Businesses have changed dramatically since the 1960s, and so have many traditional HR practices that were established during that era. Ongoing performance management has replaced the cumbersome annual review process. Real-time employee development, agile goals, continuous coaching and feedback, and social collaboration are the “new normal.” They embrace the best of how business environments operate today, with multiple generations in the workforce, a reliance on technology and a focus on building an authentic culture.
The first companies to adopt the notion of real-time performance reviews were those that were using other agile methods, such as within product development, at their organizations. Adobe, followed by other tech firms like Dell and Microsoft, killed the annual review in 2011, and by 2015 Deloitte reported that 88% of companies planned to revamp their performance management processes.
So, today is the start of a new series here on the blog. Over the next several weeks, we’ll put a face to the name, so to speak, of the companies that have taken the first steps toward their employee development transformation. These are their stories.
An unconventional company takes a conventional approach
Before undergoing its transformation, Patagonia was using an HR tool that just simply digitized the paper and file system made popular in the Industrial era. The tool was still based on the same old HR process, with employee data captured and stored via technology rather than within file cabinets. Unfortunately, both the process and the philosophy on which it was based were dated and created little value.
Patagonia’s existing performance management tool was cumbersome and difficult to use without extensive training. The administrative burden was significant, especially when it came time for the annual goal-setting and review process. Users often logged in only twice a year: once merely to recover their user ID and again when it was time to discuss their goals. It was a very traditional, hierarchal approach to performance reviews that was slow, arduous and not aligned with Patagonia’s celebrated culture of being unconventional.
Using business values as a guide to performance management
Patagonia’s starting point was truly at the very top. It wanted a new process that reflected who they were as a company and the values most important to its employees. For Patagonia, these values were transparency, collaboration and improvement.
Whether it’s around the down used in a jacket or the type of labor used in its factories, the company is committed to being transparent around its products and services. It was important that its performance development process have a very high degree of transparency around the goals set across the organization. Next, the new approach must be highly collaborative, allowing employees to work together toward goals and help each other find new ways to reach them. Lastly, they need its system to help employees get better individually and as team members. At the end of the day, performance development, to Patagonia, was about improving its employees, not checking boxes and assigning scores.
From these values, Patagonia established a new mission for performance development – to improve employee performance through effective goal setting that leveraged the crowd.
Establishing a clear path
To achieve this mission, Patagonia created a list of goals. To re-invent its performance management process, the company would need to:
- Realize its data potential. The company wanted its new approach to take data to the next level. What can the platform uncover from the conversations, recognition and activities being captured? This would arm HR with data that allows them to ask more relevant questions and drill down into performance-related metrics.
- Democratize performance. Patagonia wanted its employees to have a real-time view of their performance, and not wait for a long, subjective annual review that looked backward, covering issues out of context and oftentimes beyond repair. It wanted its employees to have access to personal performance data at all times.
- Incorporate social. Patagonia aimed to reduce personal and manager bias by enabling the power of the crowd. With multiple data points based on a series of relationships –whether from peers, managers or even customers – managers would see a more balanced picture of performance.
- Be intuitive. Patagonia needed a tool that had a clean, intuitive design that could be used without training. After all, if no one was using the tool, there would be no data or activity to manage and measure. They realized that bells and whistles, if not directed tied to improving employees, were nothing more than a distraction.
Introducing COMPASS, powered by Kazoo
COMPASS is Patagonia employees’ personal device for improved performance every day. It leverages the science of objectives and key results to help employees set goals, promotes a growth mindset by treating development as a regenerative process and leverages the power of the crowd through an easy-to-use interface.
You can read more about Patagonia here: Fortune article: How Patagonia Keeps Employee Turnover ‘Freakishly Low’