10 steps to fix performance management

We all agree that the current state of Performance Management no longer works inside of today’s modern organization. As a result, companies are eagerly looking for the next great solution that will help drive the results needed to remain competitive in a digital world. As we transition to a more digital workforce, an integrated Performance Management solution will become an important tool necessary to optimize team success. Designing these tools in the right way is critical to creating a culture that can attract and retain employees dedicated to reaching the full potential of your organization.

I recommend these ten critical steps to help optimize performance inside of your organization:

Step 1: Let employees own their performance data

The digital workforce has a very different perspective on how their personal information should be managed and exchanged. We must quickly put every employee in control of their own personal performance data using tools that allow this data to be portable, authentic, and secure. This transformation will be accelerated in response to the several highly publicized cases of consumer data misuse that are causing individuals to scrutinize how their data is managed and controlled across all digital platforms. Employees will then be able to grant data access to their employer or recruiter as they control their performance reputation throughout their career.

Step 2: Focus more on team success

Anna Tavis from NYU sums up the transition perfectly: “The big challenge for a lot of companies and for HR as a function is how we transition from a philosophy and a whole infrastructure we built around individuals to an environment where it’s about teams and collaboration.” Performance Management must direct their attention on team skills, team goals, and team performance to drive measurable business outcomes and retain valued employees. Developing team capabilities matters more than cultivating individual skills. 

Step 3: Connect the Performance Management tools together

Performance management software must create a synchronized solution that integrates learning, development, goals, performance, feedback, recognition, and analytics into an integrated platform that employees use to work better together as a team. Employees will never take the time to log into ten different applications to perform each of these different tasks. These activities are all connected and the Performance Management platform must also be connected.

Step 4: Make all summary data transparent across an organization

Transparency is the foundation needed to create an equitable and trusting work culture. All aggregated data must become transparent across every organization so that everyone can understand how they impact the overall success of their team and organization. Allowing complete transparency will reinforce team behaviors that ultimately deliver better results for everyone as they collaborate together. 

Unconscious bias is created when a limited number of people get involved in reviewing individual performance. We must get everyone involved in creating and evaluating feedback to be able to create a more holistic picture of performance inside of an organization

Step 5: Make your performance reputation transferable

Successful next-generation Performance Management requires revisiting fundamental assumptions that no longer exist within today's workforce. Nobody expects to remain employed within the same organization for the duration of their career. Younger employees expect to work for ten or more different employers. It no longer makes sense that your performance data is deleted every time you move to a new organization. Creating platforms where workers have a reason to maintain their data and own their careers will help workers actively manage their career development to ensure long-term employment.

Step 6: Create a common performance vocabulary

Business literature has created a unique vocabulary for all of the different components of employee Performance Management. When HR professionals discuss strengths, we use terms like ENFP, or 7426, or Woo/Achiever, or Guardians in Business Chemistry. When we discuss goals, we use terms like MBOs, OKRs, or Key Performance Indicators. There is also a separate vocabulary for learning, for personal development, and for employee recognition programs. These different components of Performance Management must all be connected together using a common performance vocabulary that everyone understands and can be universally transferred from one organization to the next.

Step 7: Connect performance goals to personal and team goals

Most companies only focus their goal setting activities on individual achievement goals related to business outcomes such as hitting sales targets, customer satisfaction targets, or output goals. Organizations need to also include three additional types of goals and connect them all together using a common performance vocabulary just mentioned. The three additional goal types include team achievement goals, personal development goals, and personal wellbeing goals. Employees should control the creation and exposure of goals in all four categories, so that co-workers can understand and support each other as they accomplish these different, yet connected, types of goals. 

Step 8: Get everyone involved in coaching and mentoring

Unconscious bias is created when a limited number of people get involved in reviewing individual performance. We must get everyone involved in creating and evaluating feedback to be able to create a more holistic picture of performance inside of an organization. Technology now allows us to automate the collection of feedback from peers, teams, direct reports, internal stakeholders, and even external stakeholders at regular intervals across your organization.

Step 9: Design tools like a consumer experience

Performance Management technology should deliver an experience similar to the consumer experience people get using tools such as Netflix, Facebook, or Amazon. Unfortunately, most of the existing tools in the market have been designed as an enterprise solution to deliver the data and reporting for business leaders who want to know about their workforce. These tools must be designed to help teams work more productively together, help individuals manage their career development, and help organizations to create a better work culture using an interface that is more similar to Instagram or Twitter.

Step 10: Create value and benefit for everyone participating

Many companies are finally starting to realize that their current Performance Management process does not work, and is even counterproductive in trying to deliver better performance in an organization. We must design new solutions that create value for everyone involved, so that every participant has both an intrinsic and extrinsic motivation to accurately create and confirm performance related activities. Performance Management needs to feel more like an incentive program that optimizes team success and less like a babysitting service that HR is dictating across your organization. 

Performance Management must direct their attention on team skills, team goals, and team performance to drive measurable business outcomes and retain valued employees