10 Ways to Truly Get High Performers From Your Performance Management System

HR and training professionals in industry, government agencies and not-for-profit organizations invest heavily in creating and maintaining performance management systems, and we hope these systems will create high performers from our employees. While we set up and are the keepers of these systems, we are not the main beneficiary or user of the system; managers and their employees are. Knowing this, how can we support and ensure the quality and usability of performance management in our organizations? This article describes what a performance management system is and the process managers are expected to run inside it, then gives ten ways to make the system produce high performers rather than paperwork, how to prioritize them, the signs that a system is not working, examples from our client work and how to measure the result.

What a performance management system is

A performance management system is the connected set of expectations, conversations, records and decisions through which managers and employees plan work, review progress, correct course and develop capability over a performance period. The software or the forms are the record of the system; the system itself is what managers and employees do. Most systems have five elements:

• Expectations: goals, objectives and the behaviors expected in the role, agreed at the start of the period.
• Ongoing feedback and coaching: interim conversations that recognize progress and correct problems while there is still time to act.
• Documentation: a record of expectations, observations and agreements that both parties can see.
• Formal review: the appraisal discussion and rating, connected to the conversations that came before it.
• Development and consequences: development plans, recognition, compensation decisions and, where needed, performance improvement.

The purpose is better performance, and by that measure most systems underdeliver. Gallup reports that only two in ten employees strongly agree that their performance is managed in a way that motivates them to do outstanding work [1]. In our experience the gap is rarely the form or the software. It is that the people expected to run the process, managers, were not equipped to run it, and the organization's other systems do not require them to.

The performance management process managers are expected to run

Here is the process as we often describe it to managers, with the point at which each stage tends to break down. Keep in mind that the stages are not always linear. For instance, documentation can happen throughout the process, planning may be revisited, and ongoing feedback and coaching happen frequently.

The first stage deserves more attention than it gets. Gallup reports that only 30% of employees strongly agree that their manager involves them in goal setting, and employees who are involved are 3.6 times more likely to be engaged [1]. Organizations that move to more frequent check-ins, sometimes called continuous performance management, change the cadence rather than the process. The five stages still happen; the interim feedback stage simply carries more of the weight, which makes the manager's skill in that conversation matter even more.

10 ways to truly get high performers from your performance management system

Here are some ways to make it happen. Each one equips the people who use the system rather than adding to the system itself.

