Did you know that some of the most flawed aspects of performance management have actually been around for centuries? Chinese civil servants had stack ranking in the third century. And officers in the Napoleonic wars were subject to 360 degree reviews. Despite its long history, no one’s ever been thrilled about the performance management process. Even high-performing employees dislike reviews, and most managers certainly don’t enjoy giving them. What can we do to make it less about “managing” performance and more about reinforcing behaviors and coaching our employees to even greater success? Which new practices are companies adopting and how effective are they? Join Rob Schmitter, Solutions Architect and Melanie Schrems, Strategist and Consultant from Globoforce as they discuss the evolution of performance management and where its headed. You will learn: The business value of positive reinforcement & social recognition New research on cutting edge performance management practices How ongoing, crowdsourced feedback can enhance the review process

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Frequently
Asked
Ques6ons

7. THE EVOLUTION OF
PERFORMANCE MANAGEMENT
September
22,
2016
MELANIE SCHREMS
ROB SCHMITTER

8. Melanie Schrems
Strategist
and
Consultant,
Globoforce
Rob Schmitter
Solu;ons
Architect,
Globoforce

9. AGENDA
• History of performance
management
• Current state of the annual
performance review
• New research and cutting-edge
practices
• Rise of teams, crowdsourced
feedback and its impact on
performance management

10. What is your company’s practice today for annual
performance reviews?
o We have a traditional approach and have no plans to
change
o We are currently exploring alternative methods
o We don’t do annual reviews, rather more frequent
check-ins, but still use performance ratings
o We don’t do annual reviews, rather more frequent
check-ins, and have abandoned performance ratings
POLL QUESTION 1

11. A BRIEF HISTORY

12. ANNUAL PERFORMANCE REVIEW –
THEN
1950 Performance Rating Act
Purpose was to ensure that performance ratings were used to
recognize merit and contributions to efficient operation; to
strengthen supervisor-subordinate relationships; and to improve
individual effectiveness.
1954 Incentive Rewards Act
Authorized honorary recognition and cash payments for superior
accomplishment, suggestions, inventions, special acts or services,
or other personal efforts

13. ANNUAL PERFORMANCE REVIEW –
NOW
95%
70%
of managers dissatisfied
with the performance
management process
DO NOT believe their
company’s PM system
improved performance
90%
HR heads believe PM
process does not yield
accurate information

14. RECKLESS WASTE
OF TIME & MONEY
200
# of hours the average
manager spends on
performance review
activities
25
business days
3M
average spend on
reviews for a 10,000-
employee company

15. PSYCHOLOGICAL IMPACT
Fight or flight mode
• 50% surprised at their rating
• Of those, 90% are unhappy
because they expected a higher
rating – their engagement drops by
23%
Fixed mindset vs. growth mindset

16. AND THE ‘SHORTFALL’
LIST GOES ON
• Not developmental
• Not aligned with the changing
workforce demographic
preferences
• Considers limited perspectives
• Subject to social cognition biases
• Failure to evolve with shifting
business priorities

17. CUTTING EDGE PRACTICES

18. CUTTING EDGE
PM PRACTICES
• Frequent check-ins and a
brief annual summary
• Employees use a mobile
app, PD@GE, to give one
another feedback at any
time
• Pilot groups are trying
reviews without ratings
• Emphasis on coaching
throughout with a positive
tone – growth mindset

19. CUTTING EDGE
PM PRACTICES
• A shift from annual forced
ranking to more frequent,
informal conversations between
managers and colleagues
• Fewer valued staff leaving and
increase in “involuntary, non-
regrettable attrition”
• Retaining the right people

20. CUTTING EDGE
PM PRACTICES
• No longer reliant on annual
review
• Employees receive regular
feedback from managers on
progress
• Goals adjusted throughout the
year
• Encourage greater speed,
creativity and teamwork

