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Moving to Agile Performance Management
A recent article in the Harvard Business Review about how Deloitte redesigned their Performance Management Review process raised some interesting points. While this blog does not fully reflect the full article on “Reinventing Performance Management” in the Harvard Business Review the article gives rise to some interesting questions.
Deloitte are quoted as saying that one of the reasons for the redesign was. “Like many other companies, we realize that our current process for evaluating the work of our people—and then training them, promoting them, and paying them accordingly—is increasingly out of step with our objectives.”
They further went on to say that in a public survey they conducted “more than half the executives questioned (58%) believe that their current performance management approach drives neither employee engagement nor high performance.”
What they felt was needed was “something nimbler, real-time, and more individualized—something squarely focused on fuelling performance in the future rather than assessing it in the past.”
They found that “Once-a-year goals are too “batched” for a real-time world, and conversations about year-end ratings are generally less valuable than conversations conducted in the moment about actual performance.”
When they assessed the number of hours spent on performance management they found close to 2 million hours for 65,000 employees. That works out to about 30 hours per year per person.
What was needed was a shift “from a focus on the past to a focus on the future.”
While the report goes on beyond this I feel that there are some significant lessons.
Smaller organisations do not have or cannot afford to dedicate the time and money that Deloitte did to Performance Management.
So is Performance Management broken?
The short answer is no. The key lesson from this article is that Performance Management while it should review and evaluate past performance it should be firmly focused improving future performance.
How we improve performance? We should accept that any assessment of past performance is only of value if it leads to an improved performance in the future.
Annual performance reviews are by their nature, time intensive, because they need to review a full year’s work. This need, to set aside sufficient time to do this, creates a barrier to doing this and doing it well. I can say from personal experience that the performance conversation can easily become skewed towards the past and not leave adequate time to discuss future challenges.
Research has shown that more regular reviews over shorter time frames are more useful. They take up less time as they are reviewing a shorter more immediate time period and can be more focused on future performance. The shorter time period makes them more agile as performance targets are better able to reflect the current business needs.
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