Problem 1 – traditional performance management takes up too much time
Let’s take a look at the classic annual performance management framework. It typically starts with annual objective setting, then has an interim review, an end of year appraisal and often a pay and talent review based on the outcomes of the annual appraisal. That’s already a lot of work for managers. In fact, according to the CEB, the average manager is spending 210 hours per year on these activities.
So let’s imagine we try to add regular one-to-one conversations into this framework. If we do this whilst keeping all the existing processes in place, as many organisations have tried, it’s simply too much to ask of managers. The average busy manager won’t set aside the time to do them all and some things will inevitably get dropped.
Which bits are they likely to skip? I recently spoke at a CIPD conference where I asked the audience “how many of you track the completion rate of appraisals?” — nearly everyone said that they do. I then asked “how many of you track the frequency and quality of one to one conversations?” — hardly anyone said they do.
So what do you think your managers are most likely to focus their efforts on? Managers will gravitate their efforts towards what gets measured and what they are held accountable for – which is typically the annual appraisal. So unless we remove some of the elements of our existing performance management framework and change the basis of our success measures, we will end up right back where we started where regular conversations don’t happen, and the only discussions taking place are the interim and year-end reviews.
Problem 2 – managers save up feedback for formal reviews
This then leads us to another problem. Because managers are busy, they often save up their feedback for the interim and year-end reviews. But by the time it comes to the actual meeting the manager starts feeling awkward about bringing up things that happened two or three months ago, and so of course, they end up not discussing them. This is how we end up with the all too common situation where we have an underperforming employee being rated as good in their annual appraisal.
Problem 3 – ratings inhibit meaningful conversations
The subject of ratings leads us to our third problem. Annual appraisals often involve rating an employee. However, a performance conversation that ends in a rating will fundamentally change the dynamic of the conversation.
As a real-life example of this, at Clear Review we have monthly check-in conversations that don’t involve a rating. I recently had a particularly meaningful check-in conversation with one of my team where he talked openly about his lack of confidence in certain areas and the impact it was having on his work. Some real vulnerabilities came out during that discussion and we made a huge step forward with his confidence and progress on the back of that meeting.
At the end of that discussion I asked him whether if there had been a rating involved in the conversation, then would we have had the same discussion and outcome? He said “absolutely no way”, he would have just talked up his achievements and wouldn’t have spoken about anything he was concerned about or finding difficult. So having a rating would have stopped us from achieving the significant performance improvement that occurred following that discussion.
I’m not saying that ratings are wrong per se – there are arguments for and against them.
The key point is that if performance conversations are to be meaningful, you have to de-couple them from performance measurements, a point emphasised by the Chartered Institute of Personnel and Development (CIPD) in their 2016 report
“What works in Performance Management?” , which stated:
What do I mean by empowerment? Empowerment is about setting up managers to succeed with managing performance. And to do that, the need to give them the right framework in which to operate. But here’s the problem. The traditional performance management model is not setup to support regular conversations, in fact in most cases, it works against it.
We’ve talked a lot about the problems of the traditional performance management framework. So how do we create an empowering framework instead?
In answering this question, many organisations get bogged down in conversations about whether they should get rid of annual appraisals and ratings. Whilst many organisations have done just this with great success, some organisations are not culturally ready for this quite yet. However, the key to having an empowering performance management framework is actually about changing the emphasis of the framework from the completion of appraisal forms to the quality and frequency of performance conversations. Most performance management processes place 80% of emphasis on measurement and documentation and only 20% on the conversation. To get value from performance management and empower managers to succeed, we need to flip this around so that 80% of the focus is on conversations and feedback and only 20% (maximum) on administrative activities.
A best-practice ongoing performance management framework
What does an empowering performance management framework look like in practice? This is the framework that most of the organisations we work with now use in one form or another:
At the heart of the framework is the regular check-in conversation – a future-focused, meaningful performance and development discussion, held monthly, bimonthly or quarterly, depending on the culture of the organisation. These conversations are short and focussed – typically 20 — 30 minutes, depending on how frequently they are held. Between those conversations we are giving and requesting feedback in real-time, as events occur, using a quick and simple feedback mechanism.
If we need to measure performance for pay and succession planning purposes – we do that as a separate data collection exercise. By using technology, we can make this process fast and administratively light. This brings us to the next point – the role of technology.