Follow the Yellow Brick Road

Six Steps to a New Performance Management Model

There are six key elements to a new and innovative performance management system, according to Human Capital Institute, that differentiate it from traditional performance management models.

  1. Strengths-based development seeks to develop an employee’s strengths and potential, rather than focus on limitations, making corrections, or being output-driven. It shifts the conversation from remediation to being more growth-focused. Too many managers focus on fixing people’s weaknesses or simply ignoring employees altogether. This doesn’t improve performance.
  2. Performance goal setting that sets expectations that effectively align with the goals of the employee, their team, and with strategic business goals. It involves understanding the difference between traditional SMART goals (goals that are specific, measurable, achievable, and relevant) and the more dynamic model of OKRs (objectives and key results). OKRs focus on giving people “stretch goals” and helping to establish regular, achievable results that individuals and their co-workers can support.
  3. Effective, continuous feedback or a commitment to recurring conversations. This creates a transparent appraisal system that keeps employees well informed and included the process; can enhance perceptions of fairness with evaluations and increase the likelihood that employees will accept feedback; facilitates a collaborative review system; and keeps senior leaders invested in the process. This way there are no surprises or resistance to feedback.
  4. Coaching for performance where managers are responsible for the growth and development of their employees. It requires managers and team leaders to look past what they think of an employee, and instead ask themselves what they can do to help that person heighten their performance. In other words, managers can drive engagement by focusing on performance.
  5. Rewards for a job well done — whether through pay-for-performance or another compensation model — will always be a critical piece of performance management. Rewards are more fluid than they used to be and are more tightly aligned to real-time results and business goals. “The compensation process is being broadened,” according to Deloitte. “Companies are starting to base compensation decisions on the competitive value of an employee and real-world market conditions.”
  6. Social recognition drives greater employee engagement and higher performance. A culture of recognition not only recognizes the value of both formal and informal rewards, it also encourages managers to offer rewards and recognition more frequently and to make sure rewards are timely and personally meaningful to employees. It encourages and empowers employees to leverage social media of all sorts to recognize their peers and share that recognition outside the company walls.

HR has always been viewed as process-heavy, compliance-oriented, and disconnected from the reality of the business. Moving from traditional performance management to a new, innovative model represents a bold opportunity for HR to make an impact on employee engagement and business results.

Sources: Performance Management Innovation: HR’S NEXT BIG MOVE, Human Capital InstituteChange the Performance Management Conversation, Jackie Messersmith, Talent Management LLC

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Jackie Messersmith is President and CEO of Talent Management LLC. Talent Management provides consulting services to small to mid-size businesses to put a top performing company culture and talent strategy in place, and is the developer and distributor of Talent Snapshot®, an integrated, competency-based, “in the cloud” talent management solution. Jackie can be reached at 513-528-9700 or