Moving on from traditional appraisals to a new objectives achievement system

Thu, 04/05/2017
In recent times, Gold Seal has seen a shift in how many Australian businesses view performance management. Many businesses and their employees perceived it as difficult to use, onerous for its managers, tough on employees and a negative influence on teamwork. At the very least it was unproductive. Australian businesses had been feeling this for some time, but had nothing to replace it with.

If you are regular users of either the Steadfast HR Resources or the Gold Seal HR Resources, you will know they contain a Performance Management system based on traditional procedures, e.g. it contains a rating system and a review of past performance as well as development for future performance. These are tools that have been around for a considerable amount of time.

Internally at Gold Seal, the team also felt that the system was tired and needed a shift - but to what, and for what purpose? 
So we put our heads together, had a look at the trends and asked ourselves, if we were to devise something new, what would the wish list look like? What parts of the old system were really irritating to use and which did we want to keep?
We had some “must haves” and some “must get rid ofs” of course. Key amongst these were:
  • We didn’t want too many forms
  • We wanted something that would align our people with what we wanted to achieve as a business
  • We wanted to get rid of what was perceived as the awful bits - like the ratings system, which HR practitioners have believed for a very long time was deeply flawed
  • We wanted a great deal more positivity in the process
  • It must keep us compliant with workplace relations legislation
  • If we were going to offer it to our clients, it needed to keep them compliant with Chapter 7 of the Corporations Act as well, specifically RG 104 and 105

So we nutted it out. We call it the “Objectives Review” process and its key features are:

  • It accompanies , reflects and implements the Business Plan
  • It has no ratings
  • There is no past performance assessment
  • There’s a lot of talk of the future and planning workforce and individual skills for what the future holds
  • The language is positive
  • It introduces a switch to more regular “coaching” type sessions rather than formal reviews
We adopted this system for our own team at Gold Seal 12 months ago and have found that it provides greater job clarity, makes prioritisation of tasks easier for team members and facilitates the implementation of the Business Plan.
So, if some of your key strategic questions have been:
  • How do I implement the business plan?
  • How can I find a performance management system that doesn’t affect morale like appraisals do?
  • How do I get my team aligned with my business objectives?
…we think we may have some solutions for you.
So… is it perfect? Well we’d like your feedback on that. Most systems can use improvement, but we think it’s better than what we’ve used in the past, and your feedback will help us to refine it.
Will it fix your business frustrations in one go? With a bit of work on your part, it will go a long way.
Will it work for everyone? Every organisation is different of course but we can’t see a reason it won’t work, provided the managers are prepared to stick to the program as well as the team. Like any change, the impact needs to be very carefully managed and unless you have buy-in from all parties, problems may arise. So don’t make changes on your own – confer with your team and invite ownership.
Importantly, introducing a new system with a fanfare and then postponing sessions because a client wants to see you or you’re otherwise too busy is arguably the fastest way to disengage your employees.
The 9 step program
Before you start, make or revise your position descriptions
1.      For the system to work, you will need complete, accurate and current position descriptions complete with behaviours. Seek feedback that they are accurate and clear to those using them.
Prepare your business plan
2.      Prepare your business plan and as part of that, quantify the areas of business performance you want to improve. Set company-wide Goals and Objectives. Don’t forget to put measures in place so that you know success looks like. Don’t forget the S-M-A-R-T principle – make goals and objectives:
Specific – target a specific area for improvement or achievement
Measurable – quantify or at least suggest an indicator of progress
Assignable – specify who will do it
Realistic – state what results can realistically be achieved, given available resources
Time-related – specify when the result(s) can be achieved
3.      Chunk the tasks and action plan into groups and/or teams
Allocate objectives
4.      Have your first Objectives Review meeting with your team members (or give this task to your line managers)
5.      Allocate the tasks to individuals and/or groups, including measures. Ensure at this stage you have their buy-in. If they don’t think they can achieve what you want them to do, figure it out between you and agree what is achievable
Conduct coaching sessions
6.      Set dates for your first “coaching” session. We suggest you or your line managers conduct these quarterly but it’s up to you. Some companies do them monthly – they are much shorter than typical performance appraisals and we’ve found they only take 20 minutes or so – but you may find that monthly is too onerous for you
7.      When you conduct your session (we call them Objective Discussions) see how your employees are tracking with the objectives that have been set with them. Make it a targeted discussion about objectives rather than a random chat about how they’re feeling
8.      If they’re having trouble reaching their objectives, find out what they need, e.g. more training? Change of procedures? One of your jobs in this process is to identify and remove obstructions to employee achievement.
9.      Set the date for the next discussion
Repeat until it’s time to programme your next major Objectives Review after your next business planning day. Your next business planning session should include a review of what has been achieved and what is still outstanding. Still outstanding items go back into the objectives.
Your employees will have a system of review that will make it impossible to ignore gaps in performance. Underperformance against objectives will be revealed in a kinder fashion than previously; where employees may have seen performance reviews as something that was “done to them”, it is shown to be an interactive process where agreement is reached on goals and objectives and progress is discussed regularly. There will be no surprises.
Timely addressing of issues that impede performance will minimise people feeling “hopeless” when reaching for their objectives. The attention of management is drawn regularly to factors outside of the team’s control, and can lessen their impact, making success more likely.
On the other hand, success is a journey, not a destination - a truism for sure but this process will allow success to be acknowledged on a regular and ongoing basis. Whether a person receives performance based bonuses or just likes the satisfaction of achievement, the outcome will no longer be a surprise – they will either be systematically headed toward their objectives or understand all along the likelihood of falling short.
What’s excluded?
1.      This system purposely does not address performance counselling. If you need to address poor performance or behavioural issues, do not wait for the objective review discussions. Conduct them separately and (we can’t stress this enough) promptly. It’s outside of this system of objectives reviews.
2.      It also doesn’t address those meetings that may be required from time to time, when you do a bit of a health check with your people; find out what makes them tick, what’s making them happy or unhappy, what drives them, what their hopes dreams and aspirations are. Having those discussions are also necessary, whether you like them or not as managers. If you want to you can include them in your objectives review sessions or coaching sessions, or you may prefer them to be separate. Over to you.
To conclude
It’s difficult to convey a system and its benefits in a paper like this. So, in late May, we will conduct a webinar, free of charge, where we invite you to express your interest. This is both so we can tell you what we’re thinking and get some feedback from you and interested parties.
In the meantime, we would love to hear your thoughts on this new approach. 


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