Performance management has been one of the key priorities for organizations striving to unlock unprecedented growth. If you look closely, performance management focuses on measuring and improving employee performance to facilitate organizational success.
However, as organizations are moving towards becoming people-centric, focusing on the growth and wellbeing of their employees, the understanding of performance management is expanding. The focus is now on a more holistic and comprehensive idea of employee development. Performance management is being increasingly viewed with a more end-to-end vision and a continuous process, highlighting the need to foster a culture of development opportunities for employees.
The move to expand the meaning and scope of performance management towards employee development is critical for fast growing organizations as employees are the greatest asset which they can nurture, develop and ultimately who will contribute to success.
Through the course of this blog we will explore 5 major steps that can enable organizations to go from performance management to employee development. We will also highlight some of the best practices and essential guidance for fast growing organizations that will help them in early years of their growth journey.
1. Focus on the big picture
Often, when it comes to performance management, organizational leaders and managers focus on the immediate and short-term goals to gauge if things are working out or not. However, to adopt the broader framework of employee development, it is important to expand the scope and focus on the big picture.
Performance and development of the employee needs to be gauged in relation with the long-term goals and vision, while the short-term goals should be used as milestones in the longer journey. The focus should be on how the employee can develop and grow in the entire journey towards the goal, rather than how well he/she has been able to perform so far.
To expand performance management to employee development, organizations need to adopt a futuristic lens and gauge what can be rather than simply measuring what is.
The idea is to broaden the perspective and focus on areas that take into account the employee lens, rather than simply highlighting the impact of the performance on the organizational bottom line.
2. Align employee and organizational goals
It is a fact that performance management in its conventional sense revolves around organizational goals. However, most fast growing companies believe in expanding this myopic focus. That’s how they move from performance management to employee development.
Here, it is important to create an alignment between employee and organizational goals. In the absence of such an alignment, employee development will not take place, irrespective of any number of efforts towards achieving organizational goals.
To put it simply, when employee and organizational goals align, there are streamlined and strategic efforts that go towards their achievement. Since the end goal is the same, every effort and improvement towards organizational goals directly leads to employee development as it takes employees one step closer to their career goals. Also, 58% of employees (62% of Millennials and GenX) say that having professional development opportunities increases their job satisfaction and is a major driver of long term retention.
Therefore, organizations must focus on communicating organizational goals to their team members and also help them in charting out what they seek to achieve in the longer run. Based on the two mind maps, leaders and managers can help identify areas of convergence and transform performance management for organizational goals into employee development for career progression.
3. Promote collective brainstorming
While alignment of employee and organizational goals is important, it is equally important to facilitate collective brainstorming to identify the path to those goals.
When the focus is solely on performance management, the leadership generally creates the goals along with roadmaps towards achieving the set goals. Since the focus is on organizational success, it is considered that the leadership knows best. However, to expand performance management to employee development, it is important to have the employee voice too.
This brings the notion of collective brainstorming to the forefront. The process asks employees to be active participants in the setting goals, and creating plans to monitor and improve their performance with incorporation of indicators that align with their priorities too.
4. Reinvent the feedback cycle
Generally, in performance management, feedback is limited to an annual or biannual event. However, to reinvent the idea and expand the scope, employee development must focus on continuous feedback. There are multiple facets to the idea of continuous and holistic feedback.
First, feedback should be a regular affair. It should take place at least once every month to identify and address challenges in the beginning itself. To continuously understand the employee pulse and overall organizational sentiment, you must develop a daily feedback culture.
Second, for employee development, feedback should come in from different sources. Since employee development is about more factors than just how productive the employee has been, the feedback should reflect the same with self reflection, feedback from managers and peer feedback, to start with.
Third, the feedback cycle should be transformed into a two way street. While the myopic vision of performance management may focus on a top-down approach for feedback, employee development requires feedback all across.
This suggests that employees must be given the opportunity and space to share what they feel has been the progress like from an organizational and individual standpoint and how the same can be improved. Employee development requires facilitating employee participation in gauging and identifying what is going well and what requires work, on a regular basis.
5. Create new metrics for evaluation
There are some standard metrics for performance management, based on specific roles, including the number of deals closed, productivity, etc. Often, these metrics focus on organizational goals and hence, do not seek to gauge the progress made on the professional level for employees.
To transition to employee development, organizations need to widen the scope and create and implement new metrics which have a more expansive focus.
From an employee development lens, metric should focus on the learning and development curve for employees. Additionally, attention should be given to transforming the standard metrics to make them more meaningful to gauge how they ultimately contribute to employee development.
The bottom line here is that the standard metrics for performance management should not be discarded. Rather, new ones should be added that focus entirely on employee development and the existing ones can be delved into deeper to make a case for employee development.
Employee development for fast growing companies
What we discussed so far is a comprehensive approach for fast growing startups to move from performance management to continuous employee development.
In addition, based on our work with many fast growing organizations, we have created a list of a few best practices to facilitate employee development that supports overall growth:
- Invest in the team:
Since the team is one of the biggest assets for fast growing companies, investing in learning and training sessions for them is extremely important. Customized learning modules based on the future trends and industry requirements can help hypergrowth organizations expand performance management to facilitate employee development. Here a learning-first work culture makes a lot of sense.
- Create a culture of coaching and mentoring:
Most professionals who join fast growing companies come with a growth mindset and are willing to take risks to make an impact and leave behind a legacy. Therefore, providing coaching and mentorship support can truly add value for employee development.
- Expand the scope of work:
Fast growing companies have a benefit over established organizations in terms of flexibility of roles and tasks. They can encourage team members to explore and experiment with different kinds of roles and tasks, to achieve a steep learning curve, which is integral to employee development.
- Help create a career path
For many employees, working in fast growing organizations is the first step towards crafting and fast tracking their career. Here, such organizations can encourage their leadership team to help employees create their career plans and a roadmap to achieve the same. Employee development can thus lead to better career outcomes for the employees. It also helps with increasing talent retention rate — as 87% millennial employees prioritize professional and career development opportunities over other benefits.
- Facilitate collaboration
Growth and development occurs at an unprecedented rate when professionals work together and learn from each other. Fast growing companies have the opportunity to enable their team members to collaborate with each other, with fluid boundaries of business verticals. Collective work and diverse ideas can lead to employee development and go a step beyond performance management.
Whether you are a start-up or a scale-up or the industry leader, there’s no substitute for having a highly engaged, skilled workforce. There’s no substitute for investing in knowing and developing your employees. When you focus on mentoring, coaching, and developing your employees, they return the favor by going the extra mile in their respective roles.
As you grow as an organization, make sure to develop a culture that doesn’t stop at simple managing and improving immediate performance, but rather leads to continuous growth. Make sure to learn about the needs and pain-points of your employees through continuous feedback, let them know they are valued through 1:1 personalized coaching sessions, and set goals for them that help them grow too.