Aligning development plans with targeted business goals can change the nature of performance management and improve the employee experience.
At Hitachi Consulting Corporation (HCC), performance management is an old concept with a new mission: performance enhancement.
With the company already engaged in a significant business transformation, leaders felt the time was right to re-examine the intent of its performance management program and align it with the direction of the organizational and cultural change already underway. Greater simplicity, transparency and a positive employee experience were key objectives.
A New Mission
A variety of company feedback mechanisms had captured what people did not want in their performance management program. Gaining consensus on what they did want to target in the future required the performance management team to engage in open dialogue with leaders, managers and employees across the global organization, and to consider trends in the marketplace. Led by a human resources leader and performance management leader, information gathering activities were conducted over a 12-month period as an iterative process of listening, designing, presenting proposals and adjusting based on feedback.
As plans developed, a focus on employee development became a predominant theme. With that in mind, all components of performance management were considered in scope for revisions, and all design changes were done with an eye toward this cultural shift.
It All Begins with Goals
Hitachi Consulting historically defined goals for what the employee was tasked to deliver (goals and key performance indicators) and how they went about conducting their work and interactions with others (company values and success factors). Learning and skill development goals were documented in a learning management system.
When writing an annual review, managers focused on the what goals: the concrete deliverables that support the company and clients. Company values and success factors, more difficult to observe and measure, were often considered secondary, and focused on only when a serious problem or breach occurred. Skill development activities were discussed separately, somewhat disconnected from performance management.
Implementing the Vision of Performance Enhancement
To realize the vision of a development-focused performance management program, the organization agreed upon several changes. This included ensuring ongoing feedback through the addition of quarterly progress checkpoint meetings, and improved peer feedback through the simplification of an existing peer feedback tool.
Another significant change was to align company values, success factors and skill development to the what goals. By doing so, the inherent business value of those factors would become more evident.
To bring this alignment to life, the goal-setting process at the beginning of the year asks employees and managers to consider which company values, success factors and skills align directly with each annual goal. This requires the staff to think about company values, success factors and skills in the context of delivering business results.
- Goal: What am I tasked with achieving?
- Target/Success Measures: What target/measure do I need to attain to meet the goal?
- Action Steps: What steps will I take to get the job done?
- Company Values and Success Factors I Need to Use: What company values and success factors will I need to use to accomplish this?
- Top Skills and Competencies I Need to Use: What are the top skills and competencies I will need to use to successfully achieve this goal?
With this done, when the time comes to write the annual review, it is easier to show how the skillful use of these “soft” measures contributed to the success of the business goals, or how the lack of those capabilities affected the result.
Each goal is described in a traditional SMART goal format. This defines the goal, success measures and the actions to be taken to meet that goal. Before submitting the goal, the employee and manager also agree on two to three of the most critical company values, success factors and skills needed to meet that goal.
With identification of the most critical company values, success factors and skills complete, the manager and employee can collaboratively reflect on the skill level required and assess the employee’s current proficiency level. If proficiency gaps exist, urgent development needs become apparent.
These development needs are documented in a third type of goal – development goals. Essentially seen as an individual development plan, this section documents the intended skill development goals for the coming year. Employees and managers can also identify activities to support long-term career development goals that reflect the employee’s career trajectory and aspirations.
Self-development and skill growth are considered an important expectation of employees at HCC. As such, progress and achievements toward meeting the stated development goals are factored into the performance appraisal at the end of the year. Doing so makes the annual review a more holistic assessment of the employee’s performance and contributions and recognizes the business value of investing in the development of skills and competencies.
Making It Happen
To gain commitment for this change, workshops were delivered in stages, beginning with the most senior level staff and moving throughout the organization. Branded as “What You Need To Know About…,” the series focused on each change as that change was implemented and available in the performance management system. While this spread the change management program out over time, it delivered only what was needed, just in time, easing the assimilation of new information.
A goal-setting workshop for an intact team of managers was designed to provide a guided walk-through of the performance management system, with step-by-step demonstration and stop points to allow individuals to work on their own goals in the system, with live, real-time help available. This investment empowered leaders to take the next steps with their staff.
As with any transformation, some employees quickly recognize the benefit of the change and adopt immediately. Others will embrace the change after they have an opportunity to intellectually observe and explore the process. Over time, as HCC’s employees engage in a performance management program focused on their own individual growth and development, the company anticipates increased trust in the process, better performance and an improved employee experience.