Download Your Free eBook on the Performance Management Cycle.
The cycle of development in performance management includes a number of key steps, all of which are covered in the performance management certification from the Institute for Performance Management.
Fast-growing companies and traditional companies have different performance management needs due to their distinct growth trajectories and operating environments. For example, traditional companies that are growing more slowly typically conduct annual or bi-annual performance reviews, while fast-growing companies may need more frequent check-ins to adapt to rapidly changing goals and objectives. Quarterly or even monthly reviews can be more effective in aligning employee efforts with the company's shifting priorities.
Similarly, fast-growth environments require a more agile approach to goal setting. Employees' objectives should be aligned with the company's evolving strategy, allowing them to adapt their contributions as the company expands and pivots. Regularly reviewing and adjusting goals is crucial for maintaining alignment.
Attracting and retaining top talent is also even more critical for fast-growth companies, making performance management an essential tool for employee engagement. Frequent, constructive feedback and recognition programs are required to boost morale and foster a growth-oriented culture, making the company an attractive destination for high-performing individuals.
Managing the performance of staff is a critical activity at every company. Employees are well recognized as one of the largest costs, but also the greatest asset. For fast-growing companies, talent management and the performance of that talent is even more important. At the end of each day, much of the organizational learning walks out of the door and it is critical that it comes walking back in the following day. Once a company scales beyond the initial founding team, the stability and success of a fast-growing company is hugely dependent on staff loyalty and performance.
Do traditional models of performance management remain relevant for fast-growth, particularly high-tech or eBusiness organizations? How might new models or adaptations of traditional models deliver more effectively? Download our free eBook to learn best practices in the performance management development cycle for fast-growing companies.
Excerpt from the eBook:
Successful performance management is key to the long term success of any business. Traditional approaches to performance management included annual planning combined with annual reviews. It typically involved a performance appraisal with a self-evaluation form followed by the annual review. However the workplace has changed since the advent of this original model. Employees no longer work in the style of the industrial era that produced this management tool. Is this traditional approach still fit for purpose? Or are there more effective ways to manage performance in the modern business?
The reality is that few managers or team members enjoy the process of annual performance reviews and appraisals. Both parties find its purpose confusing and the process frustrating. More importantly research indicates that the traditional process delivers unpredictable results that are also difficult to measure.
Much of the frustration with performance management and appraisals comes down to the questionable link between productivity and performance, while many managers and team members find performance reviews time consuming and frustrating. The changing nature of work in modern businesses is also mismatched with the industrial era model of traditional performance management systems.
The concern for management teams of course is that if we simply cancel end of year performance reviews, what will happen to team and business performance? Will performance drop? How will high performers be compensated? How will low performers be motivated better?
An interesting example of a large company moving from a traditional model to a more modern performance management model is Adobe. Adobe based its decision to move away from traditional performance appraisals on the fact that the annual process required 80,000 hours of time from its 2,000 managers, the equivalent of 40 full-time employees. Additionally, their internal surveys suggested that the workforce felt less motivated and inspired after each appraisal.
Instead of annual reviews, Adobe implemented regular update meetings during which managers provide coaching and advice. The objective is to help employees gain clarity about what is expected from them, guide them through performance improvement and assist in their overall career progression.
Netflix is another large company that no longer measures its employees against annual targets. This is because its objectives change so rapidly that annual performance reviews simply cannot keep pace. Google is also famous for creating its own proprietary performance management system and processes.