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Evolving Performance Management for the Changing Workplace – Roundtable Report

27 January 2016     London
Hosted by theHRDIRECTOR.
Chaired by Jason Spiller.

Vicky Denning, Registry Director – John Lewis Partnership
Anna Sabit, Talent & Resourcing Manager – Tesco
Tracey Wilson, Performance Management Manager – Royal Bank of Scotland
Tom Nash, Head Of HR – ITV Studios UK
Dave Hargrave, Senior Consultant HR Software – Willis Towers Watson
Angel Hoover, EMEA Talent Management Practice Leader – Willis Towers Watson
Joanna Charlottes, Performance Development Manager – KPMG
Sue Whysall, Learning & Development Manager – Babcock International Group


For generations, performance management served the dual purpose of monitoring the performance of employees and the value of their contribution, whilst providing a gauge to career development and possible promotion. The set parameters are based on ancient operational frameworks.

Indeed, the new reality is that change is the only constant, and it is wholesale, sonorously impactful and faster than employers can react to. The burning question is, how can the traditional methods of Performance Management possibly be expected to cope with the modern workplace?

How is constant workforce change challenging performance management? How can pm be best positioned to cope with such impactful change as remote working, the multi-generational workforce and the short tenure career culture?

Tracey Wilson: Change is constant, but so is the core of good performance management – making sure that people are clear about what they have to do, are capable and motivated. Good managers genuinely care about their employees and the work they are doing, and don’t shy away from regularly giving/receiving feedback or asking questions. The quality of the relationship and communication skills are key to overcoming change, whether that’s how and where we work or with people who might think differently to us.

Tom Nash: People already work at 11 o’clock at night and six in the morning, then there is the complexity of trying to manage people who are in other countries. We found that what’s more useful for us, is similar to HR roles with business partnering capacity, enabling people to have performance conversational feedback from people who aren’t necessarily their traditional line manager.

So does that mean that it’s not as formal as perhaps it was?

Tom Nash: It’s not a one-size-fits-all for any company. We took out our performance management system which was seen as quite clunky, we removed ratings and we’ve removed a lot of paperwork. What we think is more important is you have that conversation in the moment, to have this humming bird effect of a conversation, as and when you need it, and that might not always be documented.

Angel Hoover: Most people today have a smart phone, can work on the train, before they get out of bed, or even take a couple of hours to go skiing and pop back online, which is “back to work”. Our newest generation has introduced this concept of work-life integration, but we’re seeing other generations adopting this same way of life, because we can all appreciate the ability to integrate work and life when work is always in your hand or your pocket in the form of a smart phone. The question about how you then manage performance really comes down to managing expectations, then ensuring that the manager and the employee are really evaluating the outcomes against those expectations. It’s not about the process – completing a form – it’s about the quality of the conversation.

Anna Sabit: We have two head office locations, we all hot desk, sit with different colleagues, and this helps to bring us all closer together and means that colleagues get to know people from outside of their immediate team. It also breeds a more collaborative environment. It’s an evolution of a big change to these processes. In part it is about moving to a place where there’s a lot more fluidity around the way in which we assess performance and stopping it being so systemised and process focused.

David Hargrave: We are seeing more social feedback being used in performance processes. As people use that technology in their social life it is bleeding into their work-life too. Instant feedback is something we are becoming accustomed to, and almost expect.

Angel Hoover: Indeed, social Media creates a filter that feels comforting for some users; you can use a script more easily than if you are sitting face-to-face which can be particularly useful when having constructive conversations.

Joanna Charlottes: The majority of our colleagues are at client sites, so what we’ve tried to do is implement a culture of honest conversations which is colleague driven. It’s important that colleagues own their own performance development and reach out to others, be it their project lead, performance manager, a peer or a colleague, to talk about how they want to progress and get feedback in a more continuous way.

You are wholly reliant on honesty – it’s almost like self-performance management – that’s a big culture change.

Tom Nash: I have a team member I sent to Australia to go and support our Australian business. Considering the geographics and time zone challenges, it’s how you provide that more personal perspective, how you provide that support to the employee. I don’t think this is the right answer but me relinquishing a bit of management control of that person to someone based in the office there is about trust, and it is an increasing reality.

