It’s that time of year! As end-of-year reviews approach, many employees are asking, “How do I fill out this review when my goals aren’t really relevant anymore?” Managers, too, are asking, “How do I evaluate this employee accurately if I am not familiar with their day-to-day work?” Unfortunately, the discomfort at answering these questions is proof of a larger trend.
Today, only 14% of employees strongly agree that the performance reviews they receive inspire them to improve. Even more concerning, as shown in a McKinsey survey, half of the executives surveyed said their evaluation and feedback systems have no impact on performance; some said they even have a negative effect — yikes! Ironically, traditional performance management practices fail to drive performance — they demotivate people, fail to account for the employee’s opinion, involve bias, and undermine collaboration and teamwork. If you don’t tackle the tough questions of what performance management is doing for you — how it does or does not support employees to achieve outcomes and how to recognize that achievement and effort — you will be unprepared to deal with future market upheavals.
Luckily, we published our report, A Performance Management Evolution Is Critical To Employee And Employer Success, that outlines the damage outdated and disconnected performance management programs have on employee and organization success and illustrates how continuous performance development (CPD) programs are solving these problems.
By taking a whole-person approach to performance management and increasing the interaction between people about their work, CPD creates greater opportunities to improve and iterate, ultimately driving better performance. CPD programs allow managers and employees to track progress against goals and KPIs, get feedback from peers, discuss productivity challenges, coach for better performance, and recognize achievement. The most effective CPD practices are routed in the science of engagement, motivation, and positive psychology. They are adaptive and role-relevant when setting goals, they are aware of and tackle bias, and they take a more complete, accurate picture of the employee by pulling in data and taking into consideration their work across the organization. Some CPD programs go even further and offer embedded trainings to guide managers in having difficult conversations, tools and tips to help avoid bias, and alerts to remind managers to check in with employees.
But even if you know that CPD is the solution you need, how do you actually get started?
Don’t toss out your entire practice of measuring and analyzing performance in a panic. A CPD practice can live alongside elements of a traditional performance management process. At Forrester, we are here to help. We have come up with a few key tips that will make you successful in transitioning to CPD. Here is a sneak peek:
- Create a culture of recognition and strengths. Trust and psychological safety are important here. Create a culture of positivity, gratitude, and recognition for the whole person.
- Design your practice to reflect the organization’s unique values. The best performance development approaches reflect company values in the practice design itself.
- Enable and empower your managers to coach. Provide managers with the tools and support to adequately coach their employees and provide actionable, unbiased feedback.
- Be intentional to mitigate bias. Only 30% of employees believe their managers are fair in performance evaluations. CPD requires frequent conversations and keeps track of feedback over time to mitigate temporal biases, by design.
In an age of talent shortage and the “great resignation,” businesses now more than ever need to find ways to ensure that their employees feel engaged and empowered. A CPD practice will help, but CPD is unique to your organization and is up to you to configure. To learn more about lessons learned and to see examples of companies that have effectively implemented CPD, clients can read our report here. If you are looking to evolve your performance management process or are already using a CPD approach, I would love to speak with you!