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3 Tips for Improving Performance Management

By Ben Eubanks | 4-min read

Let’s try a little experiment. Grab your keys and hop in your vehicle. Now, using only your rearview mirror, try to drive to your favorite coffee shop.

Sounds ludicrous, right? Yet, many companies take that approach to performance management without a second thought. Instead of planning for what’s ahead and how to prepare their people to improve and overcome it, many managers focus too heavily on previous performance and outcomes, missing the opportunity to enable better future performance. 

While it is important to guide employees when needed, a great system of performance management can’t be built solely on past performance, or it may actually impede worker and organizational performance. In a 2017 study of more than 250 employers, Lighthouse Research found that there were distinct differences in how high-performing employers (those with positive trends in revenue, retention, and engagement) approached performance management. This group was much more likely to say that their approach (outlined below) actually engaged workers and improved performance, while low-performing firms in the study admitted that their organization’s approach to performance management actually diminished the ability for workers to achieve their goals. 

Three Elements of Great Performance Management

By taking a page from the playbook of the best companies in this study and how they operate, any company can improve their own performance management practices. Here are the top strategies used by high-performing companies:

1. Recognition

Instead of only catching people when they’re doing something wrong, make sure employees understand when they’ve done something right. One company that had amazing results with this is Ohio Living. The firm started using recognition purely to help improve engagement, but the leaders quickly realized there were other benefits. In the areas with consistent recognition, the company started seeing reductions in critical metrics like patient infections, re-admissions, and fall risks. It’s more than just a pat on the back – it’s a way to drive behaviors that are crucial to business performance. 

2. In-the-moment manager feedback

Instead of offering stale feedback months after the fact, managers help workers immediately see where they can improve in real time. Imagine getting a single review once a year from your leader that tells you what you did right and what you did wrong. In that review, half of the things you did wrong were done the same way all year long because you didn’t get feedback in time to do them properly. This sounds entirely illogical, yet it’s a reality for so many workers today. Timely feedback can help improve performance and worker satisfaction. 

3. Peer feedback

Historically managers have been the core feedback resource in employee reviews, but peers often have differing perspectives to help round out the organization’s view of employee performance. Research shows that recipients of peer feedback feel more engaged, but new data actually show that givers of feedback are also more engaged at work. Firms can leverage peer feedback to build a more holistic view of performance, filling in gaps where managers might not have deep insight into worker performance due to a lack of technical awareness. 

Employers that use these strategies in performance reviews and management are more likely to see better results, consistent improvement, and higher engagement from their process.

Though that’s a positive note, actually connecting and enabling managers and employees to implement this new approach to performance management is something else entirely. In a recent conversation with an HR leader at Boeing, the leader shared that one of their biggest successes in changing their performance management process was by helping workers to feel a sense of ownership over their own performance and career. Instead of just a top-down approach, there’s palpable excitement from the bottom-up as well.

Communication is Critical for Change

In a recent research interview with Terra Argaves, Head of Talent Acquisition and Engagement at Intergraph, Argaves explained that the company had recently made some sweeping changes to its performance management system. In addition to eliminating ratings and encouraging more frequent conversations, she said the need to communicate with various groups within the company was one of the biggest issues for her team. Yet, these changes often receive push back by those who are used to the status quo, such as

  • Executives wanted to be sure the process still allowed them to identify and support the best and brightest workers like the old system did. 
  • Managers needed some help and guidance with how to manage the process and worker expectations around salary and career discussions
  • Workers needed to understand that the new managerial relationship was less about grading someone and more about being a development coach

To meet these varying demands, targeted conversations and communication can help bridge the gap. A continuous education approach that keeps the critical concepts top-of-mind is best. By leveraging multiple channels and types of content, the employer can satisfy diverse employee communication needs.

For instance, HR can address the executives’ concerns by sharing examples of how great performance is still valued and visible throughout the organization. The HR team could also highlight managers that build effective performance management systems that yield great results, helping others to improve adoption of best practices around continuous feedback. Finally, employees can be taught to have a sense of ownership over their career and development, allowing them to ask questions and dig deeper into career issues that might have previously gone unexplored. 

By addressing the questions and concerns from each population, Agraves believes that the new review process not only kicked off without an issue but that it will continue to be embraced over the coming years. This is an important element because communications are core to success with a process and culture shift this massive. 

Instead of merely relying on managers to make the transition from performance management to performance enablement themselves, this culture change requires deeper investment and effort from leadership. As with any change management initiative, communication is a critical point, and it’s perhaps even more important in a process as “human” as performance management. Sharing key transformational concepts, highlighting practices from your best leaders, and engaging a variety of stakeholders with messaging can help communications and HR teams drive this change more rapidly and extensively.