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Grappling with performance:
how organisations are
changing their approach
Peter Reilly, Principal Associate, IES
For further information contact:[email protected]
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Performance management emphasis
Organisational
Individual
Performance
Focus
Performance Management Mode
Performance Appraisal Corporate Assessment
Audits
KPIs
External measures
Performance frameworks
Scorecards
Performance dialogue
PDPs
Multi rater feedback
Organisational goal setting
Outcome targets
Business measures
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Performance management emphasis
Organisational
Individual
Performance
Focus
Performance Management Mode
Performance Appraisal Corporate Assessment
Audits
KPIs
External measures
Performance frameworks
Performance dialogue
PDPs
Organisational goal setting
Outcome targets
Business measuresGo
lden
thre
ad
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It depends on who you ask….
Leaders – performance improvement?
HR – administrative purposes?
Users
• Managers – focus, motivation…..
• Employees – feedback, development……
What is the purpose of performance
management?
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And the benefits? Potential impact….
Objective-
setting
Feedback
Assessment
Development
planning
Work focus &
design
Relationships
Money
Coaching &
training
Career moves
Ability
via skill and career development
Motivation
potentially via every component
Opportunity
via work focus and design, and career
THE AGENDA MAY AFFECT PERFORMANCE FACTORS
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0
20
40
60
80
100
120
Low High
Sophistication of HR Practices
Mo
rta
lity
HR management and performance in the
National Health Service
Source: West et al
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1. % new recruits tested
2. % appointments with person specification
3. % jobs covered by succession plan
4. % PDP
5. % CDP
6. % degrees
7. % manager leavers
8. % staff profit-pay
9. % appraised
10. Frequency 1:1s
11. Who decides pace
12. Who decides tasks
Top measures link people to performance
Source: Tamkin et al, 2006, IES
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Performance management a key HR process
but not always an effective one
Seen as core HR process that operates through a best practice appraisal system
HR not always sure it is effective(CIPD 62% of HR people felt managers thought it was useful)
HR tends to think managers are not trying hard enough to do performance management ‘properly’
Researchers see it as potentially, but not actually, a means of motivating employees
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Performance appraisal is a necessary
element of organisational life. It has the
potential to improve performance as long
as it is part of a wider package of people
management practices. The practices
which motivate people to perform include
goal-setting, on-the-job learning and
development, and regular feedback. Good
job design is also important. Unfortunately
this cluster of practices is rarely well
implemented.
Source: Professor David Guest
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Is performance management
meeting these goals…
…in your organisation?
If not, what are you doing
to change things?
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Unclear purpose, insufficiently linked to business performance
Overloaded – trying to hit too many needs
Challenges in performance management
meeting these goals
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Performance management: the overfull suitcase (Hirsh, 2011)
competencies
values
360 feedback
Feedback
DevelopmentObjectives
Ranking
Forced
distributions
Moderating
ratingrecognition
1:1sPDP
CareerPotential
& talent
Poor
performers
leadership
‘difficult’
conversations
pay
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Unclear purpose, insufficiently linked to business performance
Overloaded – trying to hit too many needs
Lack of line ownership – meeting HR target
Compliance not conversation
Complex, bureaucratic process
Backward not forward looking
Too dominated by a 'best practice' model
And linked conventions (eg SMART objectives)
Challenges in performance management
meeting these goals
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An appraisal of appraisals (1)
For managers, it was time consuming
and not adding value. For HR, it was a
high administrative burden. For the
employee, it was a disengaging
conversation around a numerical
rating.
Claire Ainscough, VP HR, Expedia
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An appraisal of appraisals (2)
A process-driven business system
where the correct completion of the
process has become more important
than triggering action that develops
individuals and so improves
organisational performance
A review from a Scottish public sector organisation
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Developments in
performance management
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Challenge
Corporate & personal needs are passing ships
Developments in performance
management
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Optimum process of performance management
(in a knowledge/professional organisation)
External environment
External environment
Common organisational
goals and priorities
Leadership of people
and organisation
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Actual process
External environment
Corporate
goals
Performance
measures
Professionals
priorities
Professional
purpose
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Challenge
Corporate & personal needs are passing ships
Too low touch
Ill judged competencies
Safe conversations?
