Years after Adobe made headlines by announcing it was killing the annual review, performance management continues to evolve. And the evolution is widespread: 79% of executives say that redesigning their process is a “high priority.” So, what’s driving the continued interest? The belief that continuous feedback and coaching enables employees to sharpen their skills in real-time and obtain new ones, opening doors to advancement and other career opportunities. Businesses that take this approach are more agile, since continuous employee development positions them to fill new skills gaps as they emerge. And they’re also more likely to find themselves with engaged employees that stick around.
HR leaders at most organizations find themselves somewhere in the process of redefining performance management at their company. Some are still doing annual reviews, but have added quarterly check-in meetings. Others have expanded their evaluation framework to consider not just outcomes but behaviors, often referred to as the “what and how.” Regardless of the changes, many find themselves asking: “How do I know if it’s working? Are the changes having the right impact? And if not, what do I need to do?”
Even as performance management evolves into a less formal process, it’s still possible to measure the effectiveness of these new interactions. To get started, you can break it down into three parts:
New performance management initiatives usually require new behaviors from employees and managers, whether it’s engaging in more frequent feedback and coaching conversations or developing new types of goals. As a first step, assess whether people are doing what they’re supposed to be doing under the new process.
Let’s take the example of a company that has introduced more frequent feedback conversations. There are a number of ways to assess whether such conversations are happening and if they’re focusing on the right topics. Many companies choose to survey or poll employees. Others leverage reporting inside of their performance management software to see if feedback is being documented and to measure the quality of that feedback.
If you find that employees and managers are not having many conversations, or the conversations are not focusing on the right topics, you may want to recalibrate your communications to employees about the nuts and bolts of the new process. If conversations aren’t happening as often as you want, more nudges may be in order. Or if conversations are happening, but they’re only focusing on feedback and not future development, sending out more information to managers about coaching may help balance the conversation.
To succeed over the long-term, “informal” performance management elements (like ongoing conversations) depend on employee buy-in and support. So, while it’s important to focus on program mechanics as you make changes, it’s also important to keep an eye on employee sentiment towards your process. If employees don’t think it’s working, they’re likely to disengage with the process—and eventually stop participating.
Recent research from IDG suggests that many employees have concerns about the process. For example, more than half (52%) say their manager isn’t a strong communicator or coach and nearly half (43%) say they don’t think informal performance management is fair. Do you know how your employees feel about your approach?
The simplest way to monitor how employees are feeling is to ask them. Often, it’s as simple as a quick poll. If you’re worried about adding additional clutter to employee inboxes, try incorporating polls into existing touchpoints in your communication plan.
There are additional ways to measure how engaged employees are with your process. You can analyze how much they are interacting with your communications, and which topics are most popular. You can also look at how they’re adopting new principles. If your process emphasizes career development, tracking usage of resources and programs can help you understand how many of your employees are focusing on development and growth.
Monitoring sentiment towards your evolving performance management process can help you alleviate the specific concerns of your employees. For instance, if you find that your employees, like those surveyed by IDG, feel managers aren’t great at delivering feedback, you can bake in more manager-specific training and communication to your efforts.
Finally, there’s the business impact of your program. Performance management evolves due to a variety of reasons, but some of the most popular include:
Decreasing voluntary turnover or attrition based on a perceived lack of opportunity
Improving operational efficiency and productivity by helping people improve in real-time
Enabling the organization to fill key skills gaps as they emerge
Consider the outcomes you are seeking at your organization, and which metrics indicate your progress. For example, your organization may want to reduce voluntary turnover due to perceived lack of opportunity. In this case, analyzing exit interview data will help you understand whether that specific type of turnover is decreasing.
At the end of the day, even if your metrics show that the mechanics of your program are running smoothly and employees like it, it’s worthwhile to track indicators of whether your program is having the desired impact. It may take some time to see measurable progress on some outcomes, like retention, so consider checking in once a quarter or at least twice a year.
Even as performance management evolves into something more informal and qualitative, you can still track and measure success in concrete ways. Monitoring these three dimensions of your program—the mechanics, the sentiment, and the business impact—can help you keep tabs on the health of your program, make necessary adjustments to improve your results, and ultimately achieve the ultimate goal of the program—a happy, productive, and adaptable workforce.