From the HRINZ Chief Executive - Nick McKissack

Questioning the relevance of traditional performance management systems

Getting started in an HR career back in the 90's one of the first projects I was involved with was the implementation of a performance management system at New Zealand Post. I confess to having been a great fan of traditional performance management frameworks. Creating a link between the company's overall business plan and each employee's performance targets and standards felt like a panacea for aligning behaviour across the organisation. I took to this like a duck to water and managers I worked with greatly valued the ability to make these connections. When well executed, a performance management system like this really can connect people to the broader vision and answer that ever important "why" question.

As I moved into general management roles later in my career I continued to use traditional approaches to performance management. I found them valuable in terms of setting expectations and creating ownership for performance outcomes amongst the people who reported to me.

More recently I have come to question the relevance of traditional performance management systems. The nature of work has changed and increasingly we require employees with deeper expertise, more independent judgment, and better problem-solving skills. We want our people to create value in ways that industrial-era performance-management systems struggle to define. There is the very real risk of inadvertently discouraging the very behaviour you need employees to exhibit in the situations they encounter each day.

In addition, the annual or twice yearly appraisal has long been the organisational process most likely to send a shiver down the spine of managers and employees alike. There is no other relationship we have in our lives where we would contemplate this kind of feedback process to be a helpful idea that is likely to improve the quality of that relationship. Traditional approaches to performance appraisals are most likely to appeal to those managers with a control orientated leadership mind-set.

In recent years I have taken to seeking employee's guidance on what they want to achieve from an appraisal discussion and structuring it accordingly. People's needs vary widely but most people value a conversation about the challenges and opportunities of their role and their future development well above any evaluation of past performance.

To make matters worse the technology solutions being deployed as part of integrated HR systems are modelled on these outdated approaches. Little wonder that these implementations are not delivering the business value expected.

The problems and limitations of traditional performance management frameworks have been widely recognised for some time. Responses such as extending the range of factors employees are evaluated on and building in more frequent structured discussions may not be succeeding in fixing the fundamental issues.

I, for one, would support a total rethink of human resource practices in relation to performance management systems. It's all very well to contemplate the future of work and trends in the nature of work and working relationships but at some stage we need to consider how we re-engineer our practices to meet these new demands. I think the HR profession needs to be proactive in taking steps to innovate in this area and ask the hard questions about the real value delivered by performance management systems in a modern context.

This seems like a great opportunity to apply some human centred design thinking to a core human resource management process.

Pullquote:

Most people value a conversation about the challenges and opportunities of their role and their future development