In the 1950s, the first fast food restaurants—as we know them today—entered the dining industry. These diners boasted delicious food for the whole family, all of it ready in just a few minutes. Speed and convenience were the name of the game, and people loved it. However, over time this emphasis on speed and convenience led to a decline in quality. Fast forward to today, you probably don’t think of nutritional value and excellent quality when it comes to most fast food joints. And in some cases, you may even think of the opposite.
Performance management started out as a promising idea as well: offer feedback to employees to improve their performance, encourage growth, and succeed as an organization. Unfortunately, somewhere along the way, performance management became one of the most despised practices in the business world. The long hours of evaluation and the inaccurate, subjective reports are becoming more trouble than they’re worth.
So if performance management isn’t working, why don’t we just shut it down? That might seem like the natural solution, and in fact, you wouldn’t be alone in thinking that. Many businesses are ready to abandon performance reviews altogether.
But don’t feed those performance questionnaires into the shredder and cancel the upcoming round of reviews just yet. Hear us out while we make the case for keeping a performance management system up and running in your organization.
In the past few years alone, employee engagement has proven its worth across industries and within many different organizations. Managers and HR professionals are searching for ways to retain their superstar employees, attract new talent, and encourage exceptional work from everyone in their organization—all by increasing engagement among their people. Companies with the highest engagement ratings outperform those with the lowest engagement ratings by 21 percent higher profitability, 20 percent higher sales, and 17 percent higher productivity, just to name a few metrics.
Engaged employees need clear objectives, work that aligns with their strengths, a sense of purpose and autonomy, and more. These are all elements that come from an effective performance management system.
Internal Talent Development
While the talent war rages outside your organization, you may have a slew of overlooked superstars on your team. Internal development (and internal hiring) is a huge benefit of performance management, as employees overcome weaknesses, hone strengths, and learn new skills. Instead of turning to recruiters for new hires to fill your organization’s needs, you can look among the people you already have.
Internal talent development keeps the cost of hiring down, speeds up the time-to-contribution, and shows other employees that there is room for growth. But to develop your personnel, you need to understand their interests, goals, and strengths; a good performance management strategy will help you do just that.
Keeping the channels of communication open between employees and management is vital to any organization’s success. But as soon as a company grows beyond a handful of people in the same room, those channels start to break down. George Bernard Shaw once said, “The single biggest problem in communication is the illusion that it has taken place.” Managers think their employees understand their expectations; employees think managers understand their struggles. And in the end, everyone is left frustrated and confused.
With a regular performance management system in place, you can open up these communication channels again and again. When time is set aside specifically for discussions on workplace successes and struggles, those important conversations are much more likely to happen consistently.
Let’s not forget about the original goal of performance management. When done well, a performance management system can, in fact, boost performance among your employees. But this improved performance is more a natural result of the other benefits we’ve listed above. When employees feel more engaged, see opportunities for development, and practice open communication with their managers and team members, they perform better.
The key, again, is effective performance management. It’s true—the traditions that many companies have followed up to this point (i.e. lengthy processes and meaningless surveys) aren’t cutting it. But what about a new and improved version of performance management? A system that fosters engagement, allows for internal development, encourages communication, and improves performance?
That sounds like a system worth keeping.