Remaking performance management

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Most organisations’ performance management systems are unpopular and ineffective. How can they be improved?

If surveys are any guide, most managers and employees dislike their performance feedback systems. Many staff believe appraisals are unfair, and a majority of managers say they’d happily get rid of reviews altogether.

This is hardly surprising — staff are anxious about unexpected criticism; managers worry negative feedback will be met with anger, and may even worsen the problem.

Given the chance, many will put off performance appraisals — or even avoid them altogether.

The research suggests they’re often not particularly effective either, says University of Melbourne Professor Michelle Brown.

For the most part people are “extraordinarily unhappy” with current performance management systems, she told the Not for Profit People conference, hosted by EthicalJobs.com.au in Melbourne this week.

An analysis of many previous studies found “feedback often doesn’t work, whether it’s positive or negative”, she explained in a round-up of the current research around performance management.

There are a few reasons commonly believed to be behind this.

“The first argument is that annual reviews simply don’t reflect the nature of work in organisations anymore,” says Brown.

Reviewing goals set six months or one year before might not be very useful if circumstances have dramatically shifted during that time, such as if government policy changes or the organisation has lost a major contract.

Many argue current approaches tend to be very backward-looking and negative, placing less of an emphasis on future development than they should.

Some also believe employees play an overly passive role in many performance appraisal systems. Conversely, this means supervisors are placed in the role of judge “and are supposed to know all the answers”.

Continuous, strength-based feedback

One of the big trends in performance management is towards giving continuous feedback, rather than relying on the once-a-year meeting.

There are a few arguments commonly made for more regular communication about how performance is tracking:

• More feedback overall, so more learning;
• Staff are more likely to understand what’s expected of them;
• Everyone’s memory is fresher when appraising events;
• Surprises are less likely, reducing anxiety.

The research is mixed on whether it works, with some studies suggesting regular feedback improves performance, and others finding it made no difference. It appears there’s an inverted-U relationship, says Brown — in many cases increasing the frequency helps, but too much feedback can become overwhelming.

Feedback sessions should be scheduled rather than spontaneous, she thinks, or you run the risk of putting off meetings until something goes wrong.

Millennials are more likely to welcome regular feedback than baby boomers — perhaps because their relative inexperience makes them hungry for guidance in the workplace — so knowing the appetite for increased evaluation in your own workplace is important. That said, even among millennials most people still want to avoid performance appraisals as much as possible.

It also depends on what’s being discussed — more frequent feedback can be damaging if consistently negative, Brown says.

In fact, positive feedback — building on strengths — appears to generally be better at improving performance. Even where an employee is having difficulty, finding an instance where they did a good job and identifying the factors that helped them do so can be useful.

“There’s more of a focus on identifying the factors in success and the kinds of skills and abilities that employees bring to contribute to those successes,” she explains.

This doesn’t mean organisations should avoid discussing problems, however — you don’t want to end up making the case to Fair Work for why you fired an employee whose performance reviews hold nothing but praise.

Using narratives to clearly explain why someone is doing well or poorly is also important. Number ratings or ‘satisfactory/not satisfactory’ systems often leave staff unclear on where they can improve and how, unlike a paragraph or two explaining what they need to focus on.

Managers need to think critically about how they go about this, Brown added. Studies show women are more likely to receive critical feedback and personal comments about issues such as how they present or handle interpersonal relations in the office.

For managers, writing down feedback before the meeting is helpful, to ensure it’s better thought through and takes no unexpected turns.

Coaching and active reflection

Active reflection helps too. Often performance appraisals are lobbed “like a grenade” and people are expected to be able to make sense of it and move on.

For managers, try asking staff questions to provoke reflection, rather than simply telling individuals what they need to do. This “coaching” approach focuses on creating a supportive environment to have open discussions where manager and employee collaborate in diagnosing problems and finding solutions.

“Coaches ask a lot of questions … It’s about getting people to reflect on their performance, and that can help identify solutions,” she explains.

“There’s an amount of work that says coaching works. Coaching works for the employer and it also works for the employee. We know for employers for example, they have more productive workers, there’s improvements in communications, improvement in the performance of teams, employees are happy because they’re improving their career, they have a much higher level of clarity about their roles, and so on.”

How these ideas are implemented depends on the organisation, Brown adds. There is no one size fits all solution.

Organisations should also check whether their managers have the skills to take a new approach to managing performance — effective coaching and a focus on future development require a different set of skills to the more typical “judging” approach.

“All of the surveys suggest employees want developmental approaches,” Brown says.