plan B. If there is an open, on-going dialogue between managers and their teams there is less chance of any nasty surprises at the end of the year. People will have had the time and space to change tack if necessary and to call on the support of their manager if they are struggling to deliver. Managers need to come to the realisation that they can’t let people off the hook. Someone may well be working really hard, but if they are not delivering the results then there is a problem and it does need to be addressed. The final piece of the jigsaw is to really embed this results-driven approach. Organisations must recognise that it’s an ongoing process, not an overnight fix.
A clear focus on goals needs to become an integral part of ‘the way we do things around here’ and a natural way for managers to work with their teams. Some organisations have found a good way to maintain focus is to integrate this strategic approach to performance management into their leadership development programmes on an on-going basis. This keeps the issue clearly on the agenda of the top talent who will steer the business going forward. The communication that goes out to the business, whether its driven by HR or the internal communications team, also needs to reflect the organisation’s focus on a goal-oriented approach wherever possible. Companies who are successful in sustaining this approach will soon find themselves reaping the rewards. The organisations we’ve worked with report not just improved financial results, but a significant increase in employee engagement and measurable upturns in customer satisfaction. Ultimately, most employees come to work keen to do a good job and only fail to do so when there is a lack of clarity about what’s expected, or the training and support required to deliver this is lacking. By putting in place effective performance management processes, giving people a clear sense of direction and purpose and the framework to keep themselves on track, Line Managers supported by HR will measurably improve performance, employee engagement and motivation levels.