21. RATINGLESS APPRAISALS
ONGOING FEEDBACK
CROWDSOURCED FEEDBACK
CUTTING EDGE
PRACTICES

22. RESEARCH SHOWS…
• 97%
or
organiza;ons
use
ongoing
feedback
• 50%
of
organiza;ons
surveyed
use
ra;ngless
appraisal
• 25%
use
crowdsourced
feedback
The
most
effec6ve
combina6on
of
prac6ces
was
the
use
of
all
three
cuAng-­‐edge
prac6ces
or
the
use
of
ongoing
feedback
plus
crowd-­‐sourced
feedback

23. What cutting-edge performance management
practices is your company using today?
o Ongoing feedback only
o Ratingless reviews only
o Crowd-sourced feedback only
o All three or a combination of these practices
o None of these practices
POLL QUESTION 2

24. WHY NOW:
ONGOING FEEDBACK
• Helps
build
posi;ve
rela;onships
between
managers
and
colleagues
• Helps
to
solve
problems
in
real
;me
• Fits
the
fast-­‐paced
strategy
of
many
businesses
• Increases
focus
on
development
• Leads
to
more
valid
performance
reviews
and
beLer
pay
for
performance
• Helps
create
a
posi;ve
feedback
culture

25. WHY NOW:
RATINGLESS REVIEW
• Ra;ngs
demo;vate
-­‐
Fight
or
flight
response
• Saves
;me
• Allows
managers
and
employees
to
directly
address
performance
versus
ra;ngs
• Leaves
more
room
for
discussion
around
employee
development
• Encourages
collabora;on
versus
compe;;on

26. WHY NOW:
CROWDSOURCED FEEDBACK
• More
natural,
specific,
;mely
and
useful
• Fits
team-­‐based,
modern
org
designs
• Helps
to
create
a
posi;ve
feedback
culture
• Managers
can
leverage
feedback
captured
for
a
robust
view
of
performance

27. RISE OF TEAMS
Since
performance
exists
only
in
teams,
we
must
build
all
of
our
tools
around
iden;fying
which
teams
currently
exist
and
who
is
on
them.
If
we
don’t,
we
run
the
risk
of
con;nuing
to
do
performance
management
in
a
parallel
world
to
one
where
performance
actually
occurs.
“
-­‐ MARCUS
BUCKINGHAM

28. HOW SOCIAL RECOGNITION
SUPPORTS THIS EVOLUTION

29. CROWDSOURCED FEEDBACK AND
PERFORMANCE MANAGEMENT
Source: SHRM/Globoforce Employee Recognition Survey 2013 Report
Would crowdsourced recognition
be helpful data to incorporate into
performance reviews?
Which would provide a more accurate
picture of employee performance?
Yes,
78%
No,
22%
Feedb
ack
from
supervi
Feedb
ack
from
manag

30. PRAISE + PRIZE = POWERFUL MOTIVATOR
Source: SHRM/Globoforce Employee Recognition Survey 2013 Report
6%
94%
0%
20%
40%
60%
80%
100%
Negative Feedback
Positive Feedback
What has a greater impact on performance
– negative or positive feedback?
83%
17%
0%
20%
40%
60%
80%
100%
Recognition with reward
Recognition without
reward
Are employees more motivated by
recognition with or without a reward?

31. RECOGNITION BOOSTS PRODUCTIVITY
increase in engagement
from recognizing
employee performance
60%
higher productivity from
engaged companies
63%
of best in class
organizations state that
employee recognition is
extremely valuable in
driving performance
60%

32. KEY TAKEAWAYS
The evolution continues with…
• A focus on human-to-human
interactions
• Frequent conversations that
accommodate shifting
business priorities
• An approach better aligned
with motivation science
• HR providing structure and
guidance
Critical success factors:
• Managers need to see value in
ongoing effort
• Managers need to act as
coaches (may require training)
• Success of crowdsourced
feedback dependent on
employees understanding how
to effectively give feedback

34. THANK
YOU

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