The ever-increasing reach of Digital technologies has the potential to totally revolutionise Performance Management (PM) within organizations.
From the evolution of real-time mobile platforms right the way to the cutting-edge cognitive technologies, digital advancements provide an exceptional backdrop for studying the PM ’revolution’. However, these technologies must be approached within a wider context of organizational change and cultural awareness.
We recently sat down with Alan Colquitt to discuss some of the critical background concepts required to truly transform PM – with or without the latest tech.
Alan’s analysis provides a succinct and thought-provoking exposition of the cultural, ideological and psychological basis of next-generation PM.
The HR Congress: In your opinion, what would be the three or four key ideas regarding transforming performance management? What are the myths surrounding this transformation you would flag if you were a consultant for an organization? What are the things that you would try and firefight before they become resistance?
Alan Colquitt: For me, there are probably three big ideas that reflect what we need to do going forward. In addition, okay, you’ve got to implement these three big ideas, but then you also have to stop all of the nonsense that we’ve done for the last 50 years.
So, the three big ideas for me are:
Goals; in a traditional performance management system, the goal-setting or objective-setting process is traditionally a secondary element to these systems. The primary element for most performance management systems is an evaluation process; it produces a number that drives all of the other decisions about you downstream – how much of a pay increase you get, how big of a bonus you get, whether you get a bonus or not, whether you get promoted or not, or whether you get access to special development opportunities. I would argue that the first big idea is that goals and objectives need to be at the center of this process. So, this process is really about motivating high performance by creating real meaning and purpose for people. It’s “what are we trying to achieve here?” I’m not talking about really transcendent purpose, like making the world better.I’m thinking everyday purpose, “We need to get this product out the door. If we’re going to serve our customers and meet their needs, we need to get this new product out the door. This is what we’re trying to achieve.” That’s a noble cause that everybody understands and values. All of the senior leaders in this company are saying “This is what we’re going to appreciate you, getting this thing out the door.” So, putting goals, purpose and objectives at the center of the design of these systems is essential.
The second big idea is really moving away from this concept of monitoring and surveillance throughout the year, to make sure that you’re actually delivering on this. Moving from this idea of feedback – and especially negative feedback – to an idea that’s more focused on progress. There’s a lot of good science on this that very few people are really looking at. So, instead of focusing on feedback and continuous feedback, I would focus on progress. The idea is that what we’re trying to achieve here is high performance, and getting these products out the door. People are motivated and engaged by day-to-day progress. The research on this is just fascinating. It’s all about progress and meaningful work.
The boss’s job isn’t to keep score day to day, week to week, month to month. It’s to make sure that my people are making progress against these goals. These are my goals, too. I’m a part of their team. So, it’s re-framing the whole idea of delivering feedback to people, most of which is “Hey, you’re off course.” It’s changing the frame to “How can I help you make progress? I can do that by giving you information about what I see is happening, but I can also do that by helping you remove blocks, and give you the information you need, and resources, and all of those all of those other things.”
The last one, which we’ve already mentioned, is this idea of moving away from individualism towards teams, teaming, cooperation and collaboration. Instead of the individual being the unit of analysis, which is fairly elitist and questionable since we really don’t care about all individuals, we only care about the top 10%. So, instead of this elitist individualistic kind of system, you’ve got more of an egalitarian team-based system, where we need everybody, and everybody’s ideas, in order to get this done. The more difficult and sophisticated technologies and systems become, and the more global and complex our organizations become, it becomes more obvious that 10% of the individuals can’t produce enough success for us. You just need everybody on the team. Not just the one or two that are high potentials, or high flyers.
So, the ideas of goals, progress, and teams, these are the key ones. Most of the myths around these are centred around how money motivates – classic economic thinking, that financial rewards motivate people, as well as competition through evaluations and ratings. I just read another piece on this today, the idea that people really want to be rated and ranked – which is classic tournament theory – that is how you motivate people. The research on this is fairly complicated, because when you ask people, “Do you want to be rated?” Generally, they’ll say “Yes,” because they’ve been rated their whole life. They’ve been graded in school, and everybody is rated all the time. But the reality is, when they say, “Sure. I don’t mind being rated or ranked,” it’s because they think they’re all above average.
This is a classic kind of illusory superiority bias. Individuals think they will come out ahead in an incentive system that’s based on ratings because they think they’ll get high ratings. But when they get into a system like that, they don’t think it’s fair, and people actually don’t want to be rated. When you ask them to vote with their feet, they tend to vote no. The assumption is that, when people hear that employees want to know where they stand, they assume that means they want to be rated, with a transparent rating system. But I don’t think that’s what employees are asking for. When they want to know where they stand, they want to know whether they’re making progress against their major career goals. I don’t think that means they want to be rated.
Alan L. Colquitt Ph.D., is a talent management, organizational change and human capital analytics expert. He has worked as an internal consultant in the pharmaceutical and consumer products industries, building organizational capability and advising executives, business leaders, and HR professionals. His thinking and research appears in many books, chapters, articles, blog posts, magazine articles, and white papers. His latest book: Next Generation Performance Management: The Triumph Of Science Over Myth And Superstition is a must-read for all interested in the critical evolution of Performance Management.
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