1. Include performance-management-supportive competencies in your organization's competency model for leaders. It is unusual for organizations to be without some definition of what is expected of a leader. For many organizations, this is a manager- or leader-specific competency model. Ensure that you have included competencies such as "provides frequent feedback on performance" and "intervenes when employee performance doesn't match expectations" as part of your existing model.
2. Don't have a leadership competency model? Build one. Even a "less-than-perfect" model that is communicated and used to align development activities will go a long way toward creating the consistency that drives home the expectation to manage performance in an active way. Our article on competency development covers how, and our leadership development readiness checklist starts with the same question.
3. Design, develop and distribute skill cards and toolkits to managers that explain and outline the performance management process, including objective setting, monitoring and interim feedback, documentation of performance and formal appraisal feedback. These can include copies of standardized forms, links to online systems and examples of conversation starters. Skill cards and toolkits can be housed on organizational intranets or learning portals. For organizations without shared technology, tools can be emailed directly or even provided in hard copy. Provide complementary skill cards and toolkits for employees. Our appraisal discussion agenda tool and acknowledgement and reinforcement tool are two examples, and our performance support practice builds them to fit an organization's own process.
4. Create a manager-specific, skill-based training program on the roles in the performance management process and the core skills necessary in order to administer the system. For managers, a solid program should include goal-setting and agreement-setting skills, observation and documentation guidelines and the skills critical to delivering feedback and responding to defensiveness without damaging relationships. Our performance review training covers the appraisal conversation, our article on the conversations top-performing managers have mastered lists the rest and our guide to feedback for underperforming employees addresses the conversation managers avoid most.
5. Create an employee-specific training program on how to get the most from your performance management process. This program should complement the manager version by explaining roles, but also by explaining how employees can use your existing performance management system in order to get feedback and coaching on their performance from their managers. Our article on managing up gives employees the other half of the conversation.
6. If you have a self-study library in place, add resources on goal setting, feedback, coaching and dealing with challenging behaviors, and publish an announcement that these resources are available, with "just-in-time" reminders in your performance management cycle (the month all appraisals are taking place, for instance). Our guides to individual development plans and 20 ways to develop skills and knowledge are the kind of resources managers reach for at development-planning time.
7. Measure managers on the quantity and quality of their performance management actions. Measurement can be a tricky thing to implement. It seems complicated, and sometimes it is. You can include a component on your performance appraisal form that covers giving feedback, providing development opportunities and actions taken to address employee performance. You can also implement multi-rater feedback (360-degree feedback) that specifically addresses the elements that support performance management. Still another measurement form is the employee opinion survey. Our assessment services include customized 360s built on the organization's own competencies.
8. Link your performance management software to the "live" actions of managers. If your organization uses an HRIS or a dedicated performance management platform, customize the help screens or provide standalone software training that demonstrates the connection between how managers will use the software for tracking and documenting performance management actions and the conversations behind them. Many managers believe that entering data into a system is performance management. Through training, you create a linkage for managers between the planning and conversations they are expected to have with employees and how they enter the results of those conversations into the software. If your organization doesn't use such software, chances are that you use standardized forms for planning and appraisals. Be sure that these forms use the same language and follow the same process as the discussion cadence in your actual performance management system.
9. Post reminders of key performance management activities in your organizational communication for managers and employees. Out of sight can mean out of mind, especially with the volume of work most professionals manage on a day-to-day basis. If your organization has a chat channel, a Teams channel or an internal newsletter, be sure to post reminders about target setting, goal setting, interim or touch-base feedback and end-of-review-period actions that managers should be taking and in which employees are expected to participate. Some organizations have the ability to add calendar events or push reminder emails or instant messages to segments of their population. If you do, push notice of an event to managers such as "hold mid-term target-setting review with employees" or "complete appraisal discussions by…" The same reinforcement series works for reinforcing training after a program.
10. Hire managers who have demonstrated that they actively manage employee performance. Gallup's research on managers found that companies fail to choose the candidate with the right talent for the manager job 82% of the time [2], and the disposition to coach and give feedback is one of the things selection tends to miss. Your recruiting profile and interview questions for applicants to a formal leadership role should not overlook that candidate's disposition on coaching and giving feedback. Questions such as "Give me an example of a time when you ensured an employee knew what was expected of him or her. What did you do about this? How did your employee react? What was the outcome this year?" work well. Leaders should be able to readily provide examples of their role in performance management. And, if you have candidates without formal leadership experience, you can inquire about their behaviors in this area by asking questions such as "Tell me how you get information about your own performance. What do you do? How has that worked?" or "Everyone has to work with others in order to accomplish results. Share with me an example of when you needed someone else to change his or her behavior so that you could meet your commitments. Who was the person? What did you do? How did the other person react?"

Where to start when you cannot do all ten

These actions vary in degree of complexity and difficulty to implement. Some organizations have the internal resources to implement all of these actions, and more. Still others are one- or two-person departments that must either prioritize what they can pull off or seek outside support. Few organizations do all ten at once, so here is how we weigh them:

In general, the more of these supports that are in place, the better enabled managers are, and the more likely they will be able to fulfill their critical roles as managers of performance. If you can do only two, we suggest the first and the seventh: define the expectation and measure it, and much of the rest follows.

Signs the system is producing paperwork rather than performance

A few indicators tell us, usually within one conversation with an HR team, that a performance management system has become an administrative exercise:

• The formal review is the first time performance has been discussed in the period.
• Ratings cluster in the middle, or at the top, because managers avoid the conversation a low rating would require.
• Development plans are blank or repeat the same generic items every year.
• Managers describe the process in terms of the software deadline rather than the conversations.
• Employees report surprises during appraisals.
• High performers leave, and the exit interviews mention feedback, recognition or development.

