As companies constantly evolve to fit the needs of our society’s demands, so do our ideas that shape the workforce to make it more productive, efficient, and sustaining to enhance the employee experience.

Many processes that seemed to work for us in past years eventually get replaced with innovative ideas based on what we discover works for us or not. In the case of performance management, we’re finding that being more people-focused is creating better results than process-focused managing.

Process-focused performance management tends to revolve around goal setting, assessing, and review, whereas people-focused practices place an emphasis on employee strengths, in-the-moment feedback, recognition, and rewards. And when a people-focused system of managing employees is more aligned with an organization’s culture, it greatly increases the success of its performance management program.

Research shows that companies with a coaching culture that incorporates such people-focused practices are more than twice as likely to have effective performance management than the average company, according to Brandon Hall Group research. In their survey, overall, 28% of respondents said their PM program was effective or very effective, but that number rises to 42% for organizations that say they have collaborative cultures and 61% for organizations that say they have coaching cultures.

“Curious that we spend more time congratulating people who have succeeded than encouraging people who have not.”
Neil deGrasse Tyson

We’re learning that more traditional methods have major drawbacks, such as an annual review that feels more like a disciplinary hearing and tends to be disconnected from business outcomes or overall organizational success. Companies that shifted away from traditional performance management practices to more people-oriented systems replaced annual discussions with informal, frequent feedback; eliminated the use of a forced ranking system; and replaced annual goal-setting with near-term goals.

The key to fixing performance management appears to be more emphasis on providing continual coaching and informal feedback rather than scrutinizing employees once a year with a formal record of point rankings and criticism. Look for programs that teach leaders and managers to get into the coaching mindset and introduce them to a toolkit of appropriate techniques for providing consistent feedback and direction for employees.