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Building Performance Management: Effective Performance Feedback for Growth

June 21, 2024

In this series on performance management, Dr Chintan (Head of HR at Nium) shared learnings on getting buy-in from managers and building processes through feedback.

How performance management evolved with processes and business decisions

Fukuko: How you develop the strategy for the product influences the internal processes. The internal decision-making process aligns with how you make decisions for the business.

With that, maybe we can discuss performance management, which is a top priority for HR. Could you share a bit about your current phase in the performance management process? Could you give me some background on where you are?

Dr. Chintan: Certainly, our performance management process has evolved over a period of time. The primary reason why it has evolved is because the needs within the organisation, the talent within the organisation, has evolved as well.

Some of the changes that we've seen in our processes, if I can list down a few, include moving away from a four-point scale to a five-point scale. The assessment scale itself has changed, and we've moved from not-so-frequent formal touch points to more frequent formal touch points.

In the past, we didn't use a formal assessment criteria. Now, we've introduced an assessment criteria, or rather, I'd say a framework, which is the nine-box framework in the organisation.

All of this has, like I said, primarily come from the feedback from our employees, our managers, our leadership, who have brought in a certain valuable insight or feedback or input in terms of how we should now look at the performance management. If I talk about the continuation of how this has changed, even within HR, it has changed.

Obviously, the HR folks have to drive this. A few years ago, we used to do a very mechanical training around the platform, very mechanical training around what the process is, go in the system, show them what to do, etcetera. But now there is a lot more that we do as an HR to partner with our stakeholders better.

We now start to focus on what is really in it for them. When I say them, it's the employees, the managers, and leaders. We bring in real coaching and practical advice in terms of what should really be done if you encounter a certain scenario.

We're equipping a lot of our managers and leaders. We are helping them prioritise in different scenarios.

We're equipping a lot of our managers and leaders. We are helping them prioritise in different scenarios. How do you prioritise decision-making over talent? A lot of our talent is homegrown. A lot of our managers and leaders are homegrown. This is their first job and they continue to grow here.

Their exposure to the world outside is limited. We try and bring in that outside-in perspective on what's really working by bringing in a framework, be it a written or a conversational input. These are the changes that we've seen in the process. This is how we've evolved in this process of performance management.

From Resistance to Results: Enhancing employee development and feedback

Fukuko: Amazing. Thank you so much for sharing. I'd love to delve deeper into some of the things that you've shared so far.

Perhaps we can start with this idea that you just ended on, in terms of coaching employees and managers. I hear that this is a very common challenge for many organisations. How do we ensure high-quality feedback from the managers? How do we ensure that they dedicate time and attention to this process?

Because it's additional work for them. Could you maybe share an example of a pushback or a challenging situation that you have faced with a manager or an employee, and how you or your team went about coaching this team member?

Dr. Chintan: Before I answer this, let me tell you how we have streamlined the process. As you mentioned, this is usually an administrative, time-consuming process for most managers. We've implemented two major changes.

One is the introduction of the nine-box method, which is run every quarter. This means that managers, leaders, and employees have a fair assessment of where they are on their performance journey as well as their potential journey. At any point in time, if feedback is shared with an employee, they are not surprised by the feedback, whether it's good or bad. That's one thing that has helped.

Second, our mid-year process. While we have these touchpoints, we have a mid-year and a final year assessment. The mid-year is extremely light with no rating, but just letting the employee know whether they're on track or off track compared to their goals or the organisation's expectations. It reduces a lot of administration time and allows the managers to focus on having real conversations.

This approach makes sense for someone to improve in the remainder of the year. It has helped us tremendously in delivering the right message to our employees. They're more convinced and the number of pushbacks is much lower than before we implemented these changes.

Additionally, in both cycles, we conduct thorough manager training. While I'm sure all organisations do this, we've also trained managers on what different scenarios look like.

We equip them with a framework on how to give feedback. This is largely driven by culture. We bring in culture sensitisation. For example, someone in APAC might prefer feedback differently versus someone in the US. Receiving feedback and giving feedback, if the manager is in the US, requires sensitisation on how to give feedback to someone in APAC, and vice versa.

We equip them with a framework on how to give feedback. If they're a first-time manager, it's mandatory that they go through this training, as well as seasoned managers. The training covers how to give feedback and how to structure their feedback.

This is largely driven by culture. We bring in culture sensitisation. For example, someone in APAC might prefer feedback differently versus someone in the US. Receiving feedback and giving feedback, if the manager is in the US, requires sensitisation on how to give feedback to someone in APAC, and vice versa.

These elements are included in the manager training to ensure they understand before they walk into that situation. In the manager training, we bring in common scenarios that we as HR partners learn over time.

