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Chief research and development officer of work force productivity, Morneau Shepell, Toronto

On a scale of one (low) to 10 (high), how effectively does your current performance management help you professionally?

Most organizations use performance management to align a person's goals and objectives to the organization's, the end outcome being to maximize employee performance, engagement and results. Organizations that have figured out how to make performance management work right for them report significant financial results and improved customer service and engagement over their competitors.

Traditional performance management systems facilitate a formal annual performance appraisal where the employee and manager review the past 12 months. Some models also include semiannual or quarterly goal setting and check meetings.

More and more organizations are evaluating the effectiveness of their performance management systems. Deloitte reported in the Harvard Review that it was dropping its traditional model. Many others are reporting similar decisions.

The challenge with traditional performance management models is that they can breed a pass-or-fail mindset, with the focus on getting a passing grade.

Performance 2.0 is a human capital model that turns its focus to performance and results achieved through a highly interactive process. The leader's role in this model is not management; it's facilitation of performance. Dropping the word management puts the primary focus on performance, the goal being to create a level playing field where the employee and manager can focus on obtaining results rather than passing.

This new model's primary purpose is to move from static to interactive conversations that promote learning and growth. It appears 69 per cent of millennials think the annual performance managing model is flawed and are looking for way to receiving meaningful feedback, development and growth.

This framework outlines elements that move to a balanced two-way accountability model that focuses on promoting continuous growth over the entire year.

Performance 2.0 success requirements

Senior leadership has determined that manager-employee interactions are critical.

There is no more important relationship than the employee-manager relationship. A manager's effectiveness is determined by their results and how successfully they influence their people's behaviours and outcomes on a consistent basis. The manager's time can be occupied by technical, financial, process and operations issues that can take the lion's share of their day. In one organization, the average manager spent 95 per cent of their time on technical and operations issues and only five per cent focused on employees' needs, development gaps and acknowledgement of good work. The time spent with employees was primarily focused on correcting or asking them to do more with less.

These changes need to be recognized by senior leadership, and it should be made clear to managers that spending time with people is of value to the operation. When managers spend quality time with employees – with encouragement from senior leaders – this facilitates trust, creating winning teams and results.

Manager-employee staffing ratios need to be realistic.

A 15-to-1 ratio is most likely as high as a manager can go to effectively interact and communicate with and support a group of employees on a monthly basis. Managers who are expected to do performance management with 50 employees are engaging in an administration checkbox process, as there's no time for meaningful interaction, reflection and relationship building. This model's success requires a minimum of 10 per cent of the typical manager's time each month to focus on their employees. This doesn't seem like a lot, but it has a massive, positive impact in relationship building, trust, growth and discretionary effort by employees, as they are grateful that the organization is investing in them.

Performance 2.0 in action

Following is a snapshot of some elements of Performance 2.0. The focus is on high levels of interaction, coaching, learning and engagement. Every employee is provided an opportunity to focus on their needs at least once a month.

  • People time – The primary goal is to increase the number of employee-manager interactions and communications that are relevant to the employee.
  • A 12-month structured calendar – Each month, a goal is framed for all employees in the organization to focus on with their manager. Managers are provided with a calendar and materials that can be used to facilitate each of the monthly conversations. This allows the organization to facilitate performance one conversation at a time.
  • Managers’ training – Every manager is trained to facilitate this model. There’s no assumption that managers have the skills to build trusted relationships or to facilitate effective employee-manager meetings and impact employee motivation, behaviours and performance.
  • Organizational aggregated results – The model allows for scoring that can act as a pulse check for where the entire organization is monthly with respect to impact and results. As well, annual metrics can be obtained for benchmarking. Organizations can use technologies to facilitate a model like Performance 2.0 to make reporting seamless and easy for all involved.
  • Employee drives the structured meetings calendar – Each employee is accountable to set their own monthly meeting with their direct manager and to have their dates booked three months in advance. The meetings are typically anywhere from 30 to 45 minutes, and the goal is to be focused.
  • Real-time interaction – This model promotes real-time learning. In addition to the structured monthly meetings that are meant to be the minimal interactions, managers are encouraged to focus on providing real-time feedback, support and acknowledgement.

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