Performance management is often regarded as a necessary evil instead of as a vehicle to reinforce the direction and values of the organization. Part of the problem lies in how most companies address it. Most focus on performance assessment, so it’s understandable that many employees and their managers alike would rather avoid the whole affair.
Organizations would be better served if they changed their mindset and saw performance management as a way to manage an employee’s contribution. This distinction would turn the oft-negative process into a more positive, strength-identifying approach.
Such an approach would encourage employees to stretch themselves, try new things and consider unproven new solutions to problems they might not attempt if the focus is on avoiding punishment. It also would relieve managers of a “hold people accountable” mindset and replace it with a “how can I help you succeed with the new responsibilities you are taking on” approach.
For organizations looking to take a more positive approach to contribution management, three key strategies need to be in place.
Create well-defined goals. Employees who see how their contributions impact the company’s overall goals are more invested in their work and produce better results. Research by The Ken Blanchard Cos. into the factors that contribute to employee work passion found that meaningful work correlates positively with intentions to stay with an organization, perform at high levels, apply discretionary effort, endorse the organization and be a good corporate citizen.
When employees own their contribution and are empowered by a clear line of sight into organization goals, they connect the dots between their work and the work of the overall organization to derive meaning and satisfaction.
Keep feedback positive. A line of sight begins by creating a clear, consistent business language that everyone can understand, think in and speak. This allows people in every department to see the full impact of their work and how it affects others.
The process begins by cascading goals down from the boardroom. Senior leaders will typically share key strategies and objectives through a formal business plan. This ensures that managers of each department or business unit are clear on where the organization as a whole is heading.
There is a strong need for coordination at this point that requires cross-departmental communication. Meetings between senior and operational leaders are essential to reduce or eliminate overlap, conflict and competing priorities and to allow members of different departments to see where they can support each other.
From here, the strategic priorities are translated into business unit or departmental goals. Each manager in turn then shares the departmental goals with his or her employees to identify individual performance goals and plans.
To create strategic integration, roles and competencies must be linked to specific actions and results in ways that support business unit and strategic organization goals. An impact map process can be used to connect each person’s job performance to department goals and to the goals of the organization.
Impact mapping sets the stage by communicating objectives and setting an actionable plan to guide the employee to achieve goals.
For example, the SCI Group, a warehouse and logistics firm, has been using an impact mapping approach for more than 10 years in its Progistix division. It was originally driven by a need to focus employees on critical goals, make work meaningful and improve communication.
Steve Phinney, the company’s senior vice president of corporate services, said the results have been foundational to its success. Benefits include reduced conflict, elimination of silos and greater engagement with employees at all levels. Also, in the 10 years since implementing the approach, the company has seen its percentage of employees who report knowing what’s expected of them rise from 50 percent to 80 percent.
Commit to day-to-day coaching. Once performance objectives have been cascaded down through each level, the next area of focus in a contribution management approach should be between the employee and his or her immediate manager.
Using the impact map as a reference, the employee and manager should set up recurring one-on-one meetings to regularly monitor progress against goals. The time also can be used to solve roadblocks, change goals as business direction changes and re-evaluate training and resource needs.
This conversation is critical. It’s also where follow-through usually breaks down, with time as the usual culprit. A coach-style approach that allows a manager to connect with the employee, focus the conversation, develop an action plan and review next steps works best. This quickly and effectively creates the safe, focused and supportive environment, in turn allowing for productive conversations.
In Coaching in Organizations, authors Madeleine Homan and Linda Miller recommend a C-FAR strategy. C-FAR is an acronym that helps managers remember four components that lead to successful performance and development conversations.
• Connect by building rapport and setting the context.
• Focus by identifying topics and goals to be discussed.
• Activate a conversation by determining strategy and tactics for specific goals.
• Review by recapping the discussion to ensure clear agreements.
Once a manager has created a safe and supportive space to talk, the conversation can turn to individual goals, employee development level and the amount of direction and support an employee feels he or she needs to accomplish the goal or task. Assessing those needs accurately requires identifying an employee’s current competence at a task and commitment to elevating it.
For contribution management to work, a manager has to assess competence — where an employee is with a given task — and identify what he or she needs to succeed. The manager also has to assess commitment and partner with the employee on the proper levels of direction and support.
Competence is the knowledge and skills an individual brings to a goal or task; it is best determined by demonstrated performance. Competence includes certain skills that are transferable from a previous job, such as the ability to plan, organize, solve problems and communicate well. These skills are generic and transferable from one goal or task to another.
Commitment is a combination of an individual’s motivation and confidence about a goal or task. Motivation is the level of interest and enthusiasm a person has for a particular job. Confidence is the extent to which a person trusts his or her ability to do the goal or task. If either motivation or confidence is low or lacking, commitment as a whole is considered low.
Tracking employee development over time identifies four typical individual employee development stages (Figure 2). One of the better known leadership models in use today, Situational Leadership II, characterizes these four stages as enthusiastic beginner, disillusioned learner, capable but cautious performer and self-reliant achiever.
The individual leader’s goal is to match his or her leadership style so it’s appropriate to an employee’s development level on a specific goal or task. The leader provides the direction and support an individual needs to maximize his or her contribution and move the development continuum from Level 1 (enthusiastic beginner) to Level 4 (self-reliant achiever). As the development level changes, the leader’s style should change.
Although sometimes discomforting to hear, feedback supported with regular documentation is an important part of the one-on-one conversation. Goal progress discussions, along with all performance feedback, should be delivered with respect and be objective and supportive. Specific examples provide clarity and help the employee focus on future improvements. It is crucial for the manager to listen to the employee’s perspective and incorporate his or her observations into future plans.
This is also where an understanding of the organization’s overall objectives and goals, and how individual efforts contribute, becomes essential. If, for example, people understand how their actions support a specific area of the business, it’s easier for them to understand the impact when deadlines or other expectations are not met.
Timely feedback is a key component of the performance management process that CEO Garry Ridge has put in place at household products manufacturer WD-40 Co.
Ridge said performance reviews should be an ongoing process instead of a once-a-year assessment. Therefore, WD-40 managers are required to conduct quarterly performance check-ins.
The effort is part of Ridge’s “helping people get an A” philosophy, which makes sure managers check in with their direct reports regularly to make sure employees have the resources they need to succeed. Managers use the quarterly check-ins to look at progress toward goals, identify roadblocks and discuss what can be done to improve performance.
When done right, contribution management is more than a name change. It is a complete rethinking of the performance appraisal process — a move away from assessment and evaluation and a move toward partnering for performance. Contribution management should be the key to achieve the organization’s goals in a way that is driven by the employee, with the manager and employee agreeing to the goals and creating a roadmap of how best to get there.
John Slater is a client solutions partner and David Witt is a program director with The Ken Blanchard Cos. They can be reached at firstname.lastname@example.org.