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Modernize Performance Management

The traditional performance management model doesn’t work – shift to an approach that’s tailored to your organization’s context.

  • Many organizations believe that ditching ratings and the annual review in favor of an agile approach to managing performance that focuses on continuous goal setting and feedback is the solution.
  • However, research shows that agile is not the cure-all to employee performance management that many hoped it would be. Getting rid of ratings doesn’t get rid of the need to evaluate performance, and an agile approach is not necessarily easier for managers and doesn’t suit every context.

Need Extra Help?
Speak With An Analyst.


  • Get on-demand project support
  • Get advice, coaching, and insight at key project milestones
  • Go through a Guided Implementation to help you get through your project

Our Advice

Critical Insight

  • Ditching the annual performance review for agile practices won’t necessarily solve performance management problems.
  • Customize the building blocks of performance management to best fit organizational needs to impact individual and organizational performance, productivity, and engagement.

Impact and Result

  • Foster effective performance management by selecting and customizing the following building blocks to meet your organization’s needs: process, goal setting, competencies, feedback and coaching, crowd-sourced feedback, and ratings.
  • Train managers to provide employees with high-quality feedback and coaching to improve all other aspects of performance management.


Performance Management

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How to complete this course:

Use these videos, along with the Project Blueprint deck above, to gain an understanding of the subject. Start with the Introduction, then move through each of the Course Modules. At the end of each Module, you will be required to complete a short test to demonstrate your understanding. You will complete this course when you have completed all of the course tests.

  • Number of Course Modules: 6
  • Estimated Completion Time: 1.5 hrs

Learning Outcome

Learners will develop the potential structures and building blocks for modern performance management.

Learning Objectives

By the end of this course, learners will be able to:

  • Evaluate the current state of their organization’s performance management framework.
  • Identify the building blocks of performance management and tailor them to organizational culture and strategy.
  • Align HR processes with modern performance management best practices.
  • Develop communication, change management strategies, and training to successfully transition to a modern performance management framework.

Course Modules

Now playing

Performance Management - Introduction: Shift to a performance management approach tailored to your organization

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Performance Management Module 1: Prepare to change the PM framework

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Performance Management Module 2: Design the mandatory elements of a PM framework

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Performance Management Module 3: Design the optional elements of a PM framework

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Performance Management Module 4: Align related HR programs

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Performance Management Module 5: Communicate and train to manage change


Workshop: Modernize Performance Management

Workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn't enough, we offer low-cost delivery of our project workshops. We take you through every phase of your project and ensure that you have a roadmap in place to complete your project successfully.

Module 1: Prepare to Customize the PM Framework

The Purpose

  • Assess the current state of the PM framework and identify challenges, goals, and metrics.

Key Benefits Achieved

  • Current-state assessment across PM building blocks
  • PM goals and metrics identified
  • Changes identified to PM process

Activities

Outputs

1.1

Assess the existing PM framework and identify challenges.

  • Current-state assessment
1.2

Define the organization’s PM goals and metrics.

  • Goals and metrics
1.3

Tailor the PM process.

  • Tailored PM process

Module 2: Customize the PM Framework

The Purpose

  • Clarify the approach to goal management competencies and feedback and coaching.

Key Benefits Achieved

  • Approach to goal management defined
  • Role of competencies in PM identified
  • Feedback and coaching activities selected

Activities

Outputs

2.1

Clarify the approach to goal management.

  • Goal setting, competency, and feedback and coaching building blocks customized
2.2

Define the role that competencies will play in PM.

2.3

Assess current feedback and coaching activities.

Module 3: Customize the PM Framework

The Purpose

  • Determine the role of crowdsourced feedback and ratings and calibration meetings.

Key Benefits Achieved

  • Role of crowdsourced feedback determined
  • Rating scales are developed
  • Plan for calibration meetings established

Activities

Outputs

3.1

Determine whether crowdsourced feedback will be used.

  • Crowdsourced feedback and ratings building blocks customized
3.2

Determine if ratings will be used and develop a rating scale.

3.3

Plan for calibration meetings.

  • Approach to calibration defined

Module 4: Align New PM Framework

The Purpose

  • Evaluate the alignment of HR practices with PM and confirm accountabilities for key stakeholders.

Key Benefits Achieved

  • Plan for alignment with HR practices established
  • Stakeholder accountabilities confirmed

Activities

Outputs

4.1

Evaluate the alignment of other HR practices with PM.

  • Action items to align HR practices with new PM framework identified
4.2

Confirm key accountabilities for key stakeholders.

  • Stakeholder accountabilities confirmed

Module 5: Next Steps and Wrap-Up

The Purpose

  • Plan to respond to pushback and customize performance review and PIP template, and develop a communication plan.

