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Talent Management Excellence Essentials January 2015

COVER ARTICLE Performance Management: Hopelessly Broken? How do you identify problems and fix it? By Tarik Taman Plenty of people seem to think so – Googling “performance manage-ment broken” returns over 50 million results. Since Elaine Pulakos and Ryan O’Leary coined the phrase in their 2011 paper Why is performance management broken?, it has become seemingly inescapable. Why is it so popular? Like every telling phrase it has currency because it seems to crystalize a common experience. Performance management in most organizations feels like a long process with results that do not match our level of effort. Linda Sharkey and Paul Eccher say as much in their excellent 2010 book Optimizing Talent. Of a range of talent management activities, they identify performance management as the one providing the least payback for the input it requires. So is it true? Is performance management broken? I truly don’t think so. It would be true to say that a certain type of performance management is no longer delivering – the performance management that has come to typify performance management as a whole. This performance management typically consists of line managers and employees in annual conversation about the employee’s abilities, their con-tribution and development plan, often against an ideal set of competencies for their position, and perhaps in conjunction with a set of cascaded-down objectives. It is usually a structured process that sits outside normal work and needs time dedicated to it. The originators of the phrase, Pulakos and O’Leary, describe the problem with this approach very clearly: “While the cumulative research and practice have yielded performance manage-ment methods, tools, and processes that should work well, operational implementa-tions have proven disappointing.” And they are clear about the reason, too: “…a significant part of the problem is that performance management has been reduced to prescribed steps within formal administrative systems that are discon-nected from the day-to-day activities that determine performance management effectiveness.” And there, in a nutshell, is the problem. There is nothing wrong with this type of performance management in theory. In some organizations it works very well in practice. In too many organizations, however, it hardly works at all, and for the reasons that Pulakos and O’Leary describe: The means of performance management, the process, has become an end in itself, leaving managers and employees wondering where the value is. The results is it quickly becomes a matter of lip service and HR in turn is left wondering what is wrong with the process and how it can be improved. This does not, however, mean that performance manage should be aban-doned. It would be folly to give up on the aims of performance management. After all, what is a manager’s job other than to ensure performance, and how can they possibly do it without managing? The problem is that performance management has become divorced from the managers, to become a process-driven  activity rather than a business-led one. It has been process-driven because in the past it was only possible to collect all the data needed by using an intricate, time-consuming process. It was so time-consuming that few managers or employees ever managed to do all that was required. Today, however, that data collection can be faster, and – crucially – far more useful than ever before. Smart companies begin by designing “Success Profiles” for roles, based on the key characteristics of top performers in those roles. These profiles are divided into four parts: 1. Skills 2. Knowledge 3. Credentials 4. Character traits Together these four parts of the Success Profile describe what good looks like. And – unlike the laborious world of traditional talent management – you don’t need to boil the ocean to define a Success Profile. For the character traits part, for example, an employee can take a one-time battery of questions to assess 39 key character traits when they join the company. Having that data to hand makes it possible to find which of those traits correlate with success in a particular role – attention to detail, perhaps, or persistence. That correlation can be undertaken by the HR team. Managers and employees are not taken off the job to fill out forms or undergo assessments. The results, though, are astounding, and turn the traditional work of performance management on its head. And when presented with them, believe me, manager and employee attitudes to performance management changes dramatically. They want to get involved. Why? Because it works. It produces results they can put to use. A large healthcare organization reduced nurse turnover by 47 percent using this approach (and with nurse replacement costs running into tens of thousands of dollars that represents significant savings). And when you have the right people in the right job, not only are they more likely to stay, they do their jobs better. In addition, a very popular nationwide retailer’s average sales-per-hour increased by 27 percent when they adopted this approach. Performance management used to be an art that took too long to master and brought insubstantial returns. It’s now a science. This new science is part of a new approach to people which I call Talent Optimization. Organizations adopting it are moving from a vague promise to clear benefits and quantifiable impact. The traditional approach to performance management perfectly mirrored the deficiencies of old school Talent Management: It took too long to collect a lot of data that provided little insight. Talent Optimization, in contrast, col-lects the right data fast and through it provides executable decision support. Performance management isn’t broken, not any more. It just needs to be done right. PM - ITM Tarik Taman is General Manager Human Capital Management & Cloud ERP Businesses at Infor. He has more than 15 years of experience in global technology leadership, having managed business operations across the world. Follow @TamanTarik Connect Tarik Taman 22 Submit your Articles Talent Management excellence essentials presented by HR.com | 01.2015


Talent Management Excellence Essentials January 2015
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