As we continue to move deeper into the performance management revolution, more and more companies are following in the footsteps of Deloitte, GE, and others who have overhauled their approach.
No longer is the annual review the sole form of performance management organizations use to develop their employees. This once-a-year appraisal system proved to be biased, too focused on past mistakes instead of future improvement, and a source of stress for managers and employees alike.
Most importantly, it failed to achieve its very purpose: to manage, and thus improve, employee performance.
Guest post from Zorian Rotenberg, CEO of Atiim.
Nowadays, forward-thinking organizations use modern, ongoing performance management instead. Here are a few key strategies you can use to optimize your performance management system:
1. Set Clear, Measurable Goals
Teams can’t perform well unless they know exactly where to focus their efforts. They must have a precise idea of what’s expected of them so they understand what constitutes great performance.
Likewise, having clear goals will help managers track and measure performance, and step in to course-correct with specific, targeted coaching as needed. To consistently set measurable goals, companies have long relied on SMART goal setting (specific, measurable, aligned, relevant, and time-bound). Today, an OKR approach (Objectives and Key Results) is preferred by companies like Google when it comes to setting collaborative, shared goals that align with top company priorities.
2. Create an Ongoing Feedback Loop
Modern performance management is built on the concept that, in order to give an employee the opportunity to succeed, guidance and feedback must be provided by managers in a timely fashion. When an employee is told during their annual review that they underperformed months ago, the feedback is irrelevant and demotivating. It’s much more effective to give employees constructive guidance (and, just as importantly, praise) as soon as possible.
To support an ongoing exchange of feedback, many organizations are implementing tools like pulse surveys, allowing managers and their teams to maintain an open dialogue about expectations and performance. Leading companies also encourage managers to hold weekly check-ins with their teams, which brings us to our next point.
3. Use Frequent Check-Ins
One-on-one meetings, also commonly referred to as “check-ins,” were recently voted the number one business management practice of all time. These brief yet powerful meetings are held weekly between managers and each one of their employees to give everyone the chance to get clarity on recent successes or challenges, as well as on priorities for the week ahead.
It may seem time-consuming for managers to hold weekly meetings with their employees, but the practice actually winds up saving managers dozens of hours they’d otherwise spend putting out fires. This proactive technique helps maintain focus on and alignment with top company priorities.
It also builds loyalty between managers and their direct reports by signaling to employees that their managers are giving them every opportunity to excel.
4. Train Managers on Giving Feedback
Ongoing performance management is only as effective as the feedback managers give their employees. If managers aren’t on board with this approach, you’ll fall into the same pattern you did when you relied exclusively on yearly appraisals: employees will lack clarity and direction, and the feedback they receive during the annual review process will either be surprising, ineffective, or both.
Encourage managers to provide timely, specific feedback to their employees. When managers give constructive advice to help their teams improve, it should be clear and actionable. For instance, saying an employee needs to improve his or her time management skills is too vague; instead, have managers describe the specific problem (being late to meetings, failing to meet deadlines, etc.) so the employee understands what needs to be done to improve.
5. Reconsider the Annual Review
While there are real problems with the annual review process, many companies still need a way to formally document employee performance. If this applies to your company, there’s no need to jettison yearly appraisals entirely.
Frankly, annual appraisals are mainly ineffective when they serve as the only form of performance management. When used in conjunction with ongoing feedback, however, they can actually be quite effective. In fact, in such a scenario, formal reviews become hassle-free, strategic sessions. Since managers and employees have been discussing performance on an ongoing basis, there won’t be any surprises when it’s time to have a formal discussion.
Finally, the annual review provides an ideal opportunity for managers and employees to collaborate on development plans. During subsequent check-ins, managers and employees can hold each other accountable, making sure the necessary actions are being completed to keep the employee development on track.
The critical point is this: Ongoing performance management starts with goals. If goals are unclear or impossible to measure, your employees won’t have any clear expectations to live up to or clear objectives to meet. As a result, managers won’t be able to have insightful conversations about performance with their team members.
Once clear, measurable goals are set and an ongoing feedback loop is created, on the other hand, managers can communicate in a way that supports personal development and drives better overall performance.
Zorian Rotenberg is CEO of Atiim Inc. (i.e., A-team), a SaaS company that makes sales and marketing teams more productive. Previously he was VP of Sales & Marketing at InsightSquared and has been a speaker at many industry conferences, including the American Association of Inside Sales Professionals (AA-ISP). He has also contributed to WSJ Accelerators Blog, Top Sales World Magazine, and the Salesforce.com Blog, among others. Zorian holds an MBA from Harvard Business School.