Continuous Performance Management (CPM) is widely replacing annual appraisals as the most effective way to improve staff performance. Implementing a goal setting methodology such as Objectives and Key Results (OKR) provides a natural platform to support CPM.
What is Continuous Performance Management and why is it in vogue?
Many companies are turning away from annual appraisals towards continuous performance management.
The appraisal is the well intentioned but dreaded meeting, once or twice a year, where appraiser and appraisee sit down nervously and discuss a multi page form provided by HR. Both appraiser and appraisee will generally have agonised over what to write in the form for weeks. Usually about 80% of the entries in this form are useless or repetitious, and the few gems of genuinely useful feedback are are jaded by elapsed time, over thinking, and the need to write them down beforehand.
If one views the manager as a coach, then the absurdity of this process quickly becomes clear. What soccer coach would go through an entire season without saying anything, and then write down all the feedback he has in a form and deliver it in a single meeting!
As Sir Alex Ferguson, the legendary Manchester United coach, said about giving feedback to his players, when interviewed by Harvard Business School professor Anita Elberse.
“I would do it right after the game. I wouldn’t wait until Monday. I’d do it, and it was finished. I was on to the next match.”
But equally, he said “Few people get better with criticism; most respond to encouragement instead. So I tried to give encouragement when I could. For a player — for any human being — there is nothing better than hearing ‘Well done.’ Those are the two best words ever invented. You don’t need to use superlatives.”
Continuous Performance Management borrows from this idea of the manager being a coach.
OKR can assist with continuous performance management
Given the difficulty many companies have in getting even one performance conversation per year completed and recorded, its easy to see why there can be scepticism about the possibility of having many such conversations. But this fear is to misunderstand the nature of continuous performance management. In a sports coaching relationship, the coached will look forward to feedback, and be happy to discuss all aspects of that feedback in search of genuine improvement. The coach and coached will together set frequent, achievable, roadmap goals, and return to them often to assess progress. In business we can apply many of the same ideas. OKR can provide many of the conditions necessary to enable a genuine coaching relationship to flourish.
1. There needs to be something highly topical to coach about, and a fairly responsive measure of performance
When you are coaching a soccer team, you always have the next game to observe and review. This review provides the perfect opportunity to give both praise and constructive criticism. In business, it tends to be a continium and there is great temptation to put off the difficult feedback conversation to “later”. OKR gives both manager and managed the “game” to discuss, at minimum once per quarter, but also throughout the quarter as each progress check in is made.
2. Coaching should become a normal part of regular meetings between colleagues.
OKR relies on regular check ins to work effectively. These check ins are mainly to do with the progress against the objectives, but its a fairly natural extension, especially where the check in is a 1-1 conversation, to make a habit of asking in the meeting, “so how could you have done that differently, or how could we have avoided that roadblock”.
3. There needs to be opportunity to give recognition and praise, both in the meeting and publicly.
It’s even easier to remember to dole out praise where its due in these check in meetings. And if your OKR system supports it, this praise can be widely disseminated, giving the employee a huge boost in confidence and motivation.
4. Feedback needs to be timely, and with examples to back it up.
With timely and topical feedback, the discussion is more natural, and quickly moves onto ways the issue could have been dealt with differently. This enables the coach to bringing out improvement points in a stronger and more meaningful way.
The regular and frequent nature of the OKR check ins means that feedback is almost always in context. It will usually revolve around one or two coaching points. This mirrors the best sports coaching approach, and makes coaching much more effective.
5. There needs to be a minimum of administrative burden
The administration overhead of appraisals is one of the key drags on getting them done.
A good OKR system will already have captured the details around the objective and its progress. A minimum of administration will be required around the performance management side of it. For example, it could be a short private note: “Andrew and I discussed how he could have planned the work better and agreed for him to take a course on how to use Microsoft Project”. The next time there is a check in, its a 20 second task to check whether this coaching is being followed up.
6. Coaching should be free from other fears
Annual appraisals often suffer from the fear that the “scoring” of the appraisal will affect remuneration. Therefore the appraisee enters the conversation with the objective of “proving” that they did a great job, and should receive the highest marks.
Since OKR’s encourage risk taking and are not linked to remuneration, the coaching can be conducted in an “improvement” mindset rather than a “defensive” mindset.
OKR and CPM fit hand in glove because OKR provides the context for CPM to flourish.