Human Capital Management Blog

Strategies for HCM Professionals

Are you ready for a performance management transformation?

employee benefitsA key part of any business’ strategy for managing human capital should be its approach to performance management. Once you’ve brought talented people on board at your company, the next step is to follow up regularly, monitor their progress, ensure they’re acclimating well and make adjustments if necessary. Opinions vary, though, on specifically how to do this.

The old approach to PM is a fairly rigid one. Traditional companies operate on a fixed schedule and use a straightforward approach to evaluating their employees that depends on surveys, rankings, scores and so on. This paradigm has existed for decades, and it can be difficult to let go. In fact, there are some companies that still stick with it. Others are rethinking the process, however.

Where does your organization stand on this spectrum? Is your approach to PM more on the traditional side, or are you willing to make a change and try a more creative strategy, focused on performance development instead? And, more importantly than just being willing, can you actually pull it off?

The great divide on performance management
It’s worth noting that there’s a big difference between wanting to transform performance management and actually doing something about that desire. According to Human Resource Executive Online, that gap is even wider than we feared – the news source recently published the results of a survey from Accenture Strategy finding that 77 percent of companies want to make changes in PM but only 34 percent are actually doing so.

Deborah Brecher, an Accenture managing director, told HRE Online that the problem is how deeply ingrained so many companies’ performance review methods have become. When you’ve been doing something the same way for 30 or 40 years, for instance, it’s extremely difficult to change course.

Dismissing the rigid statistical approach
One of the major changes that many companies are hoping to make is to get rid of rigid statistical systems that don’t take a nuanced view of employees’ progress. For example, General Electric once had a “forced rankings” system in which all employees were ranked based on certain survey metrics and the bottom 10 percent were automatically fired.

This is an extreme example, but even if your company is only somewhat reliant on scores and stats, it might be time to make some tweaks. Brecher told HRE Online that rather than define people using numbers, the preferred strategy nowadays is to nurture employees using constructive feedback rather than stats.

Culture is a key focal point
Ultimately, what we’re really talking about here is transforming the culture of today’s organizations. Under the old performance management model, people were obsessed with their ratings and working under a great deal of pressure every day – understandably so. That’s no way to guide your people to their full potential. Only moving from a focus on performance management to performance development can do that. 
The ratings can wait – what’s really important is genuine growth.

Join us for one of our related conference sessions at INSIGHTS 2016 in Las Vegas (July 11-15)!

  • DF144 Global Brass & Copper – Fuel Performance Development with Dayforce HCM
  • PD101 Talent Development at High Performance Organizations

Leave a Reply

Your email address will not be published. Required fields are marked *

Follow @Ceridian on twitter.