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Performance management must return to the agenda

Nick Gallimore, Director of Innovation - Advanced

As 2022 builds momentum, there is a palpable sense that, whatever happens in the coming months, business will need to adapt, rather than lockdown or move into a holding pattern. Two years of on-off remote working has led to many employers shift to a hybrid work setting, bringing with it the dual benefits of meeting employees’ increasing demands for greater flexibility and the option to rapidly change gears if new disruption rear its head.

Changing ways of work require changing ways of management
What that does mean, however, is that as the way people are working has changed, so too does the way they are managed need to evolve. Employees are no longer sitting at desks metres away from managers, yet at the same time they aren’t completely remote either.

This requires a new approach to management, one that needs to be implemented quickly. Why? Because employees are voting with their feet. Forty-one per cent of the global workforce is likely to consider leaving their current employer within the next year.[1] And how they are managed is a major factor in whether they stay or go. In fact, another study found that it takes a pay rise in excess of 20% to lure employees away from a manager who engages them, and very little to tempt away most disengaged workers.[2]

The role of performance in engagement
But how do organisations get to that point where their staff are actively engaged by their leaders? A critical part of this is performance and development. People want to know they’re doing a good job, and if not, how they can improve? They also want to learn, develop, grow their careers and progress.

Yet to effectively track performance and identify those development opportunities, there has to be a renewed focus on performance management and development strategies for organisations, and many would be hard pressed to say this is has been a priority. In a new study from Advanced, 65% of HR directors told us that their performance management process has been put on the back burner over this last year.

This is perhaps unsurprising when we consider what performance management often looked like pre-pandemic. Annual objective setting cycles, standard forms and appraisals held at the same time ever year were unlikely to have been agile enough to deliver results when the way we worked was completely upended in March 2020. And with an extended period of disruption and uncertainty, what many thought of as a box ticking exercise was unlikely to get the focus it requires to be an asset to employers.

Time to relook at performance management
Yet at a time when having engaged employees is as critical as it has ever been, overlooking performance management is a huge gamble. It covers so many important processes within an organisation, such as regular communication, goal setting, development plans, performance tracking, open feedback and engagement tracking.

All these things help towards engaging staff, checking on their stress levels and supporting them during any difficulties, so the notion that organisations are abandoning their performance management is very worrying.

To recognise that is great; to fix it is another matter. Part of the issue lies in the apparent gap between what employees consider good performance management to look like, and what their managers think it is. Our study found that almost half (49%) of employees are not having regular performance conversations with their line managers, but that 67% of managers say they have performance conversations with their teams at least once a month.

This could be managers putting a positive spin on their management skills, or they could simply have a looser definition of what constitutes a good performance focused conversation. It is likely that managers are being honest when they say they are speaking to their team members multiple times a week, and in those interactions, they are asking questions such as ‘how is everything going’ or ‘how are you managing’.

When we think that employees consider great performance conversations to cover topics including goals, wellbeing and development, it is not hard to see why teams and their leaders are so far apart.

Clearly, managers need to be made aware that meaningful conversations are those that are dedicated, one-to-one meetings that focus on the performance and development of the employee, not just tacked on to the end of a workflow update or team call. Having these conversations on a regular basis (ideally once a month) is the best way to keep productivity up, engagement and motivation levels high, and tackle burn out issues before they become a real problem.

Holding leaders to account to refocus on performance management
For managers to do that, however, there needs to be a top-to-bottom commitment from the business to make performance management a real focus, and not let it slip to the bottom of the list. Leaders need to be held accountable for making performance management a priority if it is to become a valued asset in the fight against mass resignations and employee discontent.

Those companies that commit to making performance management a focus and changing how they deliver it to reflect their new, more hybrid ways of working, will be the ones that reap the rewards. Now is the time to start getting back on track with great continuous performance management, in order support, engage and grow the talented employees who make organisations what they are.

[1] https://www.microsoft.com/en-us/worklab/work-trend-index/hybrid-work

[2] https://www.gallup.com/workplace/351545/great-resignation-really-great-discontent.aspx

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