11 minute read
pERFORmAncE mAnAgEmEnt
The new approach to performance management
Organizations serious about high performance must rethink the way they measure performance in a post-pandemic world
By Anushree Sharma
Here is a classic view of performance review: • Here is what you did • Here are your new goals • Here is your salary hike (or pink slip)
And this is why neither did employees like the performance review process nor did managers like conducting these reviews. This process was enormously draining on morale, energy, and time. The performance reviews are often viewed as punitive and incapable of reflecting the fast pace of business, and the ratings have been found to have little correlation to company results. But for many years, they were also seen as a necessary evil.
Then a few companies started a movement. Businesses including GE, Deloitte, Accenture, did away with the performance ratings. But then, further research manifested that eliminating ratings led to a drop in performance and engagement. Leadership advisory firm CEB found that the number of Fortune 1000 companies eliminating the annual review increased to 12 percent in 2015 from one percent back in 2011. But CEB subsequently
found that getting rid of the review didn’t always reverse its restrictive effects. In fact, it proved to drop employee engagement and performance by 10 percent.
CEB’s analysis also found: • Manager conversation quality declined by 14 percent • Managers spent less time on informal reviews conversations • Top performers’ satisfaction with pay differentiation decreased by eight percent • Employee engagement dropped by six percent
The original push to remove reviews and their attendant ratings should have given managers more time to discuss performance rather than defend ratings. That didn’t always occur.
But the dystopian year 2020 also paved the way for new opportunities. Yes, accelerating digital transformation was one of the opportunities but the crisis also forced talent leaders to think about different aspects of performance management which was going over and beyond appraisals, reviews, and goal settings. The COVID-19 crisis prompted employers to think about the performance that was more aligned with people development and creating a better employee experience in the strong belief that this will improve performance — not only of the individual employee but of the organization overall.
So with this new approach to working, new expectations of business and market, and sustaining crisis how do we measure performance management?
Here are some of the emerging tenets to measuring performance.
Measure for new skills
developed: One of the major shifts predicted by the Aon Salary Increase Trends Survey 2020-21, was skill-based pay. Skill-based pay refers to a pay system in which pay increases are linked to the number or depth of skills an employee acquires and applies, and it is a means of developing broader and deeper skills among the workforce. This not only reinforces the outcome of your performance management but also makes employees more accountable for their own learning and growth. Measure how much your employees are engaged in training programs, track the number of activities they are indulged in to upskill themselves. Reading books, attending online workshops, webcasts, or participating in competitions and events directly influence employees’ skills. Recognize employees’ flexibility and willingness to develop
Is measuring performance only limited to goal attainment or is it more than exceeding expectations?
new skills and adapt to a different role and how they have contributed to overall service performance outcomes.
Committing to a highperformance culture:
Amid the new ways of working with changing customer demands, employees are prompted to don multiple hats to the existing roles and responsibilities. According to a recent survey, on average, employees are responsible for 2.3 roles outside of their specified job. Entry-level employees had the least number of additional roles, but more experienced workers like managers said they were taking on additional duties. In total, just 7.3 percent of participants said they didn’t have to undertake tasks outside the job they had been hired for. Role flexibility and the resulting responsiveness are fundamental to agile success. Rather than encountering a problem and then having to wait for additional resources or a specific skill set, team members can keep the project moving by solving it themselves more immediately.
While developing a multidisciplinary team is an important strategy for agile success, it is also necessary to consider people and ensure they are engaged and supported. Be fair and be clear about purpose and responsibilities. Ensure roles aren’t in conflict and don’t inadvertently introduce difficult relationships with team members. Provide support so people aren’t overwhelmed by multiple roles.
Use data for better
performance: The nextgeneration performance management depends on digital monitoring and tracking platforms to generate real-time analytic insights. Those workflows and process insights can be prescriptive and predictive, as well as descriptive. With improved dashboards, leaders can see which teams best add value to what processes. They can observe which workflows invite consolidation, automation, and/or professional development. Leadership can leverage data and analytics necessary to refine what high performance should mean for people and what it could mean for machines. These insights are indispensable. There will always be challenges and opportunities between managing highperformance people, highperformance machines, and high-performance systems. Innovatively confronting those challenges will be the most important leadership challenge this global pandemic has created.
Technology is simple, but culture is hard:
Dr. Jeffrey Sanchez-Burks
In a Special Interview with People Matters, Dr. Jeffrey Sanchez-Burks, Behavioral Scientist and Professor of Management and Organizations at the Stephen M. Ross School of Business at the University of Michigan shares that now, more than ever, there is a need to nurture an organizational culture remotely
By Yasmin Taj
The one thing that came out very strongly as we started to adapt to the new world of work was the need to develop and inculcate an organizational culture that enables employees to thrive whether they work from the office or remotely. While we can have all the technology to support them, if organizations do not have the right culture, it will all fall flat.
