“People are realising that doing anything annually, whether it’s a Performance Review, Engagement Survey or Goal-Setting, makes no sense.” – Jim Barnett.
The mounting need for top talent, the pressure of dealing with global competitors and the complexity of Industry 4.0 have led corporations to rework their business structure into a team-based model. Renowned research indicates that the organisations who will stand the test of time will consist of dynamic networks of highly empowered teams.
At the very heart of this successful team-based business structure is agility. An agile system is nimble and propagates fluidity. A team’s lifespan depends on its core objective. When the team has fulfilled its purpose, the unit may disband.
Members of the dispersed team are quickly absorbed into existing teams; others are reassembled into new teams with new objectives. One person might be part of many units simultaneously.
The system encourages information to flow freely and transparently. As a collective, the teams experience an almost tangible sense of psychological safety to ask for feedback and share knowledge.
Interconnected knowledge-sharing diminishes feelings of uncertainty. Robust feedback keeps people’s work-related activities focused on personal, team-related and business goals: the more timeous and more direct the feedback, the better. Critique is invited and not perceived as a threat.
Leadership lights the torch and passes the light of critiquing
The ability to move between teams and share without risk is a critical attribute of high-performing – or Elite Teams.
An interconnected feedback system becomes the backbone of success. Positive feedback enables the team to learn and engage quickly, while constructive feedback allows for team members to change and optimise their ways of working. This also allows teams to review their objectives and if they are being met timeously.
The team spreads the fervour of the safe feedback system, but leadership lights the fire – and carries the torch forward. How leaders approach the (potential thorny) issue of criticism determines the culture of feedback throughout the entire team.
Feedback is the most critical gear in leadership’s driving seat, says Professor Christine Porath, author of Mastering Civility: A Manifesto for the Workplace.
She explains that team members feel valued when leadership gives regular updates on personal performance and on how their contributions are benefitting the team. Directive feedback – coupled with support – provides guidance, leading people to grow into their roles and to feel more confident in their competence. A culture of feedback becomes the team’s driving force.
Leadership models the ideal behaviour of ‘stabbing in the front, not the back’, a philosophy followed by the distinguished All Blacks rugby team. The phrasing, of course, is tongue-in-cheek. This viewpoint simply invites team members to robust communication and speaking freely.
The dreaded Annual Review
Practically speaking, feedback from leadership translates into the Annual Review.
On the surface, this measuring tool aims to create opportunities for learning and generate energy so critical for an Elite Team to thrive. However, the mere mention of the words – and related terms such as Performance Review or Annual Progress Evaluation – send shivers down our spines. Moreover, this negative connotation might not be so unjust.
The Society for Human Resource Management (SHRM) reports that the “traditional performance reviews set up an uncomfortable dynamic between managers and employees in which one person is judge and jury for the other.”
Neuroscientific research warns that this dynamic put team members on the defensive and result in a decline in performance – even for top-achievers.
Building on current performance and grooming future talent are both critical elements for organisations’ long-term survival; traditional Annual Appraisals erode both, says Harvard Business Review.
With a substantial emphasis on (financial) rewards and reprimands – and their end-of-year structure – traditional performance reviews hold people accountable for past behaviour. This is at the expense of improving current performance and grooming talent for the future.
In the Deloitte 2015 Global Human Capital Trends report, 82% of companies stated that performance evaluations were not worth the time. A separate study reported that 41% of companies found widespread manager bias, and 45% believed performance evaluations did not motivate employees.
The traditional appraisal was designed in the 1970s, according to Deloitte. With the world of work changing at the speed of light, it’s clear as day that the conventional feedback system is out of date.
Society is moving fast. The world of work is moving even faster. Leadership must keep up with the pace. Managers are starting to realise that doing anything annually, whether it’s a Performance Review, Engagement Survey or Goal-Setting, makes no sense, says Jim Barnett, CEO and co-founder of Glint, a cloud-based employee engagement tool.
The shift to real-time performance management
In today’s world of work, the need for performance feedback is real-time, continuous and multidirectional.
More than 90% of contemporary employees would prefer their manager to address oversights and learning opportunities immediately, says Wakefield Research. The 2017 Global Human Capital Trends says that, informed by their experiences in social media, people want to get and give feedback regularly.
In addition, several organisational changes have made developing a more agile process necessary:
- Team members expect continuous learning. New learning solutions are creating an “always-on” learning environment to support this need.
- Team members expect unbiased assessments. Important decisions about team compilations and role-definitions are getting more accurate through data. Data-driven appraisals ad value and drives performance cross-functionally – all the time, not just once or twice a year, or on specific projects.
- Businesses operate in teams, so performance management must be local. Practices that facilitate continuity in feedback empower local leaders, create better relationships among units and facilitate inter-team collaboration. High-performing teams implement continuous performance management to help organisations learn from high performers in real-time.
Quick, collaborating and coaching
Some companies have stepped away from traditional Performance Reviews completely, encouraging frequent manager-employee check-ins – quarterly, monthly or even weekly. This could be as simple as a short meeting or a coffee break. Digital tools can enable managers to touch base with employees continuously with minimal disruption.
The simple task of checking in team members frequently can increase employee productivity, says Kris Duggan, CEO and Co-founder of BetterWorks, a platform for setting, measuring, and cross-functionally aligning goals.
