For many organizations, as the new year begins, performance-management processes kick in.
When people think about performance management, they’re rarely enthused! The response to performance planning is typically neutral, at best.
My experience with clients is that their current performance-management systems are not as relevant to real work and real opportunities as they could be. Performance management today is typically not about developing new skills and greater contribution. Performance management is a “have to do,” so it’s done without enthusiasm.
In one job I had years ago, performance planning consisted of the boss giving each one of his six team members a photocopied list of the goals we were to put into our performance plan for the year. Our roles and responsibilities widely varied, but our boss wanted us to put in the exact same five goals. We put in what he told us to put in, and his bosses blessed our “thorough” performance plans.
Those goals were not relevant to our real work expectations. This approach did not boost our confidence in our boss.
Performance management is important. An effective performance-management system identifies desired targets and goals at the start of the year (or of the performance period), and tracks efforts and progress towards those relevant goals.
And, performance management is half of the equation. The other half is values alignment. If your team or company has values defined, values expectations need to be included in the year’s plan. An effective values-management system tracks efforts and progress towards demonstrating desired values every day.
With an equal emphasis on performance expectations and values expectations, the system’s terminology must evolve. I suggest “contribution management” since you’re looking to align both what people deliver (performance) as well as how you want people to deliver them (values).
There is one more curveball to consider. When performance management is directly linked to compensation, performance ratings are emotionally charged — and complicate a true appraisal of contribution.
W.L Gore handles this brilliantly. They separate contribution from compensation. Everyone is rated by their peers on the degree of their contribution to their projects. The expectation is that everyone is seen as genuinely contributing.
Compensation is based on how well the company’s financial performance was. When the company performs well, everyone benefits and gets a share of that pie. Contribution is effectively evaluated by peers. Compensation is separate and fair. It’s clear and it’s uncomplicated.
Examine the relevance of your contribution-management system. There’s no time like the present to refine it to serve everyone better.
What do you think? Is your company’s performance-management system seen as relevant and beneficial or not so much? What great contribution management practices have you seen? Share your thoughts about this post/podcast in the comments section below.
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