20 Dec Countdown to 2023 Performance Management – Top Five Best Practices
As we wind down the year and look to 2023, I want to revisit one of the most powerful and under-utilized tools that organizations have at their disposal to create high-performing teams and deliver outstanding results.
The annual performance management process has gotten a bad rap for several reasons that I discuss below. The greatest gift a leader can give their teammates is a concise set of clear objectives that are regularly discussed and updated. We are potentially looking at a challenging economic environment in 2023 which places even greater importance on the need for motivation and alignment.
As an article by McKinsey & Company reminds us, “strong performance management rests on the simple principle that ‘what gets measured gets done.’”
In an ideal system, a business creates a cascade of metrics and targets, from its top-level strategic objectives down to the daily activities of its frontline employees. Managers continually monitor those metrics and regularly engage with their teams to discuss progress in meeting the targets. Good performance is rewarded; underperformance triggers action to address the problem.
So, what happens when you do not have a strong performance management process in place? Things go wrong quickly.
Pitfalls and Shortcomings of a Weak Performance Management Process
Poor Metrics – If you are not tracking and evaluating the right metrics (or worse, any metrics at all), you are setting yourself and your team up for frustration and failure.
Poor Targets – Identifying targets can be a balancing act. They must be attainable, but attainable with the right amount of effort. Too easy, and no one is invested. Out of reach, and people give up before they begin.
Lack of Transparency – Employees who don’t understand the metrics from the top down, often do not trust that they are meaningful and fair.
Lack of Relevance – Employees who do not feel that the metrics reflect their role, experience, and expectations of performance will balk at being held accountable.
Lack of Dialogue – Without frequent, open, honest, and effective communication, goals and results don’t matter.
Lack of Consequences – The word “consequence” sounds harsh in terms of performance management, but rewarding good performance is probably even more important than penalizing bad performance.
Top Five Solutions for Building a Better Performance Management Process
#5 – Identify (no more than) five well-defined objectives.
Starting with no more than five well-defined objectives and understanding what data you need to meet these objectives will help keep your team on track.
#4 – Conduct Quarterly Employee Reviews
These should be formal, with the opportunity for informal check-ins more frequently in between. These reviews are not just for critiquing the employee but should also focus on employee feedback. Are they getting the support they need to be successful in their roles? Are they having issues with process, culture, or communication?
#3 – Develop 3 Professional Development Goals
Professional development for your employees is more important than ever. Investing in employees is an excellent retention tool and builds engagement.
#2 – Conduct Reviews Twice A Year to Adjust Goals and Expectations
It is important to conduct a review of your objectives, goals, and metrics at least twice per year. What was important at the beginning of the year may be obsolete today. Better to make adjustments sooner than later to continue driving success.
#1 – Keep the dialogue going
The importance of continuous dialogue cannot be overstated. When employees feel they are not involved in the strategy or that their input is not valued or understood, it is much harder to motivate, incentivize and garner loyalty at every level of employment. Buy-in and morale are harder than ever to come by in the workplace, so be open to constructive feedback from employees, be transparent in your metrics and goals, and communicate, communicate, communicate!
Contact us if you see the need for a stronger performance management program in your organization. firstname.lastname@example.org