n a fast-changing, knowledge- and skills-based economy, talented employees are key to

an organisation’s success. Yet job satis- faction is now at its lowest level in more than two years and almost a quarter of employees are looking for new jobs.1


retain their best employees, many busi- nesses are focusing on fostering engage- ment through growth and development. Te latest best practice in performance management supports this approach. Traditional performance manage- ment in the form of the annual appraisal is too infrequent to meet the needs of today’s business environment. Workforc- es are now not only more global, they are made up of multiple generations with diverse cultural backgrounds, and the increasing reliance on temporary and contract workers adds to the complexity of how organisations can best support their people in delivering outcomes that matter. Te traditional approach to talent management no longer works. Performance management has

shifted as a result, no longer top-down but rather, reflecting emerging flexible structures within organisations. Accord- ing to Bersin Deloitte,2

“Companies to-

day are turning into ‘networks of teams’ so many of the traditional management practices we developed over the last 20 years are open to debate … Careers are more dynamic, young people are asking to be promoted into leadership much faster, and the worlds of recruitment, performance management, and train- ing are now driven by the employee”. Yet many employees do not feel able to fulfil their career aspirations in their current organisation – more than a third (36 per cent) saying it is unlikely or very unlikely that they will be able to do so, while only a third (33 per cent) believe it is very likely or likely.1


Te performance management process must shift from the once-a-year, rear- view perspective approach of the annual appraisal towards being a more flexible process that mirrors the rhythms of the business. Performance management must also reflect the rate of devel- opment of individuals. It is no good providing an annual appraisal when an individual has changed job roles three or four times within that period. Furthermore, there is a strong link

24 | july 2016 |

between the contribution an employ- ee makes to the business and how satisfied he or she is. If an employee feels they are making a worthwhile contribution, they are likely to be more engaged. However, employee contribu- tion and employee satisfaction are not entirely interdependent. It is possible that an employee is happy and satis- fied at work, while not contributing effectively. An effective performance management process must address both employee satisfaction and contri- bution in order to drive engagement. Performance management processes

also have a reputation of being a heavy drain on time and productivity, yielding underwhelming results. Employees need and want ongoing feedback, coaching and development, and the annual review

Managers must ❝

understand that high- potential employees are not the same as high- performing employees

is too late to make an impact. How- ever, when performance management is embedded into the rhythm of the business, it is much simpler for man- agers and employees to communicate about what is working well and what isn’t and to redirect focus as needed.

Manager/employee relationship

Te manager/employee relationship is now at the heart of the performance management process. Some sources say that up to 70 per cent of employ- ee engagement is impacted by their relationship with their manager3


Managers play a key part in ongoing performance management, understand- ing what motivates their employees and providing them with the right level of challenge to motivate and engage them. As a result, managers must take on

more of a coaching role with their em- ployees, fostering a two-way exchange that builds communication and trust. To make these discussions meaningful to the employee, these conversations should focus on employee contribu- tions, and should clarify expectations and accountability around goals and

development. Tey should also be used to provide timely feedback, recognition and coaching. When these conversa- tions take place regularly, employees are better able to understand what behav- iours they should continue and which ones are not supporting their produc- tivity and professional development. Tis latter point is important because learning and development is a key aspect of ongoing performance management. Talented employees, especially mil- lennials, have an expectation that their organisation will provide them with the skills they need to grow. If these opportunities are not forthcoming, they are very likely to leave the organisation. Learning and development need not just come in the form of traditional classroom training sessions or even e-learning, but rather, should incorpo- rate on-the-job development opportu- nities. For example, stretch assignments that play to the employee’s strengths and interests and support the develop- ment of new competencies provide an opportunity for employees to use and grow their skills and abilities at work. Managers should also foster supportive team collaboration that leads naturally to peer mentoring. Employees must take ownership of their own development by openly discussing career goals, collabo- rating on development plans and defin- ing specific development activities with their managers that will help them grow. Making the shift to this more ongo- ing and agile approach to performance management truly requires a manager/ employee relationship built on mutual trust. Great managers ensure healthy communication, which is a behaviour that fosters engagement. However, managers must be supported to take on more of a coaching role. L&D plays a critical role here in guiding managers and providing them with the right tools to enable them to listen, measure and act on employee needs.

Focus on strengths

Te traditional performance manage- ment process tends to focus on skills gap analysis. Today’s performance man- agement approach gives more weight to strengths-based development. In other words, as well as identifying areas for improvement, the process identifies areas where the employee is particularly talented that could be developed still


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