Performance management is fast becoming an integral part of every company’s business strategy. Having workable and effective processes in place to manage and measure your employees’ performance is no longer a HR nice-to-have: it’s very much a business got-to-have. In this short video, Sarah Moore, Laura Hinton and Anthony Shields from our Human Resource Consulting team discuss the growing importance of measuring your employees’ performance. They talk about ways to engage with your people, make the right decisions on reward and check that you’re meeting the goals and objectives of the organisation.
Performance management is a hot topic in the UK and globally and we’re seeing our clients, within their organisations, looking at how they can be really clear about their business strategy and look at how they can maximise performance from their employees. Laura, Antony, do you agree?
Yeah absolutely, I think there are a lot of organisations out there who are grappling with their performance management approach. Whether that’s from a technology perspective, whether it’s the process, whether it’s “are we really able to measure the ‘how’ as well as the ‘what’?”
I think where most organisations have had traction is being really clear on the business case so rather than it being an HR ‘nice to have’, being really clear there is external pressure, there’s regulatory pressure, there’s feedback coming through from an engagement perspective but something around performance management isn’t particularly working at the moment, so lots of organisations trying to focus on what isn’t working and how can we ultimately drive better business performance.
And I understand that there is an increased focus on values and behaviours from employees – tell me a little bit more about that.
I think that is driven from a number of perspectives. Again that regulatory pressure is really key here, financial services is a good example, external pressure to really demonstrate that organisations are focusing on the culture, that they’re embedding values within their organisation and they’re ultimately rewarding the right behaviour. So, performance management has traditionally been a bit of a tick box exercise, a process that an organisation goes through once a year to focus on well, what did you do this and how should you be rewarded? I think values and behaviours are becoming probably the most critical element in a new performance management approach. So you know, are the values consistent with the organisational goals, and what does an individual need to do and how will we know that they’ve demonstrated those behaviours, how is it measured, how are they embedded in individual objectives?
I would agree with that and I think the Financial Conduct Authority, the FCA, here are demanding that. So technology has a role here to play in that reporting, frankly, on those competencies and behaviours. We only need to look at the banking industry to see obvious reasons why that needs to be reported in the right way back to those authorities.
It’s quite a hard thing to encourage people to change though, so if you take any organisation and the range of roles within it, how can you channel down to each individual what they need to do so their performance is in line with the strategy and the values of the organisation?
I think the first thing is to make the strategy relevant to an individual or to a business unit or to a team, which sounds obvious but actually it’s quite hard to do. As an individual sitting a few levels down within an organisation, are they even aware of the strategy and if they are can they articulate it in a way that makes it clear what they can individually do to help that organisation meet that strategy. And I think the best way to do that is through a conversation with line managers, through relationships of really understanding, what does it mean for me? That helps engagement, because it gives individuals a sense of purpose, but actually it makes sure that once you’ve got a clear process and system around setting objectives, those objectives collectively are heading the right direction and will deliver the strategy at the end of the day.
I completely agree and technology has an enabling role here. There are some fantastic new technologies that are deployed in different ways using the Cloud, using Software as a Service, a new way of deploying that software, so tools like Workday, Oracle Fusions, Success Factors, provide a good platform but it comes back those fundamentals. If you’ve got a very intuitive fantastic new performance management system, but you’ve got line managers that are not enabled to have those conversations, you know, you’re not going to get the benefits of that investment.
And I’ve heard people talk about software being a barrier to a really good performance management conversation, you know ‘I wanted to give the feedback but the system wouldn’t let me in’. What’s your view on that?
Well I think what’s different now with some of the technologies that are available is that they are more intuitive frankly, and adoption has always been an issue. So many organisations struggle with users and line managers just understanding how to use the system. The more you can simplify that then frankly that takes the problem away, so there are some significant changes in that area. Web-based technology is making things easier, a more Google-like process to go through.
Sure, and so who are you seeing doing this well?
I think there are lots of examples actually. Interestingly, often driven by external pressure, so financial services a really good example of a sector that has had to embrace performance management and doing it in a different way, around documenting and being really clear that they are very serious about changing their values, focusing on behaviour, measuring the ‘how’ and rewarding the ‘how’, as well as the ‘what’ from an objectives setting perspective. So financial services, lots of great examples of really thinking in a very forward looking way. But other sectors who’ve got similar regulatory pressures – oil and gas, energy, utilities, mining, health and safety pressures, any organisation that’s needing to change culture – change what people do and how they do it, in a relatively short period of time, are starting to look at performance management as a key lever to making some of those changes. So some great examples of some pretty forward thinking practice.
This has been really insightful, thank you. Both of you, is there one thing that you’d like to say about performance management to leave us with before we go?
I think, for me, it’s being really clear, what is the business case, why change performance management and ultimately what impact will it have on the business outcomes to get buy in, to get support and ultimately to make the biggest difference.
For me I think from an infrastructure perspective there is a lot of great technology out there that can support that process, but again it’s an enabler to getting the fundamentals right, as we’ve been talking about it’s critical but technology can support that process.
Brilliant, that’s great, thank you
In an ever-more regulated business environment, it’s vital that your performance management processes can instil the right core values for your organisation and promote behaviours which drive your business strategy forward. Aligning performance with your overall strategy is vital. This is particularly true in more heavily regulated industries such as financial services, construction and oil and gas etc., where meeting targets are part of your governance requirements.
Having the right infrastructure in place to deliver your performance management is critical. And the expanding use of cloud-based technology and Software as a Service (SaaS) tools is helping to improve the effectiveness not just of the underlying infrastructure, but the delivery and the measurement of performance management as a whole. What’s more, it gives you the data you need to support critical decisions you make about your workforce.