The secret is out. Many organizations used to think of performance management as a backward-looking assessment program owned by HR. No longer. Performance management is being reinvented for a new, forward-looking purpose: to serve as an efficient, focused business process that improves employee engagement and drives business results.
Redesigned performance management processes may or may not include year-end ratings, but across the board, they tend to focus less on evaluation and more on agile goal setting, regular feedback, coaching, and development. They shift the focus away from forced-distribution rankings and much more toward helping managers coach people to succeed. By changing this one HR “ingredient,” it is possible to affect many others.
Our research indicates that the transformation of the aging performance management process is long overdue. Last year, only 8 percent of the HR respondents in our survey believed that their performance management process drove business value.1 This year, the importance of performance management rose significantly, with 75 percent of respondents rating it an “important” or “very important” issue, up from 68 percent last year.
Read more: Performance management redesign | Deloitte University Press | Global Human Capital Trends 2015
I’ve engineered our start-up model around much broader management principles, making it quite difficult for me to find any value in this antiquated ‘top-down’ business approach. One thing that spawned this across-the-board thinking was my taking just 3 minutes to watch that TV show where the CEO trades places with the average joe on their company shop floor. No longer could I stomach our family’s restaurants with their “me-me-me-and even more for me,” top-down means of directing staff. “Success” now means empowerment for everyone, at whatever level of responsibility they are ready to accept.