Building engagement and collaboration through the performance process

Defining, measuring and rewarding success is a powerful lever to accelerate the achievement of business strategy.  Yet often the performance process is seen as a distraction – a task to get out of the way so that attention can return to running the business.  Recently, People Solutions Group partnered with two clients to design new performance management frameworks.  We were reminded of two powerful, yet often overlooked benefits that a well-constructed performance framework can deliver – strengthened employee engagement and effective collaboration.

Ultimately, the goal of performance management is to accelerate the achievement of business strategy.  Best practice points to results being achieved in a way that is consistent with the company’s culture and values, whilst inspiring a continuous improvement mindset.  This all sounds pretty straight forward.  Yet performance management can be complex, daunting and seen as yet another distracting process if not positioned well.  This may be due to a lack of leadership readiness or commitment, overlap of roles/accountabilities, a company’s reduced capacity to reward performance, or employee mistrust of the process itself.

Recently we worked with two clients from vastly different sectors to design custom performance management frameworks.  Despite the differences in their culture, operating environment and strategy there were striking commonalities in the rationale for change.

In the past these businesses relied on the classic business improvement levers such as cost cutting and aggressive sales targets to drive growth.  To remain competitive in the current economy both businesses realised they needed a new approach.  A radical step change in workforce productivity and bundled product offerings was seen as critical to achieving growth organically.  This in turn meant rethinking their approach to performance management to bring about the desired results.

For both clients, the introduction of a strategic performance management framework was a big shift in custom and practice.  We kept a very simple principle front of mind throughout our design phase – getting the basics right and ensuring strong alignment to company strategy and culture.  Our design focused on using performance conversations to build mutual trust, performance improvement and stronger employee engagement through more frequent honest, two-way dialogue.

Our design linked individual goals to company goals using a top-down cascade of balanced scorecards.  Whilst this is not a new concept, research shows that many companies still fail to make the link between performance management and company strategy.

Our clients were also grappling with the need to drive greater collaboration across traditional functional units – such as sales, product development, service and distribution – to deliver more bundled product offerings to clients and achieve a more seamless end to end customer experience.

Our strategic performance management design therefore needed to accommodate our client’s matrix reporting lines by ensuring horizontal alignment of goals across teams and functions where collaboration was critical to success.  Our design also needed to clearly define the role of the primary leader in goal setting and performance feedback.  Cross functional leader moderation to set and agree shared goals – and review performance in the later stages of the cycle – needed to be hard-wired into the performance process.

These client engagements reminded us of the power of performance management when done well.  Our clients reported positive results post the implementation of their new performance framework.  The often overlooked benefits of employee engagement and improved collaboration were reported as the most significant improvements by the CEOs of these businesses.

We believe there is significant scope for businesses to truly harness the full benefits of a strategic approach to performance management, particularly in the current economy when new approaches are needed to realise challenging growth targets and performance expectations.