For example, a scenario where someone does not believe or accept the rating given to them. If all the ducks are in a row, this scenario shouldn't happen. But if it does, we discuss how much time the manager should spend on it and when to decide to have a follow-up conversation or bring in the HR partner. These are nuances we talk about in our manager training to ensure managers know when to break the conversation.

All of our recommendations are managed. Our training for managers is to take a coaching approach rather than a tell approach in performance management. We usually begin with, "So, tell me, how do you believe the work this year or this quarter has been? What aspects have worked for you? What are your own learnings?"

Then we bring in an aspect of the manager seeking permission. "Okay, I agree with seven points out of the ten you said, but I have a slightly different view about three others. Are you okay to receive this feedback?"

We structure it in a way so that the acceptability of the feedback is far higher. These are the points we train our managers on to ensure that pushback is limited. It's not that we don't get pushback or there are no escalations to HR after the process, but at least our managers are equipped to handle a scenario in a one-on-one, if there is one.

Then we take on anything exceptional with the leaders, with the manager, in a tripartite format, or in a group if need be. That's the broad approach we've taken at VM to equip the performance management philosophy.

Fukuko: Wow. And I love that because it also helps you and the team iterate on the process. The more scenarios you're able to bring into the training, the more you're able to equip managers in advance about how to hold that space without feeling the fear of giving constructive feedback.

Because I think often constructive feedback comes from uncertainty or fear of, oh, how is this going to affect my reputation or the way people see me? So, giving them tools is such a big part of this.

Dr. Chintan: Absolutely. Everything is about credibility at the end of the day, for managers as well as for the employees. Nobody likes to lose credibility.

Hence, these frequent formal and informal touchpoints add a lot of value. A constant assessment of where the employees are moving on the performance versus potential curve gives a lot of comfort to both people in terms of where they're headed when we do the final assessment.

Choosing the Right Frameworks and Rating Scales for Performance Management System

Fukuko: You mentioned the nine-box framework. This is one that we also actually integrate into our leadership programs.

Could you share a little bit about how you decided on this framework specifically compared to others? Were there other frameworks that you explored when thinking about what to integrate as well?

Dr. Chintan: This has been a journey for us as well. A few years ago, we did not have any mechanics around assessing our talent. A few years ago, we introduced the four-box because we were not too big an organisation.

The nine-box was a tool that required a certain number of people to fit into nine boxes, otherwise, it doesn't serve the purpose. So we introduced the four-box.

As we grew as an organisation, we saw the need to now look at something which is wider, which helps us differentiate our talent outside of that four-box. Very naturally, because we were using the four-box, the nine-box was the first preference, because the format, the thinking, is something that the organisation, the managers will use.

That was a very natural choice for us. However, we didn't go just because it was available. We conducted an assessment. What we've done is we've customised the nine-box model to suit aspects of DM.

While one side of our nine-box model is performance, which is largely driven by the five-point scale, the other aspect comes from potential. And you define potential keeping in mind philosophy, which includes agility, responsiveness, and collaboration.

It is primarily driven by the value system, which contributes to potential. That is how we were able to arrive at this model, and we thought it was a good model for us to implement. That's the journey of how we landed on the nine-box model.

Fukuko: I love that integration of the values into the performance, so that it's actually customised to what the needs are of the organisation, explicitly stating the behaviours that are expected.

Something you mentioned earlier that is a bit more technical, but I want to dive a bit deeper, is your move from a four-point scale to a five-point scale. Could you share a bit more about the rationale behind this?

Dr. Chintan: Because we were using a four-box model, it tied in quite well with the four-point scale. However, in the process, what had happened between then and now is we introduced new values.

These values of our organisation, expected behaviours, etcetera, were not fitting directly into a four-point scale. At that time, we wanted to integrate the 'how' and the 'what', which is the performance and the behaviour in the performance process. We had to identify which was more suited to the growing need of how we wanted to assess talent, and that's where we adopted a five-point scale.

It also helped us, while we don't enforce a bell curve, to give some guidance to our managers in terms of how to spread their talent, how to look at their own talent within the team. We don't ask managers to peg them.

Naturally, at some stage, you'd start to see a certain curve. It doesn't have to be a bell curve, but you start to see that differentiation. A five-point scale helped us bring that differentiation with 'meets' in the middle. Above that are people who are exceeding, below them are where we may need some kind of intervention.

It helped us create that. Then naturally, what we did after that is we merged our 'how' and 'what' into our performance, which is also the journey that I was talking about. Now we have a potential which is a slightly different way of looking at it. So that's purely behaviour, whereas our performance is driven by how it is.

That's what has helped us get our mind box together. That journey has been very interesting for us. We are starting to see some data come out, some information come out, which we are processing.

