Organisational success is underpinned by the performance of employees; therefore, most organisations operate some form of performance management system, often to the dismay of both managers and employees. So, why can’t organisations operate a performance management system that promotes productivity and satisfies managers and employees? From performance management to performance development A pre-COVID world began to see a shift away from the past-oriented performance management approach and moving towards a future-oriented performance development system. Such systems focus on helping employees develop new skills and competencies in order to perform their role more effectively instead of simply assessing whether employees have reached their objectives without additional guidance. COVID-19 has created the opportunity to accelerate the shift from performance management to performance development. As the majority of the knowledge-based labour market have been working from home during the peak of the pandemic, organisations have been unable to monitor employee performance in the same way; instead organisations have had no choice but to trust their employees to do their job. Performance development is based on organisations trusting employees to do their own work and enabling them to do it, whether that be through training, developmental conversations, providing necessary equipment/technology or giving praise when appropriate. From manager to coach A one-sided approach to objective setting to establishing expectations together. Performance management is typically centred on a very one-sided objective setting approach with either managers deciding what it is employees should be doing or employees setting goals with limited guidance. Either way, performance development is centred on a more collaborative approach with the manager and employee having an ongoing dialogue to establish appropriate goals and expectations together. This will ensure the expectations are realistic, achievable and flexible enough to adapt to changes in circumstances. This also fosters a more favourable relationship between manager and employee. COVID-19 has meant that employees are faced with new and unique ways of working, whilst juggling a number of responsibilities, both personal and work-related. Therefore, managers have had to take these additional demands into consideration when setting objectives and goals. This has often led to opportunities for more open conversations between managers and employees, resulting in them working together to set manageable and realistic expectations and goals. From annual reviews to frequent and open communication. Traditional performance management focused on one annual review or two, with one check-in mid-year. At this review, the objectives set the previous year would be assessed to see if employees had achieved them throughout the year. Some organisations would use this assessment to make decisions around bonus or pay increases. There is an increasing irrelevance of rigid annual objectives in the face of an uncertain environment and fast-evolving roles and organisations. Performance development, on the other hand, requires frequent communication where both employee and manager can discuss openly the expectations they established together. If a manager feels their employee is not quite reaching the expectations, this can be discussed and the manager can provide recommendations or training to help the employee reach their goals. In addition to this, a defining feature of performance development is highlighting priority areas for development with ongoing monitoring of progress to avoid any obstacles. It is important that feedback provided is not a surprise to the employee. If an employee feels they are performing well and achieving their goals but after 6 months the manager tells them they are not performing to a satisfactory level, this can create feelings of mistrust and neglect and inhibit future development. Alternatively, if a manager feels their employee is performing well, this should be communicated to encourage and motivate future development. Due to COVID-19 requiring a significant portion of the labour force to work from home, managers have had to adopt more frequent (virtual) check-ins with employees to monitor how they are progressing and coping. It is unlikely managers will be able to conduct annual reviews as it may be difficult to monitor performance in the same way. From an objective manager to a supportive coach. Typically, the manager’s role in performance management is to supervise and enforce; if the employee is not performing to a satisfactory standard, the manager will simply inform them without offering additional support. This may also have an impact on the employee’s reward. Alternatively, performance development is about the employee owning the process however with additional support from the manager in the form of developing and coaching. If the employee owns the process, this will enhance their commitment to their goals. However, there should be support from the manager to overcome any hurdles and difficulties in order to ensure the employee continues to develop. From reward to recognition Under the new and improved method of performance development, there should be no direct link to financial reward. Conversations and intentions should be solely focused on developing the employee and ensuring they are able to do their best work and continuously improve. Setting goals that will be met with financial reward detracts from what is important and may inhibit employees developing further than their set goal. If organisations do have performance links to reward, it should not be determined as a direct result of this process. Instead, there should be clear and simple criteria outlining what great performance looks like to that organisation and how employees can achieve this. Rewards can be given, but for recognition - not as a direct outcome of delivery. Now is the time to improve This highlights the importance of taking the time to reflect on what COVID-19 has taught us about our organisations and employees to improve experiences and promote productivity. Employees can be trusted to manage their own workloads without being micromanaged and forcing performance ratings on them. Now is the time to help improve, rather than hinder, their work. If you would like any further information, or the chance to discuss how we can help you shift from performance management to performance development, please contact ku/oc/gcq//hteb Beth Willrich, Junior Consultant at QCG – September 2020