Exceptional Performance By Design

The debate on the value of traditional performance appraisal programs has been going on for many years. Based on a Gallup survey, only 14% of employees strongly agree that their review inspires improvement of their performance, yet the overall costs of the annual review process can range from $2.4 million to $35 million a year in lost working hours.* Given the sizeable investment, it is important to ensure that your company’s review program effectively promotes engagement, inspires exceptional performance, and contributes to organizational success. 

To Change or Not to Change?

With years of negative feedback from leaders and employees alike and questionable return on investment, many companies opt for performance management programs that shift the focus from past to future performance. For instance, companies like Deloitte, the Gap, and Adobe have long decided to change from the traditional approach to ongoing development discussions. Many other companies have joined the ever-growing list. Given the current economic challenges and competition for top talent, companies should continue to focus on this crucial business issue. 

By design, performance management programs emphasize actions that will position the company for future success. When well designed and executed, performance management programs provide alignment and a shared understanding of company goals and success measures for each division, department, team, and employee. The emphasis though, is on the design, and each stage of the process should be critically reviewed and analyzed to ensure transparency and process clarity at all levels. I recommend that you also check the process for any potential bias areas in the design and make modifications if needed. Regardless of your process approach, plan to regularly analyze your program to ensure that it effectively delivers equity and fairness for all employees, promotes positive morale, engagement, and retention, and ultimately supports the company’s success in the marketplace. 

Feedback is an important component of any effective performance management program. Continuous, productive feedback can minimize surprises, unnecessary conflicts, and promote timely discussions and opportunities for development, which can boost morale, retention, and strengthen work relationships. 

Although regular feedback is essential to ongoing employee development and execution of the review process, this step tends to be challenging for many managers. Some managers tend to provide harsh, overly critical, or vague feedback that creates undue tension and conflict. Others, fearing conflict, may avoid feedback meetings altogether. According to a global survey by OfficeVibe.com on the State of Employee Engagement, 32% of employees say they have to wait more than three months for their manager’s feedback. Despite this, employees want to receive feedback based on the survey, with 96% saying that feedback is a good thing and 83% wanting feedback regardless of whether the feedback is positive or negative. Given the importance of feedback, managers should consistently hold feedback discussions with their employees and get the training they need for leadership success.

Competency Management Programs

To support your current review process, consider including a streamlined competency management program if this is not already a part of your performance management program. Unlike traditional competency programs that often include cumbersome frameworks and models with numerous levels and competency libraries that are often confusing and time-consuming, the streamlined model approach contains all relevant information for each role in one location. Streamlined competency models can enhance the review process by clearly defining critical competencies required to successfully perform in a role (knowledge, skills, experience, other behaviors -KSAOs). With this level of transparency, employees can take the lead to manage their development. In turn, managers can focus on managing employee performance and provide guidance on the employee’s development goals. 

Given current economic and workforce challenges facing businesses right now, your performance management program must provide an acceptable return on your company’s investment of time, money, and resources. Take immediate action to design or upgrade your performance management program to ensure it effectively contributes to organizational success and promotes engagement and exceptional performance by design. As businesses grapple with the challenges of a mostly remote workplace, due to COVID-19, this decision cannot be more essential to support the retention of key talent and meet established business goals. For more information or for real-world, experienced support to help you design a competency management program, or upgrade your performance management program, contact the ONCourse Global Team! We help you keep your business, team, career, and life goals on course for success!

*Based on large organizations of 10,000 employees.

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