Are you looking to revolutionise and modernise your performance management process? To inspire you on how to change your processes for the better, we’ve outlined our favourite examples of agile organisations.
Times change — and so do performance management systems. Modern, forward-thinking organisations understand the need to adapt processes and incorporate performance management trends to remain competitive. What’s clear is the old-fashioned view of performance management (think performance ratings, yearly appraisals and stack-ranking) is falling out of favour. More and more, companies are transitioning to a more agile performance management system and have reaped the rewards in terms of productivity, employee engagement and morale.
We’re not going to lie. Organisational change is hard — it can take a lot of work. But shaking up your performance management system and making it more agile will ultimately result in improved performance and productivity for your company and employees.
Here we’ll discuss five dynamic, agile companies, exploring how they made their organisations more agile and how this agility benefited them.
What Is an Agile Organisation?
An agile organisation is a company that responds quickly to changes in the marketplace and workplace trends. Such companies are aware that organisational change is inevitable and so regularly examine their practices and processes to ensure they are conducive to optimal employee engagement, morale and performance. An agile organisation reacts successfully and swiftly to new competitors — they are innovative and are constantly challenging themselves to advance, respond and adjust.
Trademarks of Agile Organisations
There are five characteristics of agile organisations that distinguish them from more traditional companies in terms of management and outlook. Generally speaking, agile organisations are more goal-centric, they have ongoing performance conversations rather than single annual performance appraisals and they are forward-looking at all times.
More specifically, you can gain a fuller appreciation of an agile organisation from the five characteristics below:
- Agile organisations have a shared purpose and vision. They are flexible regarding resource allocation and in terms of strategy, they can sense and seize opportunities, which gives them an edge competitively.
- Agile organisations generally have a flat company structure. They have hands-on managers, all roles are clearly defined and employees are empowered to fulfil their purpose.
- Agile organisations are dedicated to transparency and continuous learning. They have a “fail fast” attitude, meaning they are open to experimentation. Even if these experiments fail, they still represent valuable learning opportunities.
- Agile organisations encourage role mobility and entrepreneurial drive. Engaged employees want to delve into the company and help where they can. Agile businesses encourage this thinking and drive.
- Importantly, agile organisations prioritise effective, user-friendly technology that facilitates decision making, communication and feedback.
Related Article: What’s the purpose of performance management?
Examples of Agile Organisations
1. Clydesdale and Yorkshire Bank (CYBG)
Following an internal consultation process, Clydesdale and Yorkshire bank came to the conclusion their performance management process was all process and no purpose — it was all about ratings and they saw no real improvements in terms of performance.
As Francis Lake, Head of Organisational Development at CYBG, states,“Our performance management was quite process focused and we knew we needed to make changes to ensure there was continued improvement in performance and our staff were motivated and engaged in their career development.”
CYBG decided to implement an agile continuous feedback programme, supported by Clear Review performance management software.
Understandably, there was a great deal of fear about entering into something new, but CYBG had been using the old system for more than a decade and not seeing the desired results. CYBG’s new system began with simple, regular check-ins between manager and employee alongside real-time feedback — no more scorecards or time-consuming forms. Teams agree on a set of important goals they are going to deliver over the quarter and each employee sets two personal development goals to focus on in the next three months.
Francis said that the new process is markedly simpler in terms of approach, process and language used. On top of this, after just three months, the company saw promising results. When everyone was working towards the same company and team goals, they achieved more objectives and there was an improvement in terms of teamwork and performance across the company. As Francis puts it:
“Our performance management approach is now focused on encouraging feedback conversations, creating stretch and improved teamwork. The technology is also giving us insight to drive more change and provide the foundations for good management.”
2. General Electric
General Electric famously underwent a performance management overhaul in 2015, paving the way for other global companies to do the same. After years of the annual performance reviews and their notorious rank-and-yank performance ratings system (which meant ranking their employees and regularly eliminating the bottom 10%), GE decided they needed to refresh their performance management system. The rankings system was the first to go, but the annual appraisals remained for a decade longer. Now, they are an agile organisation that has seen substantial improvements.
The new system relies on managers guiding and coaching employees to achieve their goals, and they work under a much less rigid framework. GE also decided to incorporate the use of an app that they built, known as PD@GE, to facilitate the delivery of regular employee feedback and productive performance conversations.
With the app, each employee sets a series of priorities and asks for insights and feedback. They can also provide real-time feedback to others. Employees can ask for an in-person meeting at any time — these conversations focus on transparency, honesty and continuous improvement. Sonia Boyle, GE Canada’s vice-president of human resources, says of the system,
“[It] requires a measure of trust and vulnerability […]These characteristics won’t appear overnight and will require a commitment to change and personal development.”
Prior to its seismic performance management shift in 2012, food producer and distributor Cargill Inc found it was failing to engage and motivate its 155,000 employees worldwide. As a result, Cargill decided to become an agile organisation, introducing what it termed“everyday performance management”. This system was based on four principles:
- Feedback needs to be continuous, rather than document-heavy and sporadic.
- Daily activity and practices are predictors of performance management quality.
- The relationship between employee and manager is paramount.
- Above all things, the system needs to remain flexible and agile to meet business needs.
This new system was designed to encourage and incorporate daily, real-time feedback into its performance management system. Since making this transition, the company claims to have seen measurable improvements, and it has become more forward-focused rather than merely reviewing past performance.
The results were amazing — 69% of employees said they received feedback that was useful for their professional development. Also, 70% of employees claimed they felt more valued following the implementation of the new system. From a performance point of view, managers found employees spending more time on tasks that actually mattered rather than spending hours filling out paperwork.
We can’t discuss agile performance management without mentioning Adobe, one of the most talked-about cases when it comes to performance management revamps. In 2012, Donna Morris, who was Senior Vice President of People Resources at the time, felt the annual performance appraisal and the stack-ranking process was bureaucratic, paperwork-heavy and overly complicated while taking up too many management hours. She also found it created barriers to teamwork, creativity and innovation.
The Adobe team decided to ditch annual performance appraisals and prompted regular, ongoing performance discussions between managers and employees by using a system they called“Check-in”. Since making the shift, Adobe has cut voluntary turnover by 30% and involuntary departures rose 50% — meaning poor hires were being managed out quicker. On top of this, the company saved 80,000 management hours annually.
Accenture found that under its old system,“Employees that do best […] tend to be the employees that are the most narcissistic and self-promoting.” Accenture wanted to rehaul their system and encourage employees who genuinely contributed to the organisation. As such, they began to incorporate the use of ongoing performance conversations while shifting focus back to performance development.
Accenture decided that forced ranking was illogical, as it forced employees to compete with colleagues who might have a completely different role. The new system is focused more on the employee and helping them become the best possible version of themselves.
Find out how Clear Review can help you
If you want to adopt performance management software designed to support agile organisations, get in touch and book a demo of Clear Review today.