Key Benefits Achieved

  • Plan to respond to pushback established
  • Performance review and PIP template customized
  • Action and communication plan drafted

Activities

Outputs

5.1

Prepare to respond to pushback.

5.2

Customize performance review and PIP templates.

  • Customized performance review and PIP templates
5.3

Develop an action and communication plan.

  • Action and communication plan created

Modernize Performance Management

Traditional performance management doesn’t work – shift to an approach that’s tailored to your organization’s context.

Executive Summary

McLean & Company Insight

Ditching the annual performance review for agile practices won’t necessarily solve performance management problems. Customize the building blocks of performance management to best fit organizational needs to impact individual and organizational performance, productivity, and engagement.

Situation

  • The traditional approach to performance management (PM), characterized by annual performance reviews and infrequent feedback, is ineffective in today’s increasingly fast-paced environment.
  • Traditional PM negatively impacts the entire organization through lower productivity, performance, and engagement.

Complication

  • Many organizations believe that ditching ratings and the annual review in favor of an agile approach to managing performance that focuses on continuous goal setting and feedback is the solution.
  • However, new research shows that agile is not the cure-all to performance management that many hoped it would be. Getting rid of ratings doesn’t get rid of the need to evaluate performance, and an agile approach is not necessarily easier for managers and doesn’t suit every context.

Solution

  • Modernize performance management by selecting and customizing the following building blocks to meet your organization’s needs: process, goal setting, competencies, feedback and coaching, crowdsourced feedback, and ratings.
  • Train managers to provide employees with high-quality feedback and coaching to improve all other aspects of performance management.

It’s time to move away from traditional performance management (PM)

Traditional PM

  • Annual performance review
  • Goals reviewed once per year
  • Review is backward looking
  • Ratings used to determine compensation

We’ve known for more than 50 years that this approach doesn’t work – yet we keep using it!

A landmark study in 1965 found traditional performance reviews at General Electric to be largely ineffective (Smith et al.).

Traditional PM is ineffective because:

It’s a poor performance driver.
  • Feedback is too infrequent and focused on the past to meaningfully guide performance.
  • Annual reviews can decrease employee performance and engagement (Caprino, Duggan).
Annual reviews don’t suit today’s work context.
  • Just as organizations wouldn’t measure revenue only once a year, it does not make sense to assess employee performance on an annual basis.
  • Annual reviews are often biased toward the few months prior to the review and fail to accurately capture employees’ performance over the full year.
Feedback can be biased and subjective.
  • For example, women are 1.4 times more likely to receive critical subjective feedback than men, as opposed to positive or critical objective feedback (Cecchi-Dimeglio, 2017).
  • This can lead to disputes over ratings, disengagement, and turnover.
Modernize Performance Management preview picture

About McLean & Company

McLean & Company is an HR research and advisory firm providing practical solutions to human resources challenges via executable research, tools, diagnostics, and advisory services that have a clear and measurable impact on your business.

What Is a Blueprint?

A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your HR problems.

Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.

Need Extra Help?
Speak With An Analyst

Get the help you need in this 4-phase advisory process. You'll receive 6 touchpoints with our researchers, all included in your membership.

Guided Implementation 1: Prepare to change the PM framework
  • Call 1: Review the PM building blocks and prepare to assess current state of PM.
  • Call 2: Review results of current state assessment and identify focus areas.

Guided Implementation 2: Design the PM framework
  • Call 1: Discuss how to customize PM building blocks in alignment with organizational need and capability.
  • Call 2: Review building block customizations and identify potential challenges.

Guided Implementation 3: Align related HR processes
  • Call 1: Determine integration of HR processes and the PM framework.

Guided Implementation 4: Communicate and train to manage change
  • Call 1: Create an action and communication plan and confirm stakeholder accountabilities.

Contributors

  • Andrew Bartlow, Head of HR, Waypoint Homes
  • Sharon Bishop, Director, Workforce Planning and Development, Regina Qu’Appelle Health Region
  • Jan Hills, Partner and Author, Head, Heart & Brain Consultancy
  • Melanie Jacobs, Manager, Learning and Development, Sappi
  • Cindy James, Director – Organizational Development, Elbit Systems of America
  • Jeremy Janzen, CHRO, HyLife
  • Suzanne Lahache, GM of Human Resource Preparedness, Mohawk Council of Kahnawà:ke
  • Ashley Lundquist, VP of People, LeadPages
  • Maura Parda, Executive Coach and Organizational Change Strategist, 512 Leadership Group
  • Megan Paterson, Vice President of HR, Kinaxis
  • Kerry Pletch, CHRO, City of Guelph
  • Michele Vogt, Acting Vice President, People and Safety, Regina Qu’Appelle Health Region
  • Minna Whitman, Manager of Learning and Employee Development, HRG Worldwide
  • Sarah Wilson, Director, Talent Acquisition, Performance Management & Principal Staff Officer, Indigo