There has been much talk lately about the problems with “traditional” approaches to performance management. By this, I mean the “old school” approach to yearly ratings, pointing out employees weaknesses and attempting to fix them.

I have written a few articles on this subject recently. But here, I want to focus on how to improve team performance. And in particular – how to enable the innovation that we want from diverse teams.

How performance appraisals can restrict innovation

When considering that people from different backgrounds and experiences, some of the problems with traditional approaches include:

  • Potential for unconscious bias (both real and perceived)
  • Lack of sensitivity towards cultural values
  • Unrealistic expectations that people should just “know how things are done here”
  • Focusing on a very narrow view of performance (we have always done it this way)
  • Priority on individual performance is counter-productive to team building

While these are all important to consider, I want to focus on limitations and barriers to innovation, and how organizations are missing out on that which could improve team performance.

Barriers to innovation

Again, there is much talk about how you need diverse perspectives for creativity and innovation. Diverse perspectives can get us out of the box and open up new opportunities. So it seems there is value in hiring people of diverse backgrounds. But what happens after we hire them?

While intentions may be good, we may unknowingly be trying to force diversity back into our old box. We bring in people that have different (perhaps better!) ways of doing things but are unable to leverage those capabilities because our business processes are still hard-wired to old ways.

Consider how the traditional approach to performance management is very prescriptive. That is – we tell employees they need to do these things in a particular way (generally, the way we have always done things). We may see their different approaches as weaknesses that need to be “fixed”.

Moving away from old school approaches

Many organizations are moving away from these unproductive approaches, which makes sense. But the question remains- what do you move to?

In their article The Performance Management Revolution, Peter Cappelli and Anna Tavis introduce trends that many large organizations are taking towards a more informal, continuous improvement type of model. However, they also recognize that some types of industries still require accountability and financial rewards, and perhaps the need for a middle ground.

(source https://hbr.org/2016/10/the-performance-management-revolution_

Marcus Buckingham and Ashley Goodall, in their article The Feedback Fallacy, point out evidence that receiving feedback on our performance is not only uncomfortable, but it can be wrong. That is – humans are not good at evaluating another persons’ performance. However, we can help employees giving specific feedback in the moment. (source https://hbr.org/2019/03/the-feedback-fallacy)

Move Towards a Results-Based Approach

While some articles suggest a leader becomes more of a “cheer leader” and just lets employees figure things out, I do believe the middle ground is the right approach. For the most part, people need to know what is expected of them and the consequences (both good and bad). If we try to pretend it doesn’t exist, it will come up in other ways. For example, failing to deal with a poor performing employee is very demotivating to other employees.

A results-based approach provides a middle ground, as it sets the expectations on the outcomes. We then encourage employees to leverage their strengths, knowledge, connections, etc. to achieve those outcomes.

But how does your employee know if they are moving in the right direction to achieve those outcomes? That’s where we need some meaningful measurements to indicate progress. Objective measurements are the best to eliminate unconscious bias. And we need tools for both managers and employees to monitor progress and improve on a continual basis.

Outcomes, measures, monitoring = OMM

n example of the benefits to diversity and innovation

As I mentioned above, we give employees flexibility on HOW they achieve the results. This enables them to use their unique abilities without fear of “not fitting in”. It goes above and beyond to recognize the value of diverse talents and perspectives.

It can also promote more of a collaborative, team approach. For example – say that your business unit has been given the target of $250,000 in sales for the first quarter. Your “old school” approach might have been to break that number down and task each of your sales people with their own target (creating competition!). An innovative approach would see you having discussions with your team on how you can work together to achieve this goal.

For example – maybe some people are better at generating leads while others are better at closing deals or upselling to existing customers. Each employee can set their targets around how they can best contribute to the team generating that $250,000 target.

Where to start with a results-based approach to improve team performance?

While there are many performance management systems on the market, you can start getting great results with some simple processes and tools. Based on my experience and research, I have distilled a simple framework to get you started.

The OMM approach to performance improvement

This simple framework supports managers to work with their employees to set clear and meaningful expectations for performance, and the process for measuring and monitoring results. But it includes flexibility in HOW employees achieve results. It includes 3 essential components:

Outcomes: What results need to be achieved?

This is where managers need to clearly define the criteria of success:

  • What needs to be accomplished for your business unit? By when?
  • How will you communicate progress to senior executive and stakeholders?
  • How will each employee contribute to these outcomes?

Measures: How will we know our progress with outcomes?

  • Work with your employees, encourage their input on HOW to achieve outcomes
  • Break down broad goals into objectives, outcomes, outputs
  • Generating SMART goals (specific, measurable, achievable, relevant, time bounded)

Monitoring: results and reporting on performance

  • How will your employees keep you informed on progress? How often?
  • Identify tools for monitoring progress and catching performance problems early

Encourage input and new ideas

While this approach may be new to your workplace, it doesn’t need to be an onerous process. In fact, it may make things easier once you give your employees the responsibility to set and monitor their own progress. Make sure you encourage two-way conversation and dialogue to encourage innovative approaches from your employees.