5 Steps to Change Your Performance Management Process

When you think about your company’s current performance management process, what comes to mind? If the words meaningful, agile, ongoing, and effective don’t make the list, it may be time to make a change.

In the past decade, HR leaders have led the charge in transitioning away from now-antiquated annual performance reviews and easing organizations into continuous performance management.

Those companies reap the rewards in increased engagement, productivity, and retention. Now, it’s your company’s turn to get on board.

Not sure where to start? We’ll take you step by step through how to successfully transform your performance management process.

  1. Outlining reasons for change
  2. Identifying goals for your new process
  3. How to find a new solution
  4. Adopting a new mindset
  5. Rolling out the new process


Step #1: Outline reasons for change

If you’re reading this, congratulations! You know your company’s performance management model needs an overhaul. But others in your company may not be on the same page – yet.

After all, top-down annual reviews may be the norm, but are actually a proven source of anxiety for employees and managers. By contrast, continuous performance management shifts the dynamic from scary, once-per-year evaluations into an ongoing conversation. (Need more evidence? Check out our guide, Beyond the Annual Review.)

This allows managers to offer feedback in real-time, and employee to feel heard. And that leads to higher engagement, which pays off in spades.

Gallup reports high-performing teams experience:

  • 40% less employee turnover
  • 7% reduction in absenteeism
  • 48% fewer staff safety incidents than disengaged teams.

With employee engagement on the line, kick off the change conversation with your team using these questions:

If your company uses an outdated performance management system, chances are you’ll hear a few recurring themes about your current processes – such as stress, low morale, and an inability to measure their effectiveness.

As you raise these questions, your leadership and stakeholders will start to hear the message, too.


Step #2: Identify goals and the desired outcomes of your new process

Once you’ve established that your performance review process needs to change, it’s time to identify the goals of your new process and the most pressing needs of your workforce.

Each stakeholder should be able to answer the following questions:

  • How do we define success? What are our performance standards?
  • How are my goals helping drive success and change?
  • What are the anticipated benefits, risk costs, timelines and outcomes?
  • How can HR support my role as an owner in this transition?

Use these conversations to set clear expectations and measurable organizational goals, especially with those who will be most affected by the process. So, these may include:

  • Increased employee engagement (as measured by pulse surveys).
  • Fewer overall hours and resources spent on the reviews process.
  • Increased effectiveness of performance appraisals in shaping employee development and productivity.
  • Improved employee retention.

Then, with your priorities clear, it’s time to start looking for the performance management system that will get you – and your whole organization — there.

Step #3: Find a new solution

HR technology has given businesses greater insight than ever before into the potential of their human capital. Today’s management platforms offer the ability to create agile individual goals, collect data and analytics, drive peer feedback, manage and assess talent, and more.

Your tools should offer the ability to:

  1. Create and track performance goals and edit performance plans
  2. Give many types of feedback, including 360 reviews, peer-to-peer evaluations, and more
  3. Track development and strategically assess talent without a rating scale
  4. Distribute and measure surveys that gauge team members’ engagement
  5. Give real-time recognition with rewards that reflect your culture

It’s critical to ensure that your new performance management system reflects your organization’s day-to-day needs as well as your overarching overall mission, values, and goals.

Read our Buyers Guide


Step #4: Adopt a new mindset

Remember, changing your performance management process is about more than getting new tools. Your organizational culture is adopting a whole new employee performance philosophy.

Meet with key stakeholders far ahead of rollout to address the following:

Who gives feedback to whom?

If your company employs a traditional, top-down approach in performance appraisals, introducing peer-to-peer and 360 feedback may feel like a radical adjustment. But research backs the benefits: Review-related anxiety drops from 36% to 18% in companies that use peer-to-peer feedback. This makes all feedback that much more effective.

How frequently will feedback be given?

“No more annual reviews,” doesn’t mean no performance evaluation or feedback at all! Kazoo recommends quarterly goal-setting conversations. And when those are supplemented with continuous coaching and timely feedback in weekly 1-on-1s, employees are 67% more likely to feel their performance reviews lead them to do good work (compared with those receiving annual reviews only).

How will feedback be recorded….

and how will it affect promotions, raises, performance improvement, and employee career advancement?

This is a great opportunity to introduce stakeholders to the recording and reporting features in your new platform – such as setting goals, tracking metrics, and easily analyzing workforce performance data.


Step #5: Roll out your new process to your company and team

Change management looks different for every organization, but some truths are self-evident. Make sure these elements feature in your process:

Communication

When setting the stage for a big change, communication is everything. So lean into the creation of a psychologically safe culture by communicating proactively and clearly, and being as transparent as possible. (Bonus: Learn 6 ways psychological safety is affecting your work culture.)

When announcing the change, include the reasons for moving away from the old system, and encourage people to ask questions and provide feedback. The more heard employees feel, the greater their buy-in will be. (Plus, get a better read of company sentiment with an anonymous flash poll.)

Training

Offer multiple training sessions to accommodate user schedules, and be prepared to field questions ahead of rollout. Your performance management platform vendor should offer support and training resources, so make sure you’re taking full advantage of their offerings.

Create incentives for onboarding

A spoonful of sugar helps the change management medicine go down. So incentivize adoption of the new system in your company’s rewards and recognition program. Give public kudos and create custom behavior rewards for setting up a profile in the system, setting meetings, and changing goals.

Collect feedback

In addition to inviting feedback via email or in person, create opportunities to give anonymous responses via surveys, which collect and analyze data for easy-to-read insights.

Iterate

If at first you don’t succeed, try again. And if at first you do succeed, take notes and keep refining! Your successes and failures are opportunities to learn and finesse your change management strategy. (Want more opportunity to finesse? Then check out our recorded webinar on change management.)

Ready to change your performance management process and revolutionize your employee engagement, retention, and productivity? Then see what Kazoo can do for you, and how we can help make the dream of change a reality. Let’s get started.

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