By Joe Larocque
Co-Founder & Senior Director of Product Management, GuideSpark.
Around 3 years ago, we got a call from one of our first and most innovative customers, Adobe, that they were throwing out their annual performance review and employee ratings. They called us to work with them on the big challenge of communicating this huge shift they were creating called a “check-in.” This was the first of hundreds of calls we have received as companies are strategically shifting how they measure and manage employee performance.
The redesign of performance management is undoubtedly the most significant HR communications challenge I’ve witnessed since we founded GuideSpark in 2008. In fact, it’s estimated that over 60% of companies are currently in transition to a rating-less, feedback-centric model and if you’re thinking that this is just a small company thing, you may be surprised to learn that 10% of the Fortune 500 had made the transition at the end of 2015, and it’s anticipated that the number may grow to 2-3x by end of 2016.
Over the last 3 years, we’ve had opportunities to work with some of the best employers to enable big shifts and expand our communications expertise into this important area. Today, we are launching our talent solutions to meet the needs of our customers, and I wanted to offer some of my key learnings in supporting over 70 companies as they worked through this.
Listen, learn, respond.
Just about every company I talk to is taking this leap. They recognize that the current way of doing things isn’t working. Many of our customers come into the change with eyes wide open, realizing that the new performance management is in a work in progress that will start with generic best practices and ends with a customized performance management design customized for their business and culture. In fact, one very large employer that we’re working with is doing a 3-year pilot of their new performance management process prior to roll-out. The best companies expect change going in and they install a flexible, adaptable infrastructure that allows them to listen to employees and managers about how things are going, make changes and then communicate out. Your success will be tied to how well you can adapt and how agile you can be.
Understand the User Journey.
Let’s be honest, performance management has a ton of baggage – it’s as important as it is despised by employees and their managers. One key design principle for the new performance management is to move it from being a program that’s owned and policed by HR to one that is embraced and valued by the business. You must inspire, connect and make the case for why employees should care. From there, you will have permission to get into the details around process, programs, policies, new systems, roles/responsibilities and competency building. But perhaps the most important piece here is nurturing that learning over time – hitting employees and managers on an informal, continuous basis with bite sized communications that nudge them to have more frequent, substantive interactions. Think: 1-2 minutes tips that can be consumed in line at the grocery store and put in place that week.
No one is born being great at feedback or coaching.
The new performance management is built on ongoing feedback and coaching. Make no mistake, these are muscles that you’ll need to build in your organization because these two competencies are neither intuitive nor natural. Understand that when it comes to feedback, you need to enable your organization to be great at not only giving it but great at receiving it and great at soliciting it. All 3 are required. Many companies we work with feel as though their managers are very short-term, task focused and so moving them to a place where they are pulling as opposed to pushing will take time.
Anticipate the ripple effects.
As you put performance reviews and ratings on ice, it’s important to think about the effects holistically. For example, for many companies the relationship between compensation and performance completely changes. It becomes less about past performance and more about long-term value (performance, skill scarcity, cultural behaviors, etc.). Think about how you’ll empower managers to make compensation decisions without the crutch of the rating. Also, if growth and development is really at the center of your performance management philosophy, how will you integrate career conversations and developmental resources. The relationship between goals, performance, career and compensation will undoubtedly change and it’s important that managers be brought up to speed.
Back to Adobe, because in four years, they are proving out the model with a 30% decrease in employees quitting, a 50% increase in involuntary departures and a recouping of most of the 80,000 hours spent by managers annually on reviews.
As you execute on your own performance management transformation, don’t let communications and training be an after-thought. There’s a lot to cover and without an adequate communications plan you lack the bridge that connects the design of the program to the outcomes that you expect.
Meet Joe Larocque at the NCHRA Engagement & Recognition Conference - September 28th at Golden Gate University
Qualifies for 6 SHRM Professional Development Credits (PDCs) / 6.0 HRCI Recertification Credits of which 1.0 qualifies for Business credit and 1.25 qualifies for Global credit.
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Joe Larocque, Co-Founder and Director of Product Management, GuideSpark
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