In an organization, performance management is an ongoing process that includes setting expectations, measuring and assessing people’s performance, and providing feedback for performance improvement.
Through this activity, the business can ensure that people work and contribute to the same goals in the organization.
Yet many organizations are now using a hybrid approach to performance management, combining traditional practices with new and more innovative ones. So, what does it sound like? Do those approaches truly improve performance management in the organization?
A Detailed History of Performance Management
Performance management has been a vital component of organizations for decades, and its evolution took place at the beginning of the 20th century.
For further details, let’s go over the history of performance management and its transition from development to accountability and then back to development again.
1. Development-driven Performance Management
In the early 1900s, performance management focused on developing people’s skills and capabilities. Organizations use a range of tools such as training, coaching, and mentoring to help employees improve their work performance. This approach was called the developmental-based performance management approach.
We can find an example of this approach by understanding the theory of scientific management by Frederick Winslow Taylor. This approach required high-qualified training and development to ensure employees have the skills and knowledge needed to perform their work.
2. Accountability-focused Performance Management
By the middle of the 20th century, performance management had moved from a developmental approach to a system of accountability. This change was mainly due to the need to evaluate employee performance in determining compensation, promotions, and termination.
The accountability-focused approach focuses on setting specific targets, measuring performance on those targets, and using performance reviews to hold people accountable for their performance. One example is the Management by Objectives (MBO) approach.
During the period of accountability-based performance management, organizations used performance evaluations, ratings, and rankings to evaluate people’s performance. That approach has been criticized for being too bureaucratic, demotivating, and unfair.
3. Return to development-driven Performance Management
In the 1980s, organizations found the accountability approach ineffective in improving employee performance and supporting business outcomes. As a result, the development approach was revived.
Organizations have begun to focus on giving feedback, coaching, and training to employees to help them improve their job performance. This change is due to the fact that employees are more motivated and committed when their organization invests in their development and growth.
How to Improve Performance Management with a Mixed Development-accountability Approach?
Nowadays, organizations use a hybrid approach that mixes elements of both methods to create a more efficient and attractive performance management system. Managers now set clear and measurable employee goals, provide regular feedback and mentoring, and use performance reviews to foster development and compensation decisions.
The following steps lead to improvements in performance management through that hybrid approach:
1. Identify clear performance objectives.
It is essential to set clear and measurable goals for each employee. Use the SMART framework (specific, measurable, achievable, relevant, and time-bound) to establish clear and meaningful goals that are easy to follow and achieve.
2. Establish a performance management system.
An open, fair, and consistent performance management system should be established. These can include regular performance appraisals, feedback sessions, and goal setting.
3. Integrate hybrid development.
Hybrid development applies a combination of traditional training methods and more recent and innovative techniques such as online learning, social learning, and workplace learning. Integrating mixed development can help employees learn and practice new skills on the job.
4. Provide ongoing feedback.
Regular feedback is critical to performance improvement. Managers are responsible for providing feedback on a regular, constructive basis. Feedback should also be specific, timely, and focused on behaviors that are subject to change.
5. Recognize and reward performance.
Recognizing and rewarding performance can help motivate employees, increase job satisfaction, and improve retention rates. Recognition should not always take the form of cash rewards. Other ways of recognizing and rewarding performance include time off, flexible work arrangements, public praise, or even true thanks.
6. Continuously monitor and evaluate.
Ongoing monitoring and evaluation are critical to performance management as it enables organizations to track progress, identify areas for improvement, and make evidence-based decisions.
Companies can create a balanced system for fostering employee performance and growth by integrating accountability and development approaches into a hybrid performance management model. Indeed, it will help people reach their goals and expectations as well as feel supported and enabled to develop their skills and abilities.