Continuous Performance Management -
and how to get started?

Performance Management is now often seen as an outdated, time-consuming process that is no longer fit for purpose.

 

In response, many organisations have sought to create more flexible, employee-centred practices which focus on helping people perform at their best – rather than filling in endless forms.

 

A survey conducted by Mercer in 2013 showed that: 95% of organisations set individual end of year performance rating. Those figures are likely to be reducing, but the reality is that most companies have – and will need to continue to have – some form of performance review process.

 

The current publicised trend is a movement away from traditional, rating form-based and ranking systems to a more fluid, conversation-based, flexible and individual approach to managing performance.

 

However, many organisations have found it difficult to take a less structured, less form-driven approach to performance review for a range of reasons; some of them very sound ones, others less so. Legacy, HR’s perception of line managers and inertia can prevent an organisation from making sweeping changes to core talent management practices, but we should be heartened by the stories from organisations such as Microsoft, which had long evangelised about the benefits of its approach to performance management in which employee performance is judged relative to your peers.

 

The management research firm CEB reports that in the US, 6% of Fortune 500 companies have disbanded their ranking system.  Accenture has stopped stop using its annual evaluation and ranking process because the paperwork was time-consuming and the process was a source of general frustration for everyone.  Its new system will see employees receiving more timely, ongoing feedback from their line managers following a project or assignment. 

 

Deloitte is piloting a similar approach, where performance evaluation is done on an incremental basis throughout the year, rating scales have become four simple questions with ‘yes/no’ answers and the forced ranking approach has been removed.

 

Business Psychologists and HR practitioners have extolled the virtues of performance management that extends beyond the end of year review: which requires frequent updates, ongoing feedback, regular discussions about performance and rapid response to performance problems.

 

This also reflects the approach that we, at Head Light, have championed for many years. The features and functionality within our software is designed to enable our customers to take a personalised, flexible and continuous approach to managing performance.  It’s about driving performance conversations and not driving performance ratings.

 

The pressure is on
In many organisations, however, there is still too much emphasis on one point in time, a clash with the demands of the financial year end, an over-reliance on memory and guesswork and still far too much paper flying about.  The bulk of the work and the responsibility for performance management also still rests on the shoulders of line managers.  Whilst it is important to emphasise the role of the manager in delivering results through others, there is a good argument for getting individuals to take more ownership of their own objectives, reviews, feedback, performance and career.  Enabling people to contribute to and be engaged in this process has many benefits, but a good system is needed to support this.  If you get this bit right, a manager’s role can be more facilitative, enabling, coaching and supportive rather than judgemental, autocratic and directive.
 
So, Continuous Performance Management is defined as being:

 

 

In the next chapter we'll look at this, and how it might help organisations – and the people in them – to get more out of performance review.