How to build an effective performance management culture

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min read
November 12, 2020
May 17, 2024
How to build a performance culture
In this article

Effective performance management is about finding an approach that enables employees to perform the best they can. This approach will be different depending on the size of the company, how and where employees work, and the aims of the organisation.

Companies that excel in adopting an effective performance management culture are the ones that work in partnership with their employees, listening to and understanding their needs. They create processes and structures that align everyone in the organisation to common goals. Just like a rowing boat, the most successful teams are the ones that work in harmony, pulling in the same direction.

At Appraisd, we have worked with hundreds of organisations to help them find the solution that works best for them. While no two businesses are the same, there are some common themes that recur again and again. Based on our extensive experience, here are some key elements to remember.

Believe in what you are doing

Ask yourself why are you doing reviews in the first place? What is the motivation behind it? Is it because you think you should, because everyone does them? Is it to calculate bonuses and pay rises? Is it because you want to give your employees direction and focus? Whatever the reason, it needs to be more than a tick box exercise if it is to work, valued for it’s own sake rather than a means to an end.

It needs to be centred around your employees and what you can do in conjunction with them, to develop and nurture their talent, both for their own sake and that of the business. This process must have support from the top of your organisation and can’t be limited to your HR department. There must be a least one champion in the business who is willing to back what you are doing with words and with deeds.

“We have come a long way with regards to performance management in the last few years”, says Marylin Peach, Head of People Ops at the UK’s leading casting resource, Spotlight. “The enthusiasm and support of our CEO has really helped to galvanise the senior leadership team and get them behind our vision of giving employees more control over their own development.

“Another important step was removing the link between pay and reviews. We also got rid of our scoring system, which we found to be very subjective and inconsistent across the business. Now our employees are much more relaxed in their reviews, knowing that they are there to help them reach their goals, not to pass judgement on them. The benefit for all is much more obvious.”

Trust your employees

The very first interaction between an employer and a new employee recruited to the organisation is based on an element of trust. When a candidate is hired, a decision has been made that they are the best person for the job. They have the skills and experience that fill the gap in the organisation. The trust is there that they can do what is required. Sadly, in some companies this trust quickly evaporates and employees are not given the license to control their own development. If employees are constrained, forced to follow rigid structures, told to follow, rather than encouraged to lead, it is not possible to create a culture that will foster growth and development.

“I joined the business in November last year and we’ve been on a massive journey over the last eleven months with our people”, says Jade Bessent, Human Resources Manager at SMD Ltd. “I conducted a review of the current process and employees felt the questions being asked were too generic and supportive, focusing on things like timekeeping, rather than what value they bring to the company. Now the questions are much more related to each individual and their role. We trusted employees to set their own objectives and KPIs and the results so far have been amazing. We’ve just completed our first found of reviews and the biggest difference was that employees were excited to complete them. They wanted to add in more detail and were putting in far more effort as they could clearly see them benefit of doing so.”

An online tool is great step forward, but it doesn’t solve everything

There are so many benefits to moving reviews online – it saves time, it keeps everything in one place, it makes them easy to update, it allows greater collaboration and visibility to name but a few. For organisations of any size, it is a vital component that is required if performance management is going to be effective. But, and this is a big but, it is not a silver bullet. It will not change things overnight. A system is only as effective as the people using it. If they don’t understand what they are doing, why they are doing it and don’t see the benefit then the best system in the world will not make the desired difference.

However, a system can help change behaviour. “The meeting rooms in the Spotlight offices have glass walls”, says Marylin. “When we introduced Appraisd, I started to notice a difference to how reviews were being conducted. Before, managers would sit opposite employees and oversee the conversation. Now, in reviews I see managers and employees sitting side by side, both looking at Appraisd on a laptop, having a much more vibrant, engaged conversations.”

Take everyone on the journey

This is not a solo voyage; everyone needs to come along for the ride. The key is starting a conversation with employees, listening to what they want, what matters to them, and what they want to get out of the process. Performance management needs to be something they can understand, identify with and get behind. If they can see the value and the benefits for them, the more enthusiastic and involved they will become. Once this process has begun, employees will start to take ownership, and it becomes ingrained in their thinking and working day.

“We spent a lot of time listening to our employees really carefully and it’s changed and shaped our approach to performance management. I really think the key to a successful approach starts with understanding what engages and motivates your employees. For most people this comes down to feeling valued for their efforts. We’ve seen a complete change in attitudes towards reviews, our employees are now so excited about them and I feel it is really shaping the culture of the business”<div  class="author">Jade Bessent, Human Resources Manager at SMD Ltd.</div>

Not once and done

Performance management is ongoing process that doesn’t have a final destination. It should always evolve reflecting the changing needs of the business environment and your employees. This year has shown the huge value of being agile, ready to adapt to events that happen in the outside world. It is so easy for plans or objectives to become irrelevant. An effective environment must embrace change, quickly react to any situation and be open to improvements.

These changes must be at a pace that works for everyone. Changing too much too quickly can be counterproductive. Completely overhauling a system and expecting employees to understand and engage with this overnight is simply unrealistic. Introducing alterations, a little bit at a time will ensure employees are given time to understand them, absorb what they mean and get to grips with the change.

Top tips

💡 Create a vision and then build a consensus across the business, find at least one ally in the senior leadership team who buys into that vision and will champion it.

💡 Communication about what you are trying to achieve is hugely important, ask internal communications or marketing for help to get your message across effectively to employees.

💡 Involve employees as much as possible in this process, listen to their ideas and understand how they would like to develop.

💡 Look at what other organisations are doing, but don’t slavishly copy them. Take the ideas that you think work best for your organisation and ditch any that don’t fit.

💡 Don’t try and do everything overnight. Prioritise what needs to happen now and consider what can wait a little longer. Doing too much, too soon risks confusing your employees and losing their support.

💡 Make the most of Appraisd – if there is something that you would like to do and you’re not sure how to do it or if it can be done, talk to the Customer Success team. They are there to help and guide you, offering their extensive advice and expertise.

💡 Regularly review your process to see what is working and what can be improved. Don’t be afraid to scrap or alter something that you’ve added that is not having the desire effect. Be open to change and be ready to alter your approach if circumstances change.

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