Suzanne Elshult, http://hrnow.net Executive Yak, sponsors live round tables for senior marketing and human resources executives in the Seattle area and offers executive / professional coaching and virtual learning opportunities for leaders, business owners, consultants and coaches committed to growth and high performance.

In my years as an HR executive (before I started my own practice in the mid-90s) it seemed to me that performance management trends tended to swing back and forth on a pendulum – coupling and de-coupling pay with performance, focus on results and goals vs focus on behaviors and competencies, purely developmental models and so forth. Last week I met with a group of about twenty HR executives in my HR Executive Forum group to discuss what the changing landscape looks like right now. The themes I heard in our discussion were not necessarily what I expected. While competency based performance management was all the rage in the 90’s, it appears companies are all over the map right now. Some are coupling pay with performance, some are de-coupling and taking a pure developmental approach. Some are focused on only goals and results, others on competencies. Yet others are multi-dimensional. For those coupling performance with pay, the emphasis is more on the bonus element of compensation and less on base pay and merit pay. The ONE THEME I came away with is that companies are increasingly customizing how performance management is integrated (perhaps facilitated by the emergence of newer and better online tools). The type of industry, the type of culture, linkage to key market drivers, demographics of work force (for example Gen Y vs baby-boomers) are more importantly shaping what type of approach a company is taking.

Perhaps the advent of books such as Samuel Culbert’s “Get Rid of Performance Review!” has resulted in a more critical analysis of how well performance management systems work and forcing questions such as: Are we doing performance management just because that is what we have always done (institutionalization)? The executives in this meeting generally agreed that performance management in the past has often not worked well, but we continue to need some way of documenting personnel decisions. We all agreed that the focus should be on performanace management as an ongoing process, with continuous feedback, but in reality this objective is not met as we typically do a poor job of holding managers who are ill prepared to give feedback accountable. And, attempts to go to the “blank page” approach have backfired, with recent examples of employees becoming more dissatisfied with that approach than when they were actually receiving annual reviews – “a sense of having no idea of where they are at.”

Interesting ideas were floated. What if we only do performance reviews with managers and focus on holding them accountable for providing continuous feedback as a key accountability criteria. This would require that we also make the investment in providing necessary resources for success –training, coaching and more? Another idea which resonated strongly had to do with making the whole process owned jointly by employees and managers – with several companies having successfully shifted in this direction.

In the end, the group agreed that the success of a performance management system goes back to being very clear about what you are trying to accomplish with it during the design. Companies need to ask critical questions and continue to customize and break out of the institutional box they have lived in for so long. We need to become more creative! One HR executive gave a thought-provoking example of how they are using their performance management system to reinforce her organization’s express goal of having the process be about transparency and creating employee involvement/engagement. A critical element of their model (in addition to both goal and competency based dimensions) is the idea of “differentiators,” what sets an employee apart from others, what is his/her “personal brand.”

I’d be interested in hearing from other HR executives if some of the thinking we had in our roundtable session resonates? Are we becoming more customized in our approach? Do you see any other clear trends?