According to Dr. Jeffrey SanchezBurks, Behavioral Scientist and Professor of Management and Organizations at the Stephen M. Ross School of Business at the University of Michigan, where he co-directs the Leadership+Design Studio, “Culture is going to be more fragmented when you start off remote—full stop.” In this special interview with People Matters, he
emphasizes that technology is simple, but culture is hard. While companies with established digital workflows will be able to more quickly and seamlessly move employees from office to home, there needs to be a conscious effort to build the culture, else the corporate entity will not be able to perform to its optimum capacity.
Dr. Jeffrey Sanchez-Burks received his Ph.D. in Social Psychology with a minor in Cultural Anthropology from the University of Michigan. Previously, he was on the faculty at the University of Southern California and has had visiting appointments at universities in Singapore, France, Russia, and Turkey.
His research broadly focuses on social dynamics that shape strategic change and the design of human-centric innovations. Through this work, he has generated novel insights about how culture shapes work behavior, how context moderates social intelligence and emotional aperture, and approaches to facilitating mental bricolage that enable individuals to generate novel innovations using disparate knowledge they already possess. His research has been featured in a TED series, The Wall Street Journal, New York Times, National Public Radio, Harvard Business Review, and other international media outlets. Professor Sanchez-Burks’ has taught leaders in over 30 countries around the world who work in sectors including technology, financial services, consulting, arts & entertainment, government intelligence, mobility, manufacturing, and healthcare.
Here are the excerpts from the interview.
The year 2020 has been nothing less than transformational in every sense. Looking back, what kept you up at night, and what were some of the biggest shifts that you observed?
Absolutely – I have been awestruck by how immensely human characteristics have shown themselves to be central to the resiliency of businesses. Take the emotional complexity in everyone’s life now. Astute leaders recognize they must recognize and legitimize the emotional complexity unfolding among their employees.
Turning a blind eye toward these so-called ''soft'' elements of organizational life is no longer an option. Instead, leaders who tend to the natural social-emotional
dimension of their human talent have been more successful in keeping them engaged despite reduced physical interaction. The same is true for clients and business partners. A recent survey of leaders in Singapore conducted by us at the Michigan Ross business school revealed that addressing such engagement issues is a top priority.
In this moment of crisis, one has to make a lot of game-time decisions. How do leaders and organizations balance purpose and action in an environment like this?
Organizations that have invested in building a strong culture around a deep sense of purpose are better able to cohesively design and deploy new approaches to achieve success in times of disruption. Clear purpose accelerates action during uncertainty. As we navigate through the next normal, what have been some ways you have adapted to this time of tremendous change?
I don’t think we’ll have the luxury of navigating to the new normal; the destination doesn’t currently exist. Instead, there is the need and the opportunity to design our preferable future. For me, this has been a tough, sometimes dark, but also inspiring process this year. I thrive on co-creating immersive leadership development experiences with business leaders. This year abruptly put a stop to a typical 200km a year of travel to the region along with Europe and the Middle East. Fortunately, as faculty director for several of our Executive Education programs, I have deployed a number of virtual and remote leadership development programs with partner organizations and this year forced me to find ways to enhance and scale that. For many organizations, this crisis caused them to double down on their efforts to learn more about strategic innovation and change, and it has been extremely rewarding for myself and my colleagues at Ross to help.
Given that the business world has undergone severe disruption of late, the need to build culture has become more relevant than ever. What role does culture play in the transformation that organizations are going through in this new normal? What should organizations do to build their culture while employees continue to work remotely?
An organization’s culture is embodied in its behaviors. With many working remotely, it becomes more difficult to ‘live’ that culture and remain in touch with
the meaning that culture provides. Thus, now more than ever, there is a need to nurture an organizational culture remotely. Perhaps the way to think about this is from a traditional multi-channel approach of connecting with customers. Leaders need to see this as a creative design challenge and begin to experiment with low-cost, high authenticity ways to remind employees that they remain connected and their work is advancing on a core mission. This can include an increase in traditional channels of communication such as email and all hands on deck meetings. However, with an abundance of humility, I have seen leaders creatively use intentionally low-quality, but very personal brief video messages.
What according to you will be the most defining trends in 2021 as far as the world of work is concerned?
I fully concur with the sentiment of the leaders’ documented in our recent Michigan Ross Leadership skills survey that argue for developing ‘soft’ skills, even in technical fields. This survey revealed that the top five skills needed for the next generation of Singaporean leaders included: flexibility/ agility, the ability to make tough decisions, foresight, effective communication, and long-term planGiven the pressing need to innovate ways to better engage with customers, business partners, and employees while continuing core business functions, agility will be the most important skill to hone
ning in order to navigate the continuously evolving and challenging environment going forward. We also know from research on collective intelligence, that the primary way any complex collaborative tasks will succeed, is when each team member is able to deploy sophisticated socialemotional skills.
What do you think the year 2021 might look like as far as new skill sets and essential job skills are concerned?
Given the pressing need to innovate ways to better engage with customers, business partners, and employees while continuing core business functions, agility will be the most important skill to hone. Agility encompasses many of the other skills sought after by leaders in Singapore and the greater Southeast Asian region. Agility requires acumen in leading both execution and innovation— to make tough decisions in each of those domains and have sufficient foresight and long-term planning to adjust the proportion of effort spent on each.
