Performance Appraisals: Creating a Performance Management Culture

In today’s volatile, uncertain, complex, and ambiguous (VUCA) environment, organizations need to be able to create an organizational culture that identifies challenges/opportunities, creates a plan of attack, and then measures/tracks them to make sure they are headed in the right direction. A “Performance Management Culture” ensures activities and outputs by the organization, a department, or an employee meets the organization’s goals, to address challenges/opportunities, in an effective and efficient manner.

One way to measure the individual employee in a performance management culture is with the use of a performance appraisal. Some organizations have given up on performance appraisals because they can be meet with resistance, can cause employees to become demotivated, and can even cause employees to leave the organization when they have been done incorrectly.

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When performance appraisals are done correctly, they provide valuable development and growth insight to employees that can be used to advance their careers. In order for employees to see performance appraisals (good or bad) as an opportunity for them to grow, they have to be able to see the “Why” behind the “What”. In other words, managers can’t just clobber employees with a performance appraisal once a year and think they will see the value of them. Performance appraisals have to be embedded and aligned with the overall culture of the organization to be seen by the employee as a tool for their own evolution into their future self.

This blog will focus on setting up a “Performance Management Culture” that will provide the “Why” when giving performance appraisals.

1. Organizational Goal Setting. Today, employees like to know they are making a difference and contributing to the success of their organization. Performance appraisals should be tied to the bigger goals of the organization. This will allow everyone to work toward the same ultimate goal and help create a more aligned and stronger performance management culture.
2. Communication. Transparency is the key to communication. Constant communication on any new challenges/opportunities and the progress the organization is making toward the overall goal helps remind employees “Why” they do what they are being asked to do. This is where it is nice to have monthly/quarterly “town hall meetings.”
3. Departmental/Functional Goal Setting. Many organizations suffer from “siloed” departmental goals. Departments can actually be working against each other and hinder the success of the organizational goal. Make sure departmental/functional goals are aligned with the overarching goal of the organization.
4. Individual Goal Setting. Once the organizational, departmental, and functional goals have been set the next step is to align the individual goals of the employees. Each goal set should provide guidance on how the employee can support the bigger goals of the organization. This gives a clear picture of the “Why” in the performance appraisal process.
5. Feedback & Coaching Checkpoints. Many managers look at performance appraisals as a once a year burden. If goal setting was done properly, managers should find receptive employees eager to get coaching and mentoring from their leader. Set up checkpoints throughout the year and put them in your calendar so they don’t fall by the wayside.
6. Monthly, Quarterly, or Mid-Year Reviews. Managers will often find themselves in “firefighting” mode. They are not paying attention to things that are not demanding their attention. So, when checkpoints that you set with the employee come up on the calendar make sure to take the time to sit and review what is going well and what needs to be worked on. This should be done at a minimum once a quarter but preferably once a month.
7. Provide Feedback & Coaching. Don’t wait until the checkpoints come if an employee is struggling. Give them the “What” that they need to continue to work on and the “Why” it is important to the overall goals of the department and organization when they need it. This “Just in Time” coaching is how athletes shave milliseconds off their time to create a new world record. It is part of creating a Performance Management Culture.
8. End of Year Review. This is the easy part. If everything else was done correctly, the employee should know where they stand in reaching their own goals and helping the organization reach its goals. There should be no surprises because the manager and employee have been in constant communication and reviewed the goals once a month. This is when the manager should also set the goals for the next year.
9. Training & Development. One extremely important part of creating a “Performance Management Culture” is emphasizing the need and importance of continual development. Training goals can be added to the goal section of the annual review. This helps to imbed a growth mindset into the culture of the organization. Training and development for career growth show employees they are being developed.

In today’s volatile and uncertain world, a “Performance Management Culture” ensures an organization’s goals are met. Employees working in this type of culture can buy into the “Why” of continual growth and the performance appraisal as a tool to set goals to add value to the organization. Be intentional in setting up a Performance Management Culture and your organizations will thrive in this ever-changing world.

Interested in learning more, join us for a complimentary 1-hour webinar, Leading Effective Performance Appraisals, on October 14, 2020, at 9:00 AM.