David Hargrave: A single performance management approach doesn’t necessarily align to all the different employee segments that exist in an organisation. The way that roles contribute is a key way of thinking about how you might segment different performance approaches. There are going to be some roles where small increments in performance will have a significant impact on team, business unit or corporate results and other roles where high performance from an individual has very little effect on the organisation; so the amount of time and effort put into performance management needs to be appropriate for the output. You might take a different approach depending on the employee segment in question – it’s really about how the role is structured.

What about the reality of increased attrition, shorter employee tenures?

David Hargrave: We all talk about decreasing turnover as a really good metric, is there an argument that increasing it may be a good thing as well?

Tracey Wilson: Through our Early Career programme, we’re bringing in new graduates and apprentices who are being developed in cohorts as well as managed within our business areas. The graduates and apprentices receive guidance and support to accelerate their career and we’re growing and retaining our own diverse talent pool in line with our business strategy.

Anna Sabit: People may move externally, experience time out in a different organisation and then come back fresh with new ideas. So I guess it is a problem on the one hand, but actually I think it probably brings real benefit too. If you can provide people with rich, fulfilling careers and you can help to deliver on their aspirations, then actually you are likely to retain them for the longer term anyway.

Joanna Charlottes: We prioritise people being ‘good leavers’. Our Career Management Team have actually created a careers transitions service which is a confidential service that links our colleagues with opportunities with our clients. If it’s the right thing for our people to explore new opportunities, we can support them to leave; help them with their CV, interviews etc. We want to support our people with a career for life, not just within our organisation.

Angel Hoover: Regardless of the model, high potentials and high performers want to know where they stand. Organisations need to have a mechanism to provide that feedback. Now does it have to be the relative ranking? No, it does eventually come back to that conversation with the manager in setting expectations. The effectiveness of the manager in facilitating that performance and development conversation is the number one enabler of an effective Performance Management system.

Making the case for investment in performance management – if systems are out-dated managers feel unsupported and ill-equipped – how should hr and pm managers make the case for change in terms of business imperative when budgets are still tight?

Tom Nash: It was really simple for us, we did a huge amount of surveys with our workforce and we had two big things that came back. One was that we use systems called iPerform and people hated it because it was clunky and actually the focus became the system and not about the conversation. The second thing people really didn’t like was this idea of ratings determining pay be it variable or annual increase cycle and underneath were words like; “worried, anxious and nervous”, as we are focusing on giving managers the ability to recognise when you need a conversation with employees confident about driving that.

Tracey Wilson: We’ve been building our manager’s capability through a bank-wide programme called Determined to Lead, and we know there’s opportunity to continue to evolve our approach through employee opinion surveys, people metrics and feedback to our mailbox. Also workshops will enable us to have some in-depth employee conversations about what and how performance management could be done better. I’m conscious our approach is also influenced by our regulatory obligations which we must continue to meet.

David Hargrave: We see the most effective organisations integrating their Talent, Reward and Performance teams and utilising a common infrastructure. That comes from having jobs well defined to start with; a job architecture – including a common grading structure – and clear definition of the functions and disciplines.

Angel Hoover: The infrastructure makes the business case for implementing and enabling technology, to have an integrated view of everything you are doing for your workforce. Once you have integrated your platform, you’re optimising the ability of your talent to perform at the highest level across the full talent lifecycle, which leads to financial performance.

Optimising leadership towards performance management: what is the role of leadership in championing performance management processes and maintaining engagement?

Tracey Wilson: Leaders are key to driving performance, communicating plans and expectations, and role-modelling good behaviours and performance management is most effective when all employees are invested in it. It’s both the employee and line manager’s responsibility to seek and give two-way feedback at key points in the cycle, whether that’s at the end of a piece or work or ahead of formal reviews.

Anna Sabit: We talk a lot about objective setting being leader led, and our leaders standing over the objectives that they set for their teams. The role of the people function isn’t to police those objectives, it’s to work hand-in-hand with leaders to help them set those effective objectives. It’s very much about putting the onus on the leaders to drive these behaviours and these initiatives. We also recognise the importance of trust and that our colleagues trust their leadership teams, so important to the Performance Management process.

How can performance management be most effectively promoted and treated as a positive influence, rather than a disruptive and time-consuming tick-box excercise?

Angel Hoover: There’s a framework we have been developing over the last couple of months to answer this question of how to fix Performance Management. What we have concluded is that there are a couple of critical design decisions to be considered when evolving performance management from a tick-the-box exercise, to a value-added programme. It needs to impact business performance, it needs to create that line-of-sight for line managers so individual contributors clearly see what they contribute to the overall business.