Some of the latest data analysed by his company suggest that “the direct reports of managers who check in on progress towards weekly goals are up to 24 times more likely to achieve them.”
At its core, continues performance management boils down to two elements: performance and engagement. Valuable performance management starts with aligned objectives, followed by frequent feedback, backed by continuous support and employee recognition. It’s also encapsulated by personal and career development.
Coupled with the change approach to Performance Management is a change in the role of leadership: from bureaucratic to coaching. Research published by UNC’s Kenan-Flager Business School found that today’s labour force doesn’t see their managers as experts the way their predecessors did.
Thanks to the digital age, people can consult several sources for expert opinions. Instead, team members look to their managers for coaching and mentorship and find purpose through continually learning and growing on the job. Managers need to adopt a coaching approach toward guiding their teams. Leadership, says Deloitte, is more important than ever but must be viewed through a new lens.
Llopis, G. (2012). 6 Ways Successful Teams Are Built To Last. Retrieved from https://www.forbes.com/sites/glennllopis/2012/10/01/6-ways-successful-teams-are-built-to-last/#349f0192b554.
Delizonna, L. (2017). High-Performing Teams Need Psychological Safety. Here’s How to Create It. Retrieved from https://hbr.org/2017/08/high-performing-teams-need-psychological-safety-heres-how-to-create-it.
Porath, C. (2016). Give Your Team More-Effective Positive Feedback. Retrieved from https://hbr.org/2016/10/give-your-team-more-effective-positive-feedback.
Spreitzer, G., & Porath, C. (2012). Creating Sustainable Performance. Retrieved from https://hbr.org/2012/01/creating-sustainable-performance.
Hakanen, M., Hakkinen, M., & Soudunsaari, A. (2015). Trust in building high-performing teams- conceptual approach. Retrieved from http://ejbo.jyu.fi/pdf/ejbo_vol20_no2_pages_43-53.pdf.
PwC CEO Survey. (2016 &2017). Continuous reskilling is an imperative. Retrieved from https://www.pwc.com/us/en/about-us/new-ventures/snap.html.
Bersin, J., McDowell, T., Rahnema, A., & Van Durme, Y. (2017). The organization of the future: Arriving now. Retrieved from https://www2.deloitte.com/us/en/insights/focus/human-capital-trends/2017/organization-of-the-future.html.
Sloan, N., Agarwal., Garr, S., & Pastakia, K. (2017). Performance management: Playing a winning hand. Retrieved from https://www2.deloitte.com/us/en/insights/focus/human-capital-trends/2017/redesigning-performance-management.html.
Smith, A. (2018). More Employers Ditch Performance Appraisals. Retrieved from https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/more-employers-ditch-performance-appraisals.aspx.
Duggan, K. (2015). Why The Annual Performance Review Is Going Extinct. Retrieved from https://www.fastcompany.com/3052135/why-the-annual-performance-review-is-going-extinct
Wilkie, D. (2015). Is the Annual Performance Review Dead? Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/employee-relations/pages/performance-reviews-are-dead.aspx.
Ryan, L. (2018). Performance Reviews Are Pointless And Insulting – So Why Do They Still Exist? Retrieved from https://www.forbes.com/sites/lizryan/2018/01/14/performance-reviews-are-pointless-and-insulting-so-why-do-they-still-exist/#456c901c72d1
Cappelli, P., & Tavis, A. (2016). The Performance Management revolution. Retrieved from https://hbr.org/2016/10/the-performance-management-revolution.
Rock, D., & Jones, B. (2015). Why More and More Companies Are Ditching Performance Ratings. Retrieved from https://hbr.org/2015/09/why-more-and-more-companies-are-ditching-performance-ratings.
McDowell, T., Agarwal, D., Miller, D., Okamoto, T., & Page, T. (2016). Organizational design. Retrieved from https://www2.deloitte.com/us/en/insights/focus/human-capital-trends/2016/organizational-models-network-of-teams.html.
Bersin, J. (2016). New Research Shows Why Focus On Teams, Not Just Leaders, Is Key To Business Performance. Retrieved from https://www.forbes.com/sites/joshbersin/2016/03/03/why-a-focus-on-teams-not-just-leaders-is-the-secret-to-business-performance/#4b72f98324d5a.
Marr, B. (2018). Why Data Is HR’s Most Important Asset. Retrieved from https://www.forbes.com/sites/bernardmarr/2018/04/13/why-data-is-hrs-most-important-asset/#5f8482256b0f.
Bwmarketing. (2015). What Have Your Goals Told You Lately? Introducing the First Goal Science Quarterly. Retrieved from https://blog.betterworks.com/the-first-goal-science-quarterly/.
Kenan-Flagler Business School. (n,d). Research with Relevance. Retrieved from https://www.kenan-flagler.unc.edu/research/.
Hearn, S. (2017). The Best Alternative to the Annual Performance Appraisal. Retrieved from https://www.clearreview.com/best-alternative-annual-performance-appraisal/.
Reflektive. (2018). New Study Uncovers Major Gap in Employee and Employer Expectations for Performance Management and Growth. Retrieved from https://www.reflektive.com/press-center/press/new-study-uncovers-major-gap-employee-employer-expectations-performance-management-growth/.