Performance management frameworks are one of the most pervasive HR programs – every organization has one (i.e. annual review only and one-way feedback) or they’ve swung too far in the direction of agile practices (i.e. no annual review or performance rating). This results in employees suffering from substandard people management practices, as there are no guardrails to ensure people leaders are doing their job properly.
If there was a simple, all-encompassing solution, this would not continue to be a challenge for so many organizations. But the reality is that there is no one-size-fits-all approach to effective performance management. Every organization has its own culture, structure, strategy, etc., which means that every organization needs a customized performance management framework to suit their specific context. With work-from-home and hybrid working arrangements likely continuing in the foreseeable future, the need for customization has never been greater.
To create an effective framework, organizations need to customize the following performance management building blocks
- Goals: Establishing expectations and desired outputs. There are two types of goals: performance goals, which can be based on role expectations, new/existing projects, process improvements, team performance, etc.; and development goals, which focus on an employee’s development in their current role or their career progression.
- Competencies: The knowledge, skills, and attributes required in the pursuit of goals. Goals are what employees achieve, and competencies are how they achieve those goals. Competencies play a critical role in reinforcing an organization’s desired culture. McLean & Company has resources on how to Develop a Comprehensive Competency Framework, including a Comprehensive Competency Library.
- Process: The series of actions, steps, and timelines that define the performance cycle. Determine the appropriate cadence of formal check-ins (e.g. monthly, quarterly) and whether an annual review is appropriate or not given the organizational context.
- Feedback and Coaching: Performance conversations between managers and employees. This is the most important building block, yet for many managers feedback and coaching is the part of performance management they struggle with the most. Challenges with feedback and coaching have only been exacerbated by the pandemic and work-from-home, as managers are either having fewer touchpoints with their employees or micromanaging their employees to the detriment of having robust performance conversations. McLean & Company has training resources to help upskill managers, including Foster Effective Feedback Skills and Train Managers to Coach Employees for High Performance and Development.
- Crowdsourced Feedback: Performance feedback from anyone other than an employee’s reporting manager, also called multi-source feedback. This building block enables employees to receive multiple inputs into how they are performing (e.g. from peers, managers they don’t report to), decreases biases inherent in single-source feedback, and provides an opportunity for frequent and timely feedback. This is optional as managers must already have adequate feedback and coaching skills so crowdsourced feedback isn’t viewed as managers abdicating their people leadership responsibilities, and there must be a culture of trust and openness for this building block to be effective.
- Ratings: Evaluation system used to categorize employee performance. This is also optional, as organizations must first determine whether ratings align with organizational programs and practices. If ratings will be used, don’t use forced rankings or bell curves as neuroscience shows they stifle healthy competition and innovation. If ratings will not be used, think through how talent management and total rewards decisions will be made in their absence.
For additional tools and research to help you customize a performance management framework for your organization, see McLean & Company’s research on how to Modernize Performance Management, Adapt Performance Management for Teams, and the Performance Management Catalog for Wide Spans of Control.
By: Rachel Stewart