Effective performance management is a dream goal for every manager out there. But unfortunately, effective performance management it’s a one-size-fits-all solution. Managers can read up on tips and tricks, but at the end of the day, what works brilliantly for one company might not jive with the office culture of another organization.
Sometimes the best way to learn smarter ways to do things is to look at people or companies that are killing it.
Below are profiles of three companies that are taking innovative approaches to effective performance management.
Out with dreaded annual reviews, and in with the future of company growth!
1. General Electric
GE is in the top ten of Fortune 500 companies and has been known traditionally as a staunch supporter of the annual review. In fact, it was GE’s practice to round up and fire the lowest performing 10% of their staff each year.
But GE has found a better way to effective performance management. They ditched the annual review and performative firing in favor of a year-round performance management system revolving around an app. The app encourages informal discussions between employees and managers to stimulate professional growth, achieve goals, and bring greater value to the company as a whole.
Fig. What’s your way to effective performance management?
Now, GE isn’t throwing out the baby with the bathwater. They still have an annual meeting between an employee and the manager, but this review is not tied to compensation. It is directed toward reflecting over a year of progress and determining new, more appropriate goals for the employee now that she’s grown.
GE has found that their system relies upon one important facet – trust. Trust between employees and managers is crucial to developing a performance management approach that actually produces change. Employees need to feel comfortable enough to take risks, to fail, to grow. Managers need to be available to offer advice and support. GE managers are learning new ways to approach discussions of growth – they’re avoiding words like ‘strength’ and ‘weakness’.
It’s a symbiotic relationship that GE decided to nurture through the use of an app. The app creates accessibility, which is the crux of performance management.
Lesson learned: leverage technology.
There are easier ways to use technology than to develop your own app. For example, emplo is a performance management and employee development tool that makes it easy to create goals and track employee progress. Take a peek:
Fig. In emplo, you can view company, team and individual goals.
Unlike GE, Google is known for being non-traditional. Google’s offices are a child’s dream playland to foster creativity. Google has also been known to offer its employees ‘freebies’ for mistakes made on the job. After all, you can’t innovate without making a few mistakes along the way.
So unsurprisingly, Google has a very democratic approach toward performance management. They aim for a leader-leader culture, as opposed to a leader-follower culture. What does this mean?Annual #PerformanceReviews sucked up 80,000 hours of #managers’ time at Adobe. Click To Tweet
Basically, it takes the power out of the hands of managers and puts it into the hands of teams.
Now, this doesn’t mean that managers are entirely powerless, but it also means that they do not have unilateral power. In fact, here’s a short list of actions managers cannot decide alone: hirings, firings, performance ratings, promotions, raises or bonuses, who wins awards, and final product designs.
Not only does this decrease bias within an organization, but it also increases trust among employees and empowers them. Employees will automatically be more engaged in a decision they take part in. Creating a democratic office culture can help to keep employees engaged, give them a voice, and create a sense of self-management.
Fig. Go for a democratic office culture!
Lesson learned: empower your employees.
Google’s approach is quite extreme – you might not find that letting your employees weigh in on who you fire or hire works for your organizational culture. But like many aspects of Google’s approach to business, there is a pearl of wisdom to glean. Empowering your employees to make decisions about their future, their working environment, and their career will create highly engaged, motivated employees that are excited to come to work each day.
Adobe’s performance management system used to be a time-consuming blackhole. Adobe estimates that each year, annual performance reviews sucked up 80,000 hours of managers’ time. To put it into perspective – that’s like Adobe hiring 40 full-time managers to work year round just doing annual reviews.
Even worse, after annual reviews, Adobe would see a spike in employees leaving the company likely because they were disappointed by the result of the review.
Clearly, Adobe’s performance management system wasn’t working. So they scrapped it.
In place of the unwieldy juggernaut of a process, they implemented informal check-ins. Managers and employees meet at least once a quarter to discuss performance. Unlike past annual reviews, these meetings aren’t planned. There isn’t paperwork to fill out, surveys to complete, or metrics to analyze. These meetings merely cover three topics: expectations, feedback, and growth.
This informal chat gives employees a space to talk about career goals, paths to those goals, and gives managers an opportunity to shape performance. Now managers are freed from formal paperwork so they can focus on inspiring and motivating employees.
Fig. Does your organization need a motivational cat?
Lesson learned: simple is better.
At the end of the day, paperwork might feel like progress, but it isn’t. It can only record progress. The important thing to keep in mind with performance management is the relationship between the employee and manager – not the paperwork. If managers are feeling overwhelmed, it might be helpful to look at the paperwork involved and see what can be cut. You might be surprised what is unnecessary in the end.
Fig. What’s a relationship between you and your employees?
There is no one true path.
That’s our roundup of profiles on three companies that have found non-traditional routes to effective performance management. We hope that you gleaned something useful from this list. As always with performance management, these are only suggestions for you to mine. Take what works and throw the rest away. Performance management is personal to each organization’s culture, your managerial style, and your employee’s career dreams.
Is there something we missed? Let us know your favorite tip for effective performance management in the comments below!