Life @ Schneider Blog

Managing Performance: Revolution or Evolution? – A Point of View

Creating an environment for High Performance is among the leading priorities of executives. In a business environment that is becoming more competitive every year, this is simply because ultimately only people and their performance can provide a competitive edge in the long-term. The question that remains is what can be done to constantly engage, motivate and challenge people to keep performing and innovating?

Increasing clarity

It is stating the obvious, but let us just say that managing performance during a constant ‘war for customer and talent’ is certainly not simple!

What is clear and not debatable any longer is the diminished utility of performance management processes that are activated once annually to ‘assess performance’, ‘set future goals’ and ‘reward or punish’.

So, it is no surprise that many organizations have found that their ‘current systems are flawed’ and that ‘managers and employees are not satisfied with how performance is managed’. This has led some to completely abandon their existing practices like annual performance reviews and replace them with various on-the-go feedback-giving processes. The long-term benefits of some of these changes are yet to be fully determined, but there is a certain unanimity in the objective – the need for a new strategy to manage talent and sustain high performance in a rapidly transforming world.

The alternative approach –  evolutionary yet high impact

Is there merit in considering an approach to managing performance that is evolutionary as opposed to revolutionary? At Schneider Electric, our idea is not to replace the existing systems, but to alter them with a view to boosting people engagement and overall business results through a ‘High Performance culture’ transformation consisting of several inter-connected components.

Following are the fundamental tenets of our philosophy:

1) Driving high performance and ambition

High performance is first and foremost about being ambitious for our customers and business. We do not engage in competition to reach the final, but to win it. This intent is embedded in the culture everywhere by picking ambition over targets and through our bid to do the ‘impossible’ to create the best innovation for customers.

The definition of performance (goals) must be ambitious, dynamic / transparent, and translated into the expected behaviours linked to the overall business values.

Owing to the consistent deployment and periodic reinforcement of our High Performance philosophy, 90% of our employees have a clear understanding of this transformation and  84% feel more equipped to focus on their priorities and achieve their goals.

2) Ongoing feedback, recognition and coaching

Managers must get back to the basics of management, which is to guide and coach teams to overcome difficulties, prioritize, simplify situations and find solutions.

Whatever the content, feedback is most effective when it’s real-time and fact based. Recognition of performance should also follow the rule of immediacy. While leaders and employees are no doubt very stretched, they would do very well to spend less time on email / internal meetings and more on meeting people and colleagues to appreciate their work and contribution.

Feedback is not only about ‘what’ is said, but also about ‘how’ it is said. Instead of being judgmental, feedback must be informed and descriptive.

This on-going feedback approach is complemented by a yearly performance conversation. We believe that taking the time once a year to take a step back and reflect on performance, behaviours and goals is essential for the development of our people. Today, 97% of them have a formal performance conversation with their managers. 87% acknowledge that feedback received from co-workers and the inclusion of behaviours (“the how”) in the process gives them a more comprehensive view of their contribution over the year.

3) Empowering managers

As companies grow and become bigger across geographies, we as global leaders have been tempted at some point to control more from the top and therefore micro-manage through Key Performance Indicators (KPIs). However, KPIs become irrelevant when they are deployed across countries and entities from top to bottom. Deploying metrics everywhere might help you sleep better, but less likely to deliver the expected outcomes locally.

Just think what if leadership was only about setting direction and empowering/trusting the people in-charge in the different countries where you operate?

4) Evaluating and differentiating fairly

The most visible impact of this ongoing cadence of performance-related conversations is on differentiation and transparency in rewards and opportunities for development. Managers must be brave enough to evaluate the ‘what’ and the ‘how’ and explain their decision on rewards without hiding behind the matrix and guidelines provided by HR. For many managers, this is probably about unlearning and getting back again to the basics of management. At Schneider, we have always been against forced distribution and we actively resist the temptation to ‘over guide’. We encourage our managers do their job, i.e. assess performance and differentiate in rewards.

5) Changing our culture and enabling speed and agility through digital technology

Digital is a unique opportunity to create new processes and rituals that support cultural transformation.

Performance review, ongoing feedback, recognition and coaching processes should be facilitated by simple, ‘employee-friendly’ tools that are integrated into the way work gets done in organisations. However, tools shouldn’t don’t end up becoming weapons of micro-management or ‘ends’ in themselves.

Leveraging analytics lets us equip managers with meaningful data to demonstrate the impact they have on people, and the progress they are making. Not only does this reinforce the empowerment of our managers, the deployment of processes doesn’t need to be micro-managed upfront.

Lastly, an environment that values speed over perfection is a key enabler for the alternative approach. For instance, we often see the lack of ‘100% accuracy in data’ being offered as an excuse for delayed goal setting. An agile workplace is all about adapting through regular progress checks and aligning of objectives throughout the year.

Conclusion

This approach is about altering the existing systems to create positive momentum based on two major shifts: Ownership – from ‘HR-owned’ to ‘Employee and Manager-owned’ and Process – from ‘Subjective and Unstructured’ to ‘Feedback-driven and Continuous’. However, true and meaningful impact will only be possible if all elements of the approach attain the same level of maturity and are combined well to create a powerful whole.

85% of our employees say that the performance review process is now a positive experience – we are energised by this feedback on the approach; the continuous progress in our employee engagement; and also by the global recognition as a great place to work.

In the end, managing performance is not an exact science but more about creating the right environment where people have fun in winning and beating competition together!

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