It’s Your Move

Find a New Approach

There’s a movement towards performance systems that simply work better in today’s business environment, and is driven by a model that is more dynamic, sets goals that are innovative and linked to business results, and favors continuous learning. Different from traditional performance management, the emerging method is valued for focusing on goal setting, coaching, learning and providing more continuous feedback.

But first, it’s important to remember how we got here in the first place. In 1950, Congress passed the Performance Rating Act. The law was meant to establish a method to rate federal employees. They were marked as one of three subjective levels: outstanding, satisfactory or unsatisfactory. Private and public companies quickly followed suit, rating employees and recording compensation and rewards based on those reviews.

At that time, employees were viewed only as laborers or “workers.” Performance could be measured by an employee’s output, such as the number of hours worked, the volume of goods produced, or some  other numerical value. The traditional system fails to acknowledge the value of an employee’s skills and attitude, and an employee’s ability to innovate and drive change. The traditional system also doesn’t account for how these skills and attributes are created, developed, and shift over time as company goals and needs change, along with the associated jobs. There have been some iterations along the way, for example forced ranking, but for the most part those tweaks did not stray too far from the traditional model.

Today, that’s changed. More than 70 percent of the U.S. workforce is employed  in service or knowledge-related jobs. In fact, some argue we have evolved out of being a service economy and into being a knowledge economy. What is clear is that producing output is no longer the benchmark of performance. Done well, employee performance management offers an opportunity for companies to move beyond accountability to accomplishment – to progress from mere performance reviews to increasing every employee’s contribution to the organization.

There are a number of reasons why traditional methods just aren’t working any longer, but in our view the biggest is the damage traditional systems cause to employee engagement, retention and performance. This alone is a reason to look for a new approach.

Sources: Performance Management Innovation: HR’S NEXT BIG MOVE, Human Capital Institute; Change 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