PRP is not delivering
Ratings for motivation not performance
Accuracy of 360 inputs depends on their use
Lack of job knowledge is inhibiting assessment quality
One model but different needs
Developments in performance
management
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63
40
30
22
21
Not true indicator of
performance
Single point of view
Feel undervalued
Does n't account for past
work
Demeaning
Top five reasons why people dislike
performance reviews
Source: Globeforce/SHRM Survey, 2013
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Challenge
Corporate & personal needs are passing ships
Too low touch
Ill judged competencies
Safe conversations?
PRP is not delivering
Ratings for motivation not performance
Accuracy of 360 inputs depends on their use
Lack of job knowledge is inhibiting assessment quality
One model but different needs
Improvements
Golden thread
E-enabled
Process standardisation
Continuous not one-off process
Positive psychology
Underpinning values
Multi-source feedback
Removal of ratings
Segmentation
Developments in performance
management
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Some companies are strengthening mechanical
approach but trying to make it tough, clear and
quick (eg Yahoo, Shell, Tesco)
Some are trying to make it less mechanical eg
more conversational, less paperwork/reporting,
dropping rating/ranking (eg Deloitte, Microsoft,
Adobe, Gap, Accenture)
Some shared ideas, some differences
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A typical approach to change
(adapted from Connect Education & Care)
Annual
paper
exercise
Technology
facilitated.
Performance
goals set.
Ratings given.
What and how
assessed.
Values
introduced.
Ratings bar
raised.
Employee self
assessment to
encourage
ownership.
Continuous
discussions.
Reduced
emphasis on
annual rating.
Future
? Ratings
? Potential
? Flexibility
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Improvement versus measurement
The tension is not so much between performance and
development as some have suggested…more between:
Improving performance – focus on individual and their
contribution to the business – looking forwards, action-
oriented
versus
Performance measurement and recording (evaluative
purposes) – focus on comparing employees – looking
backwards – dominated by recording
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Broad performance management approaches
Employee initiatedConversational
Frequent Little to no paperwork
Adaptable structure Appreciative and coaching
Strengths and developmentBottom up targets
Standard processAnnual event
Form to completeManager controlled
Evaluative, judgementalStrengths and weaknesses
Top down targetsversus
Talent management
Reward
Capability procedures
Talent management
Reward
Capability procedures
Third party
feedback
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Real change?
I see too many companies saying 'we got rid
of reviews. Aren’t we wonderful?' without
changing the politics so
people feel comfortable
speaking their minds.
Simon Culbert, Author ‘Get rid of the performance review’
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Move away from a backward-looking annual scheme
Build a foundation for staff to develop their performance to best achieve their potential (to deliver better services)
Get rid of the existing 5-point rating scale
Introduce a system where all staff who are performing well are recognised with an annual pay increase
All staff have the opportunity for more instant financial reward throughout the year, as close as possible to the point of their contribution
Facilitate a continuous conversation with our staff
Shift to more coaching style discussions.
Move towards more staff involvement in service planning
Think about ‘the whole job’, also moving away from bureaucracy of SMART objectives towards general priorities
Principles, hints and tips rather than detailed guidance
Retain robust approach to managing underperformance but introduce new ‘fork in the road’ for managed exits
Camden Council’s new approach to PM
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• Employee driving the process with manager as facilitator? Part of reshaping the manager as coach (Medtronic)
• Role of self assessment with peer (crowd sourced) assessment? (Google)
• Team appraisals to emphasise collaboration (Microsoft)
• Learning/reflective logs to help continuous management process? (Rolls Royce)
• Evaluation of performance assessment effectiveness • satisfaction with process
• impact of activity
• actually happening (Adobe)
Other thoughts to consider
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Final words
We need to elevate our
conversations about performance
management with our customers to
focus on all the drivers of
organisational performance, avoid
the temptation to process tinker,
'tool up' and then trust our
colleagues to hold the right
conversations at the right time
Paul Macfarlane, HR Director Utilities and FM at Amey
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www.employment-studies.co.ukwww.employment-studies.co.uk
Thank you