Each of these has a cause, and the cause is usually one of the ten ways above being absent. Our tool for matching common performance problems to HR solutions works the same way for individual performance gaps.

Performance management examples from our work

Here are three examples of how the ways above showed up in client organizations:

• A global medical device company with 30% year-over-year growth published new core values, several of which required leaders to coach, and managers also needed to use coaching skills as part of a newly standardized performance management process. The coaching skills for leaders program was built around the organization's performance management cycle, referencing the key process areas where the skills would be used, which is ways 1, 3 and 4 working together.
• Career engineers with a sales target at a large North American engineering firm had no adopted competencies for the role and managers who were not equipped to coach and develop them. The sales enablement engagement built a competency model, administered a customized 360 against it, produced the organization's first individual development plans and equipped managers with support tools: ways 2, 6 and 7.
• New managers in a large, technically focused global organization were not developing core skills such as giving feedback, making performance agreements and coaching, and the organization's performance management tools went unused. The new manager development program taught the skills alongside the tools, with formalized reinforcement and the managers of participants equipped to coach; 200 first-line managers completed it across six regions, and sales leadership attributed increased revenue, customer retention and engagement to the program.

Measuring whether the system works

Way 7 measures managers. The system as a whole deserves a few measures of its own, agreed before the next cycle:

• On-time completion of each stage, not only the final review.
• The distribution of ratings, and whether it moves once managers are trained.
• Employee survey items on feedback frequency and on whether expectations are clear.
• The share of development plans with specific actions, and the share completed.
• Retention of high performers and the internal promotion rate.
• Business results in units whose managers score well on performance management behaviors, compared with those whose managers do not.

Our guides to measuring leadership development and measuring training effectiveness describe how to set up the comparison.

Frequently asked questions

What is a performance management system?

The connected set of expectations, conversations, records and decisions through which managers and employees plan work, review progress, correct course and develop capability over a performance period. Software and forms are the record of the system; the conversations are the system.

What are the five elements of a performance management system?

Expectation setting, ongoing feedback and coaching, documentation, formal review and development with consequences, meaning development plans, recognition, compensation decisions and performance improvement where needed.

What are the steps in the performance management process?

Plan and agree expectations at the start of the period, observe and give interim feedback throughout it, document as you go, hold a formal review that contains no surprises and agree on development and consequences. Organizations that use frequent check-ins run the same steps on a shorter cycle.

What is the difference between performance management and a performance review?

The review is one stage of performance management, the formal discussion and rating at the end of a period. Performance management is the whole cycle, and a review that is not preceded by expectation setting and interim feedback tends to be the meeting both parties find demotivating.

What training do managers need to use a performance management system well?

Goal setting and agreement setting, observation and documentation, giving feedback, responding to defensiveness without damaging the relationship, coaching and planning and holding the appraisal discussion. In our experience the training has to be skill-based, with practice and feedback, rather than a walkthrough of the form.

How do you improve a performance management system that managers ignore?

Treat it as a manager capability problem rather than a system problem. Put the expectation in the leader competency model, train the skills, give managers tools they can use in the moment, measure their performance management actions and hire for the disposition. Changing the software or the form on its own rarely changes behavior.

Where to start

Start by asking managers what the system asks of them and whether they know how to do it. PPS International Limited has designed performance management processes for organizations worldwide and trains managers to run them, from performance review training to the tools and support that make the process a habit. Learn more about our HR training and development work, or contact us to talk through your system.

References

1. Gallup. Re-Engineering Performance Management. https://www.gallup.com/workplace/238064/re-engineering-performance-management.aspx
2. Beck, R. J., and Harter, J. (2014). Why Great Managers Are So Rare. Gallup. https://www.gallup.com/workplace/231593/why-great-managers-rare.aspx