Here at ClearCompany, we are poring over the most recent Forrester Research, Inc. report, “Disrupt the Employee Performance Process to Align with Business and Customer Outcomes.” (July 2, 2014) We couldn’t have said it better ourselves! Forrester Research, Inc. has identified the current flaws in traditional performance appraisal processes, and presents insightful and useful solutions.
Historically linked to the annual salary review, performance appraisals often focus on HR-driven criteria for skills and competencies rather than business outcomes.
The human resources management (HRM) technology solutions offered by leading vendors are typically built around this dysfunctional paradigm.
The message here is that you can’t simply build upon and automate an intrinsically flawed process. Employee performance management simply (or not so simply) has to be reinvented to center around business and customer outcomes, in order to be truly effective in driving organizational success. That being said, the report also places a strong emphasis on engaging employees in a socially driven process with continuous learning and collaboration as the two main directives of that goal.
The report includes insightful key takeaways like:
Performance Reviews Fail to Deliver Business Impact
Traditional performance reviews are despised by employees and managers alike. The concept behind performance reviews is completely relevant, but the current state of performance reviews is not effective at its key directive – managing performance. The information from performance reviews should be used to drive positive business and customer outcomes – the results that matter in business.
The growing popularity of 360 reviews has been a long time coming – too long. This completely preventable frustration in the performance management process not only creates shortsighted reviews, but depending on manager reviews alone is like only using one sense. Self-assessments and peer reviews are vital in the process, to create a fair and accurate review of every employee.
Use Technology to Disrupt the Outdated Appraisal Process
A major, and common frustration with the traditional performance appraisal process is that HRM technology is not keeping up with the necessary changes that employers need to make. If all a vendor has done is take a flawed process and added social features and a Google+ login, well then I’m very sorry to say that you’ve paid for social features and a Google+ login, not an effective performance management solution.
The issues we’re still seeing in so-called “robust and innovative” HRM technologies:
Conversations don’t create useful analytics:
As paper forms translate to modern technologies, each form contains a standard narrative –a dialogue that managers stick to, because it’s too much work otherwise. These standardized forms and fields only serve to collect the dialogue, and don’t offer any real data that can lead to objective workforce decision making on a large scale.
Competencies don’t reflect delivery:
If your current employee review process does a fantastic job at gauging competencies, but doesn’t really offer any data on what the employee has actually done, what’s the point? So your software reveals that this employee’s skills perfectly align with their job reqs. Awesome! –but that leaves the question, what have you done for me lately?
The employee appraisal process is still seen as a formality or compliance issue:
Sure, you might dust off your HRM for the annual review or quarterly bonus assessments, but that’s probably about it. Real performance management has to become a part of daily leadership, and basic technology isn’t doing anything to support or enforce that.
Embrace New Paradigms that Motivate and Align Performance
The insightful report urges employers to conduct a total overhaul on their performance management system:
“Refactor your performance process so that you can continuously measure and recognize employees for achievements and outcomes that drive business success. Separate needs to periodically review employee skills and adjust salaries from the outcome-based measurement process.”
Mentioned as one of the few vendors who “Offer a New Paradigm,” we are excited to share the full report with you. There are pages and pages of valuable information that could help you make minor improvements, choose the right vendor for them, or completely reinvent your employee appraisal process.
Please download this complimentary resource: “Disrupt the Employee Performance Process to Align with Business and Customer Outcomes,” and start the change now.