Performance Trends: Focus on Outcomes, not the Process

Sharlyn Lauby, President, ITM Group
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Performance. No topic seems to generate so much controversy as the subject of employee performance. Especially when it comes to how to measure employee performance. Thought leaders everywhere have asked if it’s time to scrap the performance appraisal.

Before abandoning the traditional performance appraisal process, organizations do need to think about how they currently measure performance and what a new performance metric might look like. During SilkRoad’s Connection Conference, a group of human resources professionals discussed how performance was measured in their organizations. It was a very interesting conversation.

One thing was clear: companies need to figure out why they conduct performance appraisals.

There are many reasons to conduct performance appraisals: document current performance, award merit increases, set goals, etc. And those reasons could vary by company. But simply eliminating the performance review doesn’t fix the issue of measuring employee performance.

There’s no human resources rule that says performance reviews can only be conducted once a year. That being said, I do realize the term “performance appraisal” has developed an incredibly negative connotation. Having more of them might be considered cruel. However, companies that are abandoning the performance appraisal and in its place creating “formalized touch points” aren’t really eliminating the performance appraisal. It’s just a shorter discussion, happening more often, using a different name.

Shuffling paper doesn’t add business value

There was consensus among human resources professionals at the SilkRoad conference that HR needs to be the in-house talent expert and able to react to the needs of the business in real-time. To do that, human resources departments should make it their mission to eliminate roadblocks and facilitate conversations. That’s how HR contributes to performance.

One person noted, “We cannot be trusted advisors and coaches if we’re shuffling papers. It’s the conversations that matter and really impact performance. Creating alignment between performance and the business allows us to have better conversations with our management team. Our focus is on the outcomes and not the process.”

Download “Calculating the ROI of Employee Performance Management Systems.”

Automate strategically

When it comes to eliminating roadblocks, we’re not talking about simply taking a paper process online. During the discussion, Jimmy Hodson, senior business analyst with SilkRoad, shared a startling statistic. According to the U.S. Small Business Administration, the average business owner spends approximately 25% time handling employee related paperwork. So, if you work 40 hours a week (and who really does that these days) then 10 hours is spent on employee-related paperwork. Even when you automate part of those functions, it will not give you all 10 hours back. Let’s say you get 8 hours back. Think about what you could do with an extra day. You might actually work fewer hours and get more done!

The example above isn’t about process. It’s about effectiveness. We all know that everything cannot and should not be automated. For instance, corrective action. How do you have an automated disciplinary conversation? Would that take place over a computer? It might would create a hindrance to the conversation and ultimately to the outcome. Performance is about managers being able to use their time strategically.

Focus on the conversation

Speaking of manager’s time, organizations need to examine if the reason they have such onerous performance review processes is because managers aren’t trained to give constructive feedback.

Is it possible that managers are clinging to pieces of paper because the paper provides comfort? That’s not being effective. In fact, that’s being incredibly ineffective. And if your organization is frustrated by all the formality, process and paperwork…then this is the last thing you want. Managers need to know how to provide performance feedback.

Focus on the right metrics

No company should expect employees to stay with them for 30 years. The traditional career path is gone. Organizations today should understand that people will move on and take pride in the alumni.

Smart companies realize it’s possible employees will want to return. But that only happens if the relationships was good.

Good relationships happen when managers spend time talking with employees. Managers spend time talking with employees when they’re not buried in paperwork. Human resources makes sure that processes are strategically automated to reduce paperwork.

The metric is investment in talent versus business outcomes. Performance conversations are about the work. Our work goals are about winning in the business.

Download “Calculating the ROI of Employee Performance Management Systems.”

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