Reward insight
Is 2017 the time to check-in?
Chris Kerridge and Neil Tonks, from MHR’s product design team, discuss a new form of performance management
T he process of reviewing the performance of staff is often considered the most disliked management activity, both by line managers and their reportees. This is due to mutual reservations about whether or not performance management, and especially annual performance appraisals, are effective; not to mention the potentially tense environment that can arise if views on performance differ between employee and manager. Performance management can be a particular challenge in a payroll environment. The nature of payroll is that the work is often quite repetitive and also tightly managed, since employees need to be paid regularly and correctly so firm management is a necessity. The use of a formal and infrequent appraisal process in such an environment can result in every interaction an employee has with their manager being a structured, disciplined process and can be rather demotivating. A recent survey by insight and Development, indicated that 4% of human resources leaders feel performance reviews are effective, while 42% said significant overhaul is needed to improve their current review process. The study involved more than 9,000 managers and employees across eighteen countries. It revealed that an average business spends around 43 hours each year per employee on activities such as goal-setting and performance evaluation, along with related tasks such as preparing for reviews. The cost and time involved has led some organisations to abolish performance ratings altogether. However, the report found that this led to productivity dropping significantly. Additionally, it found those who technology firm CEB, reported by the Chartered Institute of Personnel and
worked for organisations that had scrapped performance ratings scored their interactions with their managers 14% lower on average. ...43 hours each year per employee on activities such as goal-setting and performance evaluation... The business reasons behind performance management are both simple and sound: align the employee objectives and behaviours with business needs, and evaluate the achievement of those objectives and overall employee performance fairly. However, performance management is much more than simply setting objectives and monitoring the achievement of those objectives. A barrier to good performance management is the wider culture of employees and managers not liking the practice of monitoring and talking about performance, which can impact on the value of the process itself. These difficulties have resulted in performance management as a business process and concept currently being in the midst of a major change. Many companies such as Deloitte and Accenture have moved away from conducting an annual performance review or appraisal because, in their evolution as an organisation, they have come to realise that this is not the best practice to boost employee productivity and morale. Instead, they are moving to a process of real-time feedback and check-ins. A check-in is a short but regular conversation between an employee and their manager. The aim is to effectively
engage and manage performance without the formality of an annual performance review. Check-ins are sometimes held to a schedule, but often can be initiated at any time by both the employee and their manager. Good managers have never waited for an annual event to raise concerns or offer praise and encouragement, and in a sense check-ins are simply extending this process to all managers. Carried out diligently, it feels more akin to a coaching process than a performance management process. During 2017 we will see more organisations shifting towards real-time check-ins to enable managers to focus on having good conversations with their employees. Exploring their roles, career development and career agility with an emphasis on looking forwards, rather than backwards. Having those conversations will not only make the employee feel valued and support their potential to develop but will also increase employee engagement. Furthermore, it allows the employee to take ownership of their professional development as they can request check-ins with their manager without having to wait for the annual performance reviews to discuss and review their career development. Despite overwhelming frustration with appraisal systems, they are here to stay. However, managers will have to take on new ways of designing these systems or using new systems to move beyond administrative processes to business impact. The most successful organisations will focus on strengthening the performance
culture to embed performance management behaviours such as
feedback and coaching into the day-to-day work rather than crafting it as a separate and administrative process. n
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Issue 31 | June 2017
| Professional in Payroll, Pensions and Reward |
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