Tom Nash: For us it works better for the volume roles because when we look at our production roles, cameramen, producers or directors, they don’t have a fixed line management structure when they are working on a project. So if it’s a drama, it might be over a year, if it’s a short factual documentary it might be over three months. So actually the approach we’ve moved to, for them, is great because it means that this conversation is happening regularly.

Joanna Charlottes: One way to think about how we can avoid this being a tick-box exercise is to ensure there’s no box to tick! We move the conversation from generating a rating which then generates an action (e.g. this reward or this talent opportunity) to instead having an open conversation that really explores what colleagues want to develop and achieve. I think providing clarity of purpose in these conversations is really key.

Beyond design to introducing and integrating new pm platforms; how should time, resources, and budget be best allocated? What does best practice look like and how can pm effectiveness be measured and benchmarked?

Angel Hoover: With respect to the amount of time one spends on the process, we explicitly asked that question in our survey in October. I was surprised by the answer! Respondents stated they spent less than two hours on average on Performance Management over an annual period. That’s very little; no wonder employees feel performance management is ineffective. Managers are saying the same thing – this isn’t effective. When we evaluated how much time should be spent, we found that there was a marked return on the time invested up to about eight hours. After that, we saw diminishing returns. If you apply this eight hours over the course of a year, it’s really not that much, but the value that you can derive through the process is exponentially enhanced if you use this time more effectively.

David Hargrave: Delivering the Performance Management experience through technology has historically been a bit clunky and ineffective. Organisations have done it differently and parts of one organisation have got an Excel system and others are linked to their HR information system, others have built an in-house tool. I guess we are seeing more and more organisations move towards a single performance system but not necessarily one performance process – a single system that can manage multiple performance processes.

Tom Nash: We are wrestling with how you measure this when there’s nothing necessarily to measure, but when we started thinking about embedding it, we did our mid-year pulse survey for engagement and one of the questions in there is an agreed statement on: “I know how to effectively manage my career at ITV”.

Tracey Wilson: We use a variety of metrics to measure the effectiveness of performance Management. Like most organisations, we have an annual employee opinion survey which has a performance and reward category. It enables us to benchmark our progress against the previous year, the global and financial high performing norms. Performance document completion rates tell us if reviews are being held and the quality of the commentary is usually a good indication of the quality of the conversation.

Anna Sabit: We use a colleague survey called What Matters To You. There are various questions in there designed to assess engagement. We also ask about how people are feeling about their career progression at Tesco so we will hopefully be able to see some changes as a result of the changes we make to our approach to performance management. If I think about succession at our business leader level and director level we would like to see the balance between successors promoted internally versus those recruited externally to shift so that it favours the internal promotion approach.

Joanna Charlottes: The removal of performance ratings has gone down really well with our colleagues. Our global employee engagement survey resulted in a 19 percent increase in people agreeing that their job performance had been evaluated fairly following the removal of ratings, and our bi-annual honest conversation survey consistently finds over 80 percent of people find value in their honest conversations. So, from a colleague perspective, it’s really been very well received. I don’t think yet that we are able to analyse whether it’s had a wider business impact.

David Hargrave: I guess that translates into financial performance, that’s one of the tests, that’s the primary reason for Performance Management, but it can’t be the only thing, because if you are going to be effective, if you’ve got an effective Performance Management system you can still have bad financial performance because of external factors. So you have to align it with a number of other different metrics, like ability or turnover – so perhaps there’s an optimum level of each of those things that indicates that Performance Management is effective?

Joanna Charlottes: We could look at how effective our reward strategy, colleague engagement, talent proposition etc. are as these are all linked to Performance Management. Whilst we of course want our PM approach to drive financial results, there are so many factors that impact financial results that it’s not the only way to measure it.

What are the critical capabilities of effective pm managers for the future of agile performance management? This is a completely different way of dealing with pm on the continuous schedule, so how do you train your managers to deal with this?