Managing Change in Performance Assessment

Fukuko: It's great to hear about this journey because I feel like many companies start off focusing on performance in terms of achieving results. However, once you explicitly state those values, it presents a fantastic opportunity to readjust and iterate how you expect people to work beyond just reaching results.

I'd love to hear from you about the biggest challenge you've faced over this process while you've been on this journey.

Dr. Chintan: Oh, there are so many. I could go on and on about challenges. I'm going to give it some thought before I respond, because there are so many thoughts coming to me.

I think one of the biggest challenges we had was maturing our managers because we kept changing the performance management. If we look at the graph every few months, there has been a significant change in how we've started to assess that. And not everyone was ready to understand how and what needs to be done to ensure that we assess uniformly.

Obtaining that was the biggest learning. It's been a challenge, but it's also been a learning experience for us to work with our managers. Having managers, employees, and leaders understand why we are changing, what it means in terms of change, and what will be the benefit to the organisation is the essence.

Whatever we change is because we want to drive a certain outcome for the organisation. Accepting that can be difficult, and not everybody understands and accepts it at the same time. It's the change management in terms of when we adopted or evolved our performance.

People like to be in comfort zones. If they have done something in the past that has worked for them, there will be resistance to change. But we need to evolve as an organisation. Bridging that journey for a certain set of people was the biggest challenge for us.

Fukuko: I'm sure that ties back into what we just talked about around training them, evolving the training, some people accepting the fact that, I guess some people might take a bit more time, and that's okay. Because we often feel like, oh, we delivered the training. We told you all of this, right. How come you don't get it and it takes time.

Dr. Chintan: It does. It does. And then, you know your people over a period of time, you have to go in the system and check whether they've written the feedback the way it should have been written.

There are some cases, some scenarios you'd want to validate before the results are published. That sanity check is something that we, as the HR partners, are on top of. We want to make sure that wrong messages aren't sent.

Just to give an example, an employee is given a rating of 'does not meet expectations', but the feedback written there is, 'oh, you've been a fabulous individual'. We want to make sure that contradicting messages don't go out on the same form.

That sanity check is also sometimes very, very important. Not all managers are comfortable giving tough feedback. How do we equip them to give tough feedback? That change management has been a great learning for all of us.

Understanding Organisation-Specific Needs and Building a Culture of Respect and Growth

Fukuko: I think a lot of our community members will resonate with that.

The final question I had for you is, if you were to give one piece of advice to someone who is examining their performance management system, looking to revamp it, or they're at the early stages of actually getting buy-in from leaders to incorporate this, what would that advice be?

Dr. Chintan: There are so many things that are coming to my mind, but if I have the liberty, I'm going to give a few.

First, I think as an HR professional, we need to understand the requirements of the organisation, the stage of growth, the type of talent that sits within our organisation, and then decide the process of building or revamping our performance management process.

Just because a similar organisation or our competition adopts a certain philosophy doesn't mean it will work for us like it does for someone else. One size does not fit all, and the leaders need to participate in the performance management process as much as HR is driving it.

That's the first key message that I have. It is about understanding the landscape of our own organisation and then deciding on the performance management process, tool, framework, etc.

Secondly, from my own experience, I can tell you that it's okay to change processes frequently. Sometimes this will create confusion. Some employees may complain, some managers may not be happy, they may not understand why HR keeps doing that.

But I can tell you with confidence that if there are sessions conducted with the intent to explain what's happening, what it means for the organisation, and how it helps the organisation transform, and then connect it to what's in it for them, it usually works.

My second learning or message would be that it's okay to change. Just because we've adopted a process doesn't mean we have to stick to it for life. It's okay to change over a period of time. In this process, what is important is very clear and crisp communication, conducting very specific cohort sessions for people who we know may be troublemakers. I'm sorry for using that word, but it's important for them to be taken along.

Just because we've adopted a process doesn't mean we have to stick to it for life. It's okay to change over a period of time. In this process, what is important is very clear and crisp communication.

This could be a very small population in each organisation, but driving that change management is our responsibility as HR professionals and not the responsibility of leaders, managers, or employees. It's okay to change, but we need to own the change process.

The final thought that I can leave with is the driving force behind any performance management process is to have better and more actionable feedback where the action holder, the employee at the end of the day, is convinced that the feedback will help him or her grow as a professional within that company or in that industry.

Performance management can work brilliantly if the culture around the performance management aspect is respected. It's about creating a culture where giving and receiving feedback is respected in the same way.

These are the three lessons that I've learned by implementing performance management here, as well as in my previous organisations. These are things that I don't read about on a blog or hear in a book, but these are my own practical learnings that I have witnessed.

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