Reengineering Performance Management

The practice of reengineering started in 1993 with Mike Hammer and Jim Champy's book, Reengineering the Corporation, followed two years later by Champy's Reengineering Management. Twenty years later, we're still reengineering things in organizations. The latest is performance management.

Remember when your mother told you "If you don't have anything nice to say, don't say it"? Well, some organizations are taking this to heart when it comes to performance management. In February, The Wall Street Journal reported on companies that have been reengineering their performance appraisals to put the focus on employees' strengths and accentuate the positive. The companies include VMware Inc.; Wayfarer, Inc.; and the Boston Consulting Group.

Marcus Buckingham and Ashley Goodall recently wrote in Harvard Business Review about the work they are doing at Deloitte to reinvent the company's performance management system. They are making it nimbler, real-time, and more individualized, with a focus on fueling future performance rather than assessing it in the past. Out with the once-a-year, time-consuming event that's dreaded by managers and employees alike, and on to meaningful conversations between managers and employees. The objectives of the new system are to recognize performance, to see performance clearly, and to fuel individual performance.

To achieve the second objective, team leaders are asked to answer -- on a periodic basis, not just once a year -- four future-focused questions regarding what they would do with each team member, rather than what they think of the person.

Two questions use a five-point scale from "strongly agree" to "strongly disagree" to measure:

1. Overall performance and unique value to the organization: Given what I know of this person's performance, and if it were my money, I would award this person the highest possible compensation increase and bonus.

2. Ability to work well with others: Given what I know of this person's performance, I would always want him or her on my team.

The remaining questions use yes-or-no responses to identify:

3. Problems that might harm the customer or team: This person is at risk for low performance.

4. Potential: This person is ready for promotion today.

The simplicity and ease of this "appraisal instrument" should make everyone leap for joy. However, the process doesn't stop with answering the questions. Remember, performance management is a system, not an event. An integral part of the new Deloitte process is tied to the last objective -- to fuel performance -- and the conversation or check-in between employee and team leaders. Their purpose is to provide clarity -- what's expected, why it's expected, what great work looks like, and how it can be achieved in the short term (we're talking days). Check-ins must be frequent to be effective, and to ensure that they happen, the system is designed to have the team member (who's eager for feedback and guidance) initiate them. Talk about innovation -- a radical redesign to the entire process and culture of performance management.

While everyone's been buzzing about Deloitte's four questions, I was most taken by the third objective, to fuel performance rather than improve performance. It's exactly what the other companies are doing. Recognize strengths and leverage employee talent to grow the individual along with the organization. There's much to be said about lessons learned -- but too often, those exercises focus on the negative. Yes, the past can give us great feedback, lessons, and history, but they might as well sit in dusty books on shelves (or in file drawers) if we aren't going to take them into the future.

It's often been taken for granted that good performers need no encouragement for future performance. Finally, organizations are discarding this assumption and putting energy into inspiring all employees.