The New Performance Management Mindset
Posted on 10th January 2024 at 13:11
Have you got the new performance management mindset?
Performance Management isn’t dead, but it has evolved!
For some, performance management is still synonymous with a yearly appraisal meeting; hours spent gathering evidence and testimonials from customers or colleagues to argue their corner in the hope of an above average pay rise. In organisations where there is a poor or toxic attitude towards performance, the lines are drawn for an awkward meeting where the manager has been tasked to rank their team for future potential while team members often and understandably adopt a defensive and closed mindset. The net result is that all learning, innovation, and growth is throttled out of the organisation. Another year passes and people double down on their belief that their performance management system is a waste of time and adds no value!
The good news is that there is a different and more enlightening way to manage performance! Many organisations have done away with their annual reviews and even scrapped ranking or scoring mechanisms which distract from the primary aim to stimulate organisational growth and learning. There has been a marked shift from the traditional appraisal that looks back at past performance, towards agile models that respond to the changing needs of organisations and their people in real time.
These new approaches focus more on the quality, depth, and frequency of the conversations, rather than the form filling. The emphasis is on developing the mindset and skills of leaders and managers to unlock potential and performance rather than following a one-size fits all script. Crucially, the basis of success is about ongoing communication, mutual trust and collaboration, regular check-ins, aligning personal strengths and motivations to organisation goals, using a variety of feedback or data driven insights to support learning, and focused development of skills and knowledge relevant to the tasks, project, or role.
The new performance management mindset embraces learning and development as a priority; it is future oriented and seeks out opportunities to grow the contribution people make to the organisation mission. This new mindset also recognises that employees need a more holistically focused framework of support that serves their broader life needs beyond the workplace. Physical and mental health requirements, as well as consideration of personal circumstances beyond the boundaries of work, all need attention when it comes to creating the right environment for everyone to achieve their full potential. This is a mindset that recognises people show up at their best when all aspects of their life are aligned and healthy.
Not all leaders and managers have achieved this transition in mindset. However, those who have, buy-in to the approach because of the benefits it delivers. They understand that the foundation for performance is to achieve employee engagement; a state of psychological connection between employee and organisation where the employee is fully committed to the mission. Employees feel they belong, have shared values, are cared for as a whole person, and have opportunities to learn and grow. According to research by Gallup, companies that rank in the top quartile for employee engagement are 23% more profitable than those in the bottom quartile, have 37% less absenteeism and staff turnover, 41% less product defects, and 21% higher productivity.
So, what do you need to consider when designing or revitalising your organisation’s approach to performance management?
At NP we have helped many customers navigate this challenge. Often, we find organisations want to start by redesigning their forms. The logic of this is understandable as it’s usually the absence of completed forms, or feedback that the form is not fit for purpose, that leads people to think this is the root cause of the problem. In our experience, however, the key to unlocking your performance culture is not the forms. It starts by gaining a deeper understanding of the current management mindset and skills in the organisation. By assessing your current performance management culture and co-creating a vision that clarifies the purpose, beliefs, skills, behaviours, and environment you need, you will be better able to identify and implement changes that will unlock the potential of your people and lift your organisation results to a new level.
If you’re looking to improve the performance management culture, mindset, and skills in your organisation, why not contact us for a free consultation and discover more about how we can help you on your journey.
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