The nature of work is constantly changing. Due in large part by advances in technology, the speed of market and organizational change is moving at a much more rapid pace than it used to. This prompts a need to understand how to create HCM solutions that enable companies to not only keep up but to thrive in such an environment. This is exactly what a recent study conducted by the SAP SuccessFactors User Experience research team sought to do in the area of Performance Management and Goal Management (PMGM).
The User Experience (or UX) research team at SAP SuccessFactors consists of behavioral scientists tasked with identifying ways to enhance the functionality of our products. We do this through a variety of methods including usability tests, on-site ethnographic studies, and user interviews. Much of our work focuses on studying end users of our solutions. But we also look at larger trends affecting specific areas of HCM. This article describes the result of one of these broader studies. In September 2017, a series of phone interviews were conducted with nine academic and industry experts to identify key trends in PMGM. These interviews included four North American university experts, two PMGM consultants, our own SVP of Human Capital Management Research, and representatives from two of SuccessFactors largest European customers. Below is a summary of the key takeaways from this study.
Ongoing, continuous feedback is a hot topic in the world of PMGM according to the experts interviewed. They said the increasing speed of change and the need to preemptively “course correct” employee performance justifies more weekly manager 1:1s along with formal check-ins which should occur at least twice a year if not more often. Personal development was also mentioned as an important feature to be built into an innovative PMGM process. PMGM was coined a “primary tool for driving development” and was said to be best implemented through project-based “tours of duty” or use-specific learning. Flexibility of when goals should be met was also mentioned as important due to the varied nature of work and the changing pace of project demands.
In a study conducted by two USC experts1, crowdsourced feedback (requesting feedback from peers and managers) and ratingless feedback (qualitative feedback which only uses free-form text) were identified as key components of a “cutting-edge” PMGM process. Their survey of 236 managerial/HR respondents found that crowdsourced and ratingless feedback had been adopted by a large percentage of companies considered to be on the “cutting edge” of talent management (28% for crowdsourced feedback and 52% for ratingless feedback). The respondents of this survey said, when combined with ongoing feedback, crowdsourced and ratingless feedback is effective at improving employees’ experience with PM (with an average survey score of 5.00 out of 7 for crowdsourced feedback and 5.08 of 7 for ratingless) and providing useful feedback to employees (5.31 out of 7 for crowdsourced; 5.40 of 7 for ratingless).
Several experts said transparency of company goals is critical so employees can see how their goals contribute to the overall strategy. One expert stressed the importance of transparency in another way by saying that Glassdoor “is like checking your [company’s] credit score” and that providing a way for employees to comment on working conditions is important. As it relates to goal distribution, several experts said top-down company goals are important to ensure teams are aligned with the overall strategy, but that teams might also have goals that are specific to their own department. Defining goals through team “milestones” (or things which signify progress) was also mentioned as important to make goals actionable.
When creating goals, one expert provided research which shows that collaborative-goal setting (creating goals with one’s manager as opposed to having them assigned) leads to better goals and positive feelings between managers and individual contributors2. Finally, in terms of employee interactions, several experts said the ability of leadership to monitor the occurrence of 1:1 interactions, the frequency of feedback, and the type of feedback given is growing in importance. This is due to a need to align employee behavior with company practices and ensure more “accountability.” One expert shared research on ways to reduce negative results of monitoring employee performance such as stress, anxiety, and resentment. These included only monitoring a subset of employee interactions, not using employee interaction data to create competition, and not allowing interaction data to be seen by those other than leadership.
This study suggested several things a company can do to improve the value of PMGM. First, encourage more ongoing feedback including weekly or bi-weekly 1:1s and “lightweight” reviews which occur at least two times a year. Use these meetings to course correct employee performance and prevent them from going down the wrong path for long stretches at a time. Second, make personal development goals more integrated into the PMGM process. Encourage employees and managers to set goals in a way that encourages and enables employees to acquire new skills as they complete job objectives. Third, provide an easy way for employees to see all company goals so they know how what they do contributes to the overall mission and can align accordingly. Fourth, consider implementing crowdsourced and ratingless feedback as ways to improve employees’ experience with PM and to provide feedback which is meaningful and constructive. Finally, create milestones for team goals and define them in a way that you can see actionable and measurable results.
1Ledford, G. E., Benson, G. S., & Lawler, E. E. (2016). A study of cutting-edge performance management practices: Ongoing feedback, ratingless reviews and crowdsourced feedback. World at Work Journal, 8-24.
2Scully, J. A., Kirkpatrick, S. A., & Locke, E. A. (1995). Locus of knowledge as a determinant of the effects of participation on performance, affect, and perceptions. Organizational Behavior and Human Decision Processes, 276-288.