Performance Management Is Changing Its Identity!
Big Changes Are No Longer Knocking at the Door; They Have Already Walked In!
Performance and goal-setting processes have been undergoing major change for some time, and recently that change has accelerated sharply. Let's look together, through a few questions, at the trends that stand out in performance management.
What did the old approach look like?
The "traditional approach," which we now really must leave behind, shaped goals, and therefore performance, for many years from a perspective that was "rule-bound" and "centered on the evaluator's opinion."
In this approach, which began with cascading goals and in which a person's goals were handed down from the top, individuals often had no say in or input on their own goals, or that influence remained extremely limited. In addition, models and performance management systems built around a "score-and-rating focus," in which feedback and one-on-one meetings happened once a year, or at most twice with mid-year reviews, have begun to lose both their relevance and their validity.
Models Built on Once-a-Year Meetings, Limited Feedback and a Focus on Ratings Are Becoming History!
All of us have experienced traditional performance approaches for many years in our corporate lives. For many years, we were all evaluated in one way or another under systems centered on the evaluator's opinion, rigidly bound by rules, and against goals that came down from the top instead of being living goals, that largely did not fit employees' day-to-day work practices and, more importantly, whose purpose was unclear.
The focus of these models was always the performance rating or score. Moreover, because this central focus then fed into other processes of great financial importance to the employee, such as pay, raises and bonuses, its sphere of influence kept growing, and it became the "single, and perhaps most frequently used, determining factor" for many other processes as well.
But we can now say that enough is enough. The classic performance approach is giving way to far more innovative, dynamic and democratic processes and perspectives. Let's now look at this perspective in broad strokes.
What do next-generation performance approaches involve, and which trends stand out?
Which points will we prioritize from now on when designing performance processes in companies?
A Culture of Continuous Feedback
Living Goals (Flexible Goal Management)
Short-Term Measurement
Greater Focus on Strengths
A Diminishing Impact on Pay
A Culture of Continuous Feedback
A culture in which all employees give and receive feedback throughout the year, continuously and in a timely manner yet independent of fixed times (24/7), on their performance, competencies, projects, communication, work management, productivity and so on, is among the top priorities of the new model. Foremost among these priorities is the idea that feedback is not a one-way process received only from the manager, that it can work in both directions as long as it is constructive and moves people forward, and that it will contribute greatly to the organization.
- Living Goals (Flexible Goal Management)
Living goals is a concept I use a great deal and emphasize heavily in my own training and consulting work. The question here is:
If Someone Were Watching Your Daily Work Routine, Could They Tell What You Are Working Toward and What Your Goals Are?
If your answer is yes, you are among the lucky minority. It means your goals are fed by your daily work processes and routines, so your work and your goals move forward in harmony. But believe me, processes are not this solid in every company.
This is the most important problem I see in companies. Our goals should always, without exception, arise from the work we do, our daily routines and the projects we run, and they should continue to be fed by them. If that is not the case, then unfortunately we cannot talk about "Living Goals." If our work, processes and projects go through changes, our goals must also change and be updated in parallel, independent of fixed times. Only then can we bring "Living Goals" to life in companies.
- Short-Term Measurement:
Short-term measurement is another of the trends that stand out, like "Flexible Goal Management."
Instead of measuring goals at year-end, measuring and reviewing them over shorter periods such as 3 or 6 months, and, if necessary and if they no longer serve our daily practice, changing them, updating them or removing them from our goals altogether, is among the things we must do. It is now time to let go of what does not serve us and say goodbye to it! The same goes for our goals, don't forget 😊
This is exactly what the OKR methodology is for. We won't go into detail here, since our blog has detailed posts on OKRs (What Are OKRs? and Measure What Matters). Anyone interested can take a look at those too.
- Greater Focus on Strengths:
For years, in performance review processes, we focused on developing the areas that came out as "open to development" through training. But from now on, the area we really need to focus on is "our strengths." Because the areas where we will make a difference for our companies, stand out and truly add value are the areas where we are already strong and good. Companies need to be aware of this for their employees and revisit all their designs accordingly. The next-generation performance approach already focuses on seeing employees' strengths more than their areas for development. Goal design, too, should challenge employees to a certain degree while also bringing out their strengths more.
So are we parking our development areas on the sidelines? Never. Of course we continue to develop them. But unlike before, "focusing only on areas for development and improving them" is now being set aside.
- The Strong Impact of Performance on Pay Will Gradually Diminish:
At its most basic, performance management is implemented in organizations for 2 purposes:
- To raise the value, products, services and so on created within the company to the highest possible level by taking employees, and therefore the company, to higher levels, and
- To increase employees' income, it is used as a tool that applies to everyone and is as fair and objective as possible in raise and bonus processes.
However, especially when it is used for this second purpose, even if it has been designed with the best of intentions and on objective criteria, it cannot escape the perception among employees that it is a "tool" that is "in the hands of, and in favor of, the organization," and this perception alone significantly shakes employees' trust and belief in performance management and in their goals. This, in turn, has a very negative effect on the whole process.
Yet when we remove goal and performance management processes from the position of "having an impact on pay, and in some cases and organizations even being the sole determining factor," or at least reduce this impact as much as possible in the early stages, all the blockages related to belief and trust in the system begin to dissolve on their own. Employees feel much safer and can focus more on their goals and on achieving them. Their view of their goals and KPIs changes for the better. As a result, the system can move forward much more effectively and much more true to its purpose, for both the individual and the organization.
But as we always say, implementing and experiencing these stages is not always easy, and it is worth being aware of this from the very beginning. Especially when making room for next-generation performance approaches in your own companies, it will always be helpful to keep your organization's realities and needs in mind and to design all processes accordingly.
With the wish that performance and goals become, far beyond being a tool or an end in themselves, lanterns that help all of us reach "our own best," keep us always on the move and, when necessary, light our way,
See you in the next post,
Wishing you healthy days.