Angel Hoover: Managing performance is one of multiple aspects of a role that a manager must execute. It’s about engaging employees, it’s about helping them deliver on the work and it’s also about inspiring them to get excited about the work they are delivering – crucially, it’s also about being authentic and honest. As a leader, and manager, that is your role. I believe that one of the sins most organisations have committed over the last couple of decades is that we’ve promoted people just because they were good at their technical job. Unfortunately, we’ve promoted them into roles where they were then responsible for managing people without assessing whether this was something they either could, or had an aspiration, to do. For me, it’s really about establishing the role profile and the expectations of managers. Constructive conversations should not be adversarial, they should be honest and, at the end of the day, fulfilling.

Tom Nash: I think that there’s a real risk there, a real danger that in removing all of these things you just tolerate poor performance or nothing happening.

Angel Hoover: I would agree. I think that traditional Performance Management training is traditionally focused on executing the process only. Instead, what we’ve seen over the past four or five years is a shift to managing the conversations, whether it’s five conversations or whether it’s coaching and feedback and how to do that. It’s the behavioural aspects that we need to train and build the capability to influence the effectiveness of the process. It really starts with the manager, but also it resides in the accountabilities of the employee as well.

Does the process not open itself up to criticism? Expectations not met, no formal record will surely lead to complaints?

Anna Sabit: The risk with all of this is that you can start to focus on the one percent that aren’t performing and that then doesn’t take account of the fact that there’s 99 percent of people that are. I think we need to set up our processes to take account of the fact that the vast majority of colleagues want to do well, want to perform their roles well and want to be recognised for that. We sometimes can get into this conversation where we focus on that really small percentage of people that aren’t delivering and I think that’s a real danger.

Joanna Charlottes: I think that’s such a pertinent point around “why do we design a process to deal with the small percent of people who don’t do the right thing rather than something that works for the majority”? Even when we do record performance discussions or conversations, if you are recording something for a poor performer you’ll often find that it’s not robust enough to really be relied upon in formal meetings, so, actually, I’m not convinced that recording performance for an audit trail is always best practice.

Anna Sabit: A few years’ ago we changed our leadership skills, because we had a competency framework which said this skill is ‘teamwork’ and this is what good looks like. So you could go through the positive and negative indicators and tick how you benchmark but when we launched our new leadership skills with just a broad description, the idea now is that our colleagues and leaders can make sense of it for themselves. So now you can internalise it and you can bring it to life in your work on a day-to-day basis.

How should the pm programme be integrated into the succession planning process?

Angel Hoover: There are several data points to review when you are thinking about succession. Succession management is not only identifying those individuals that are going to be part of the talent pool or the specific individual you’d like to place into a leadership vacancy. It’s also, even more importantly, about equipping talent and readying them, when they’re not yet ready, to take on more complex roles. It should be very proactive and performance results certainly play a role in that. Even if you’re not capturing a rating, you’re going through that evaluation process; an evaluation of how that individual is doing and you’re giving them on-going coaching and feedback about where to improve, where their key strengths are and assessing whether, or not, they should really be in the leadership pipeline. Historical performance really plays a critical role in that.

Anna Sabit: We’re in the process of de-coupling performance and potential and we have different models that we use to assess both. We talk about career separately during an annual career discussion which is focused on time spent talking with the individual about their career. From a succession point of view, we can use our potential models to identify the people that we see as having future potential and, from that, we’ve created succession pipelines. We’ve done a lot of work with those individuals around their development, identified interventions and introduced strategic career plans where appropriate.

Tracey Wilson: On a day-to-day basis, performance management is one of the ways that we understand and keep track of how people reach their goals. For longer term career development, we’ve moved away from using a nine box talent model to a talent identification approach. This helps us understand the potential that people have to progress their career in the bank so that we can support them with the appropriate development.

David Hargrave: I think it’s worth turning this upside down a little bit. Thinking about it from what the business needs; the types of skills that are going to be needed in the next two, five or ten years is important. In developing an approach to managing performance, we need to be thinking not only about delivering for the employee but also delivering for the organisation. I think you can look at it both ways; from the individual employee and upwards, you can also look at it from the top downwards from a more strategic perspective.

How can performance management more effectively support career development and how do you make career growth and advancement a top driver of engagement and retention?

