I despise the yearly performance management process.
Once a year, managers and leaders care enough about their employees’ goals
and development plans and must ceremonially record objectives in HR’s
performance management system. At a designated mid-year time, the alerts go
out to managers to complete their midyear review, and sometime toward the
end of the year, they complete a final evaluation.
Even worse is that behind closed doors, and often through a super-secret
process, leaders convey and debate who the high potentials, the “HiPos,” are
in the organization.
And then bonuses, raises, and promotions go through several rounds of
vetting. The results include tired managers and frustrated employees even in
the best of years. Don’t even get me started on how performance improvement
plans or “Pips” are instituted.
In a recent
Coffee with Digital Trailblazers
titled “Performance Management – What Needs to Change in Leading Agile and
Digital Transformation,” we chatted about why and how performance management
needs an overhaul.
5 issues with traditional performance management practices and systems
I teed up the conversation by pointing out these five ways that challenge
legacy performance practices.
-
We learned the importance of empathy over performance during the
pandemic, yet performance management systems rarely have room to express
individual circumstances. -
We drive agile practices focusing on multi-disciplinary team
collaboration and meeting short-term sprint commitments – yet performance
systems focus on individual goals. -
Leaders want data-driven decision-making, seek ongoing
experimentation, and want to learn from failure, yet these objectives are
hard to express, evaluate, and measure in traditional performance
management practices. -
The organization identifies digital transformation as a strategic
objective, yet performance management practices focus on
smart goals, often miss the realities of changing priories, and rarely address the
incentives required to embrace transformative change. -
Organizations struggle to hire and retain talent – even amid
layoffs and recession – because employees want space to innovate and the
opportunity to excel in hybrid work environments, while many leaders want
“butts in seats” management practices.
As of this writing, I’ve hosted sixteen episodes of
Coffee with Digital Trailblazers, and this episode had the highest attendance. Debate these points if you
want, but leaders,
Digital Trailblazers, and employees are frustrated. I believe now is the time to overhaul how
organizations think and implement performance management.
Digital Trailblazers recognize why performance management needs a
transformation
I am not the only Digital Trailblazer that feels that legacy performance
management practices undermine agile ways of working and digital
transformations.
“In many companies that have been in business for a few years, you will find
a middle management group that I refer to as the ‘layer of clay,’ and this
is where transformations go to die,” says Martin Davis, CIO and managing
partner at DUNELM Associates. “This group are experts at being seen to
support a new initiative while doing absolutely nothing because they know
that if they wait long enough, a new initiative will come along, and the
original one will be forgotten.”
Jeff Eissinger, VP of enterprise strategy and solutions at Comcast Cable,
also joined me on stage to share his perspectives around the issues with
yearly goal setting. “When measuring success, we must acknowledge that the
goalposts can move,” he said. “As business needs evolve, the definition of
success can change. Digital Transformations are a constant evolution; the
more you achieve, the more opportunity is unlocked. Success should not
always be a measure of completing the goal as originally stated, but whether
or not the work moved the organization closer to the overall vision the
company has for itself.”
Joanne Friedman, PhD., CEO, and Principal of smart manufacturing at
Connektedminds has joined me on stage at every Coffee with Digital
Trailblazers episode. “After more than a decade of consistently high failure
rates, enterprises that raise a white flag on digital transformation efforts
do so largely because they have failed to secure the workforce’s heart share
needed for success,” she says. “Why not flip the usual script and, instead
of starting with the technology and trying to fit people into it, do the
reverse?”
Separating people, performance, technology capabilities, and transformation
objectives is one reason many digital transformation efforts bump along and
sometimes grind to a halt. “Adopting human-centric design (HCD) means
starting with the needs of the people and designing the technology to meet
those needs,” says Joanne. “By taking a human-centered approach,
companies can create digital systems and processes that are more intuitive,
user-friendly, and ultimately more successful.”
How to transform your performance management process
In a recent post,
What are HR’s Important New Roles in Uplifting Digital Transformation, I urged CIOs to partner with CHROs on driving digital transformation and
culture change in their organizations. “It’s a big, strategic miss when CIOs
leave out HR or only request human resources to take on administrative
responsibilities and tactical assignments,” I say.
And when transforming performance management practices, I urge CHROs to
partner with
Digital Trailblazers, including CIOs, product management leaders, and data specialists.
That partnership will help transform traditional “waterfall” performance
management practices to ones that better align with agile collaborations and
digital transformation objectives. Here are two examples:
-
Consider that scrum teams use
sprint retrospectives
to discuss process improvements. Performance management plans should
include whether teams follow through on the recommendations and to what
extent they improve collaboration and help deliver better results. -
Vision statements
can serve as a point of dialog around how Digital Trailblazers and their
teams perform and respond to customer feedback. The goal is not to hold
people accountable to the original vision because we want teams to
question, experiment, and learn. Performance management processes should
review how well leaders collaborated with their teams and how effectively
they made scope, priority, and design decisions.
Therein lies the challenge because these evaluations can’t be performed once
or twice a year. These reviews can only happen if the organization’s
evaluation practices align with how teams operate, not as a separate and
disconnected yearly performance management process, as is the norm in most
businesses.
I will publish several other recommended performance management practices
that align with digital transformation and agile ways of working in a white
paper later this year. If you’re interested in an early preview, please use
this link to sign up for the Driving Digital Newsletter.
Please consider joining our discussions and learning insights during the
Coffee with Digital Trailblazers
that meets Fridays at 11 am ET. To sign up for the next event, please use
this link:
https://www.starcio.com/coffee/next-event.
