When it comes to performance management, organisations no longer just look at what employees do. They also look at how they do it. How do people behave? How do they demonstrate the company’s values?
Too often, organisations leave it to line managers to assess team members’ performance. The problem is that one manager’s view on someone’s behaviour or interactions can be very different from another’s. While the traditional yearly review might seem easier for HR departments, it isn’t always the most consistent or fair way to review an employee’s progress.
Minimising Bias
Without guidance, the performance management process is completely subjective. Instead, we need to define what it looks like to demonstrate desired behaviours well—and what it looks like when someone needs to improve.
When we define our behavioural competencies clearly and offer these definitions to managers, this creates more consistency by ensuring they assess people within their team using the same criteria. Of course, there’s going to be some level of subjectivity because people are different. What we want to do is minimise this bias and subjectivity as much as possible.
Reflecting Culture & Values
Identifying the behavioural competencies that align with our desired culture is crucial. Values and behaviours are more than just words on a poster or in an employee handbook. They should guide everyone’s way of working and give employees a sense of purpose.
Creating a culture of trust that prioritises individual progression will create more impact than annual conversations alone. This also helps to remind employees that performance management is more than just a tick-box exercise.
Pay & Reward
In a lot of organisations, pay is linked to performance. We assess an individual’s performance over the past 12 months and reward them accordingly for the future. We acknowledge their achievements in the previous year by granting them an ongoing pay increase.
We’re looking at the past to reward for the future.
We base this approach on the belief that past performance is a reliable indicator of future performance. However, there’s a lot of data out there that tells us otherwise. Outstanding performance in the last year doesn’t necessarily lead to exceptional future performance, and it can fluctuate significantly. This is partly because performance is dependent on so many different factors.
On the other hand, behaviours are a much better predictor of future performance. While outcomes can fluctuate from year to year, behaviours tend to be more consistent. Individuals who consistently demonstrate innovative, leadership, or collaborative behaviours are more likely to deliver consistent performance in the future.
That’s why incorporating behavioural competencies into pay structures can be a useful tool. It not only promotes fair and consistent performance management but also allows for the development and progression of these competencies within your pay framework.
Identifying Skills Gaps
By focusing on behavioural competencies, you can establish consistent standards across the organisation. This means that employees are aware of the expectations they need to meet and can work towards achieving them. Training opportunities can then be tailored to each individual, giving them the opportunity to develop their skills and knowledge in line with their role.
By introducing a competency framework into your performance management process, you can ensure that employees understand what behaviour is expected of them and how they should apply this to their daily tasks.
This helps to create an environment where employees feel comfortable discussing issues or concerns, enabling them to work together more effectively towards shared objectives.
Conclusion
The goal of performance management is to help employees perform at their best and understand how to progress in their careers. This is achieved by holding employees accountable for their actions and identifying opportunities for growth. By having a clear understanding of what constitutes good performance, poor performance and everything in between, it becomes easier to evaluate employees and make necessary adjustments.
It’s important to remember that performance management is not just about rewarding and recognising individual achievements. It also helps in developing the right behaviours and improving the overall company culture.
The good news is that well-crafted performance management systems achieve many things. Using a consistent and fair method will improve employee engagement, foster a work environment that values diversity and inclusivity, and instil a strong sense of corporate identity.