Angel Hoover: The important part of this is that career advancement is one of the top three engagement and retention drivers globally. Organisations really have to do this well if they want to hold on to their high potentials and limit regrettable turnover. An effective manager has the most influence over career growth and advancement for an employee, but they also need the supporting tools and infrastructure. I am a big believer that Performance Management, in its traditional form, is broken, but it is important to the organisation. It’s the managing performance part of it that’s really important. It’s not the programme, it’s what we do and the impact that it makes and that then gives us the platform for this really critical driver of both engagement and retention and how someone can manage through their career. It enables good feedback discussions which then allow an individual to understand what their opportunities are; it leads to conversations about potential for succession opportunities and the next one to two jobs so, to me, this is a really critical thing and organisations are having really good discussions about this and trying to sort through where it is they start.

David Hargrave: I think transparency is key. Organisations are really good at hiding career opportunities even though they exist. How do you navigate your way through the organisation and find out what opportunities are there? You talk to your manager, they have their experiences to draw upon but they don’t know the opportunities that exist outside of their sphere. Technology is certainly one way to enable a better career management experience and to help surface new opportunities.

That’s a sure-fire dis-engager isn’t it? I think it’s a mandatory part of the transparency that all business on all levels are having to adopt as a proper culture. Aligning PM with success.

Angel Hoover: Some organisations are getting important feedback from employees that “it’s not quite right yet, there’s still some work to do.” We’ve talked about today; the need to create a Performance Management system that is agile in meeting the needs of the different populations in your organisation, including employees at different points in the lifecycle, different geographies or even cultures should be celebrated when employees across these dimensions say “yes, this is working for us”.

In terms of the positive messages of people’s careers, are people feeling like they are being well looked after in terms of their career progression?

Tracey Wilson: We ran market stalls hosted by business areas across the bank to help people identify career paths and highlight roles they might not have thought of. There were also spotlight sessions including a Senior Leaders’ panel where leaders answered questions about their careers and career development sessions providing advice on networking, personal branding and building a PDP. We’ll look to do more and build on these in 2016.

Joanna Charlottes: Something we are doing is looking at how we can better leverage strengths within our performance development conversations. At the moment we have an equal weighting on strengths and development areas but we’re actually piloting something at the moment where we are asking people to think about what their strengths are and how they could better utilise them.

The future of performance management. Who’s getting it right and how do we ensure the process yields the business impact it was always meant to produce for now and in the future.

Tracey Wilson: In the future, it would be great if performance management isn’t talked about but is simply part of the daily interaction between line managers, employees and peers and a rhythm of delivering great business performance.

Tom Nash: Agreed, it’s about being courageous and having honest conversations, not just in the employee and manager relationship. I’d love to see the world of work more open to having those performance conversations as and when, not just in formal situations.

Anna Sabit: I think Tesco made a fundamental shift a couple of years ago in terms of Performance Management, where we started to look at the ‘what’ and the ‘how’, and that was a huge paradigm shift for us. So the changes that we are planning on making will be an evolution of that. Whatever we do this year has to be sustainable and it has to stick around for a long time because I think processes get undermined if we bring in changes year-on-year.

Joanna Charlottes: It’s really important that performance development is seen as much more of a core business process. I’m not trying to do myself out of a job but it shouldn’t be an HR process, it should be something managers and colleagues truly value and dedicate sufficient time to. Continuous feedback is also really important, but often hard to achieve as often people get defensive when hearing the word ‘feedback’. So it’s about how can you get a continuous feedback culture without actually using the words “continuous feedback”! Thinking about how it just becomes the natural rhythm of every day work.

David Hargrave: Having the infrastructure on which to hang talent and reward programmes in the first place is vital, as is thinking about integrating the programmes to ensure they are optimised and deliver a compelling employee experience. And having managers who are skilled and have the will to manage performance is key, and finally, the frequency of performance conversations is tending to be more often, and that brings a focus on managers to spend more time on the most important part of their role. I think that once you’ve got the infrastructure and you’ve got integration, you’ve got managers who are empowered to make those types of decisions.

Angel Hoover: The term best practice is a really slippery phrase. There isn’t a silver bullet; one size will not fit every organisation. When I consider best practice for Performance Management, it’s about looking into the future. It is about shifting the conversation to be one that is forward-looking, less about what’s already happened, and more about how to help an employee utilise and leverage each strength in a more active and deeper way. It’s about helping the employee get experience in areas where skills are not yet built, but are needed to become a ready-now successor for a future role. If we do that, performance management discussions become a much more inspiring conversation, rather creating anxiety and unintended disengagement. Best practice in the context of Performance Management, is really about looking forward, and making a meaningful business impact in an effective and efficient way that inspires the next leader to stay.

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