A popular topic around leadership is employee engagement: how leaders can help create an environment where employees are enthusiastic about and committed to their work and workplace. I had never made a connection between employee engagement and performance evaluations until I read a recent Gallup study called Re-Engineering Performance Management.

The Gallup study is part of a broader trend in re-thinking methods and effectiveness of performance management.  Many perspectives focus on how to create measures of individual performance that are more meaningful, for instance, by being better aligned with organizational goals.  Or, they consider how to more broadly consider performance, such as including inputs from customers. What I appreciate about the Gallup survey is that the primary focus is on how the employee himself/herself views and is affected by the approach to performance management.  Here are some notable findings from the study:

  • Only two in 10 employees strongly agree that their performance is managed in a way that motivates them to do outstanding work.
  • Only 14% of employees strongly agree that the performance reviews they receive inspire them to improve.
  • Only 26% of employees strongly agree that the feedback they receive helps them do their work better.

Some of the factors behind these findings include: infrequent feedback, a lack of clarity around expectations as well as feedback, and a proven tendency for managers to be ineffective at subjectively evaluating performance.  These findings also underlie the important point that organizations must make a shift from performance management to performance development.  So what must organizations do to make this shift?

Establish clear expectations. The Gallup study notes that traditional reviews include ratings like “Performed adequately/inadequately” on a ranked scale, with little explanation of what that means.  In addition, performance reviews are often not conducted against tailored expectations of each employee.  Leaders must define what each employee is responsible for and what constitutes outstanding, acceptable, and unacceptable performance. In addition, employees who strongly agree that their manager involves them in setting their goals are 3.6 times more likely (than other employees) to be engaged.  Articulate a clear picture of what a successful end state looks like, and invite your employee to co-create it.

Provide useful feedback often. 47% of employees received feedback from their manager a few times a year or less in the past year.  And feedback is often not effective in supporting better performance.  But employees who strongly agree that their manager provides meaningful feedback to them are 3.5 times more likely to be engaged. And when managers provide daily (vs. annual) feedback, their employees are 3 times more likely to be engaged. Feedback conversations should be purposeful (what and why) and timely (at least once/week, or immediate) and include discussions of both what worked well and improvement areas.  Employees should have a voice in choosing discussion topics, and conversations should include their perspectives and needs.  Don’t confuse feedback conversations with micromanaging or being overly prescriptive about how employees approach their work.

Create accountability. While “accountability” can have a negative connotation (probably from conjuring an image of dreaded, outdated, end-of-year performance reviews), setting and meeting challenging expectations is an important part of performance development. Accountability conversations should include a review of progress against expectations, lessons learned, and collaborative planning for the future.  And “accountability” should include identifying and addressing hurdles to meeting expectations as well as celebrating employee successes.  In fact, employees who strongly agree that their manager holds them accountable for their performance are 2.5 more likely to be engaged.

If your organization is going to dedicate valuable money, time, and staffing to performance management, make sure those resources and activities support a meaningful objective.  Is it time for your organization to make the shift from performance management to performance development?

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