As companies continue to grapple with finding an effective performance management solution, HR leaders are searching new ways to re-imagine the performance process. HR leaders shared current issues with managing performance and potential new directions for the future at a recent ChapmanCG roundtable co-hosted by Michiel van Duin and Niti Khosla at Novartis in Basel, Switzerland.
Reframing Performance
Changes to CEOs, management teams or business strategy are helping to provide the opportunity for HR leaders to drive initiatives to challenge the status quo and transform the performance management process. Current processes often tend to be viewed as an onerous, box-ticking exercise connected with dread and fear, so one of the main objectives for HR leaders is to remove the negative connotations from performance management and bring additional value to the process. While some organisations have toyed with letting go of performance management entirely, most still see it as an important requirement that needs to be done in a new way to bring out the best in employees.
Improving Employee Experience
Some organisations are looking to improve performance management by moving towards a mindset that considers the employee experience from recruitment stage right through to employee exit to help better tailor the experience. Current systems typically include a complicated and wide-ranging rating scale, with no clear link between individual performance and variable pay, so organisations are also looking to provide more transparency and simplicity on how performance is measured and how that translates back to linked incentives.
Changing Requirements for Calibration
Calibration of ratings against a distribution curve can break team spirit by forcing inaccurate fit ratings. This can also encourage team leaders to keep underperformers in their teams and perpetuate the perception that performance ratings are disconnected to merit overall, resulting in a scenario where people may not be engaged to their full potential. To address this problem, some companies are removing calibration and enabling a flexible distribution curve.
Measuring Success
To ensure that the objectives for change have been met or resolved, it is critical that changes made to the performance process are tested for success. It is important to question whether the changes ultimately deliver better results for the organisation's objectives, and if the advantages of the change do in fact outweigh the disadvantages. Some organisations are moving towards agile and continuous performance management. Regular check-ins with employees using pulse surveys and other methods can help to monitor whether these are proving successful.
Personalisation and Modernisation
HR leaders discussed the need to move towards a more personalised and modern model of performance management. In the age of social media, would efforts to bring performance management more in line with today's way of expressing real-time approval - such as the use of emojis instead of numerical ratings - work better? A more radical approach could include crowdsourcing feedback from all employees who engage with an employee, however this creates a number of challenges around administration and dealing with negative feedback in a diplomatic way.
Cultural and Generational Factors
The younger generation are typically more comfortable and accepting of continuous feedback compared to more mature and seasoned staffers. Global one-size-fits-all solutions ignore cultural differences in how certain groups provide and deal with receiving feedback, but more local and regional solutions make it harder to consistently report at a global or group level.
Letting Go and Trusting
At the end of the day, HR leaders need to enable and empower other leaders within the business by reducing the traditional HR policing approach and trusting that managers can handle performance with the right training and coaching. A big thank you to our presenter Sally Henderson from Zurich Insurance, as well as the representatives from ABB, Barry Callebaut, Carlsberg, Ecolab, LafargeHolcim, Novo Nordisk, Octapharma, Oxfam International, PricewaterhouseCoopers, SR Technics, Straumann, Swiss Re, Anheuser-Busch InBev and Zurich who joined us for this roundtable. Subscribe to our newsletter here to read more from our ChapmanCG HR executive search leadership team.
