Many companies are currently looking at redefining employee performance ratings. Although these have been considered for years as the best way to assess individual performance, many surveys now show that they are often a factor of disengagement for employees, preventing managers and employees from undertaking transparent dialogue. Surveys suggest that when there is dialogue, it is focused on past achievements and rarely looks to the future, including employee’s development and career aspirations. It’s also a dialogue that takes place no more than twice a year.
Some people are still hesitant to facilitate the change to eliminate performance ratings. Although they can be demotivating, in many cultures they are embedded in our DNA, with ratings and ranking principles having started to become the norm at school. It’s not just about eliminating a step in a process, this is a true cultural change that companies need to embark on. Also, when eliminating ratings, some questions arise: How will we give recognition to employees? How will we reward performance?
At SAP, we have just made this change with the implementation of SAP talk. What we want is to foster a culture of continuous dialogue, focused on employee development. We ran a pilot SAP Talk with 10% of our global workforce, and it became clear that the elimination of ratings and more frequent conversations increased employee engagement and contributed to a culture of feedback and collaboration, ultimately leading to better alignment, transparency, and increased individual and corporate performance. We are now equipped to focus on employee growth and development rather than ratings and appraisal, on forward-looking continuous dialogue rather than backward-looking annual events and on being agile and simple rather than rigid and complex.
What does is required to succeed in such changes?
What is at stake is not the change in processes, or the tool updates. It is an in-depth cultural shift, required from both people leaders and employees.
As leaders, we need to keep in mind that employee engagement is a factor of retention and performance. It is therefore crucial for us to develop our coaching skills and our capability to give honest and continuous feedback. We also need to be genuinely willing to support our employees’ development and career evolution. We must have in mind that the corporate world has become collaborative, and after years of hierarchical leadership, leadership by influence is now predominant.
Last but not least, agility is key to adapt to the many changes we are facing when leading teams: adaptation of priorities to adjust to business stakes, skill sets of our teams, project-based roles, and expectations of a more diverse workforce.
As employees, we need to develop agility, because our careers will no longer be linear, and our initial career goals or aspirations may become obsolete over time since we will need to learn new skills and adapt to our rapidly changing business environment.
We also need to become more transparent with our leaders and develop our capability to give feedback, as making a relationship work better is a shared responsibility.
We need to start sitting in the driver’s seat and take responsibility for our own development and careers. Stop believing that managers will tell us what to do; our leaders should support and enable, but we own our own path.
Changing a culture is not easy, and does not happen overnight.
First, it is crucial to define the new culture by explaining to all stakeholders what is expected and the desired behaviors in this new culture.
Different modes of communication are also required for a smooth transition. Various formats are required to be sure to touch everyone, including large settings, small groups, and one-on-one. One should not hesitate to repeat the message to make sure it is heard and understood.
It is also important to communicate on the follow-up and share the progress towards that new culture, giving real-life examples from leaders and employees that embody the new culture, or from other companies that have implemented the change.
Finally, never miss the opportunity to involve individuals. Involving employees and leaders, encouraging them to share feedback and ideas and putting some into practice will help throughout the transition. Their involvement will give them a stake in realizing the cultural change. Ken Blanchard says it well: People often resent change when they have no involvement in how it should be implemented!
For more on this topic, see The Pros And Cons Of 360-Degree Feedback.