I used to wonder how much impact performance management has on employee performance. This is because beside being time-consuming due to its complexity, it haphazardly influences the reward system of the organization. Performance management could be one of the utmost inspiring and developmental events in the career of an employee alongside drive performance improvements and organization-wide results if done properly as featured in the global human capital trends at Deloitte University Press.
Traditional versus Modern Approach
The conventional performance appraisal, as described by Jeffrey Mello in his book entitled Strategic Human Resource Management, is focused on the past, one-sided, hierarchical, downward communication from top to bottom, about the appraisal of the supervisor on the performance of the employee. It is linked to compensation and often put employees in a defensive position that can result to uncollaborative actions.
By contrast, the modern approach also known as performance feedback as said by Mello, involves mutual exchange of information that both supervisors and employees reveal, discuss and assess together to plan for future work activities. It is more neutral and employees have control and influence in the process. It is also informal and is more concerned in designing a system that fits with the strategic objectives of the organization. On the word of Mello, an effective performance management system is one that “utilizes data about past performance to set goals, plans and objectives for the present that should result in high levels of performance in the future.”
Innovative Ideas–The Case of Deloitte
Companies that have sought out new ideas in the continuous process of managing the performances of people to get desired results include Deloitte, GE, Gap, Accenture and Adobe Systems. As a case in point, let us look at Deloitte when it committed itself to find a better performance management system that is accurate, timely and future-focused as presented by performance management experts Marcus Buckingham and Ashley Goodall in their article at Harvard Business Review. Its new approach was an outcome of “simple counting of hours, a review of research in the science of ratings and carefully controlled study of its own organization.”
To gauge performance, Deloitte came up with a performance snapshot that simply focused on questions on what you do with employees than what you think of them, yet it had a more complete view of the organization. The snapshot facilitated salary increases and bonuses, development and succession plan as well as performance pattern. It believed that the purpose of performance management system is “to see performance accurately, reward it accordingly and inspire even better performance in the future” by focusing on the future instead of the past.
The innovative performance solution of Deloitte is expected to bring better performance. As presented by Buckingham and Goodall, by putting emphasis on coaching and feedback and seeking for ways to simplify performance management, the hurdles of the organization on leadership, engagement and capability are provided solutions that exist and can be implemented. Deloitte eventually had a new system, a system that eliminated traditional practice of cascading objectives, annual reviews and 360-degree feedback and welcomed a new approach that promotes speed, agility and constant learning. It believed that there are several factors that influence performance and it cannot be summed up in a single value. Thus, their question now is not what is the simplest view of you but what is the richest view of you.
Forward Looking
In almost two decades in the university I work, performance measures have evolved from performance-based to objectives-based performance measurement systems. Today, while I am being evaluated on performance goals in the past academic year, my SMART (specific, measurable, achievable, relevant and time-bound) goals for identified key result areas in the next academic year are concurrently set by me and my supervisor. I think it is vital that organizations must understand that gone are the days that the focus is on the past as we are now in the time that the focus is on the future. In other words, given our ever-changing environment, we must learn to look forward rather than backward. This approach also made me realize that we should not be wasting time criticizing others when we can be better off by engaging others, which is more humanistic and likely sustainable.
Experiences are part of human’s learning process, that is why as an organization, when we collectively come to a decision to change, we should encourage the shift from parochial to inclusive thinking. It is noteworthy that organizations are exposed to best practices as it facilitates the organization in improving itself through learning from others. Moreover, managers and employees alike must understand that performance management system does not belong to HR only. I deem that everyone has a daily role to play in the organization, thus, it is important that the mission of the organization, and personal values and goals of the employees are aligned. In the end, a strategic choice is knowing what is fair and balance for everyone.
Ms. Dacul is a Doctor of Business Administration student at De La Salle University. She is a Senior Agribusiness Specialist at the University of Asia and the Pacific.
The views expressed here are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.