After interviewing and onboarding with an organization, most managers and employees primary experience with HR is via the performance management process.  While some companies may have a more tolerable process than others, often at best we have minimal process compliance where employees and managers begrudgingly check the boxes to the required activities. Further, the flip side to most organization’s pay for performance philosophy is that it can create a scarcity mindset with its accompanying symptom behaviors.  Knowing that only 20-25 percent of a team can get the highest ratings and rewards can lead to hoarding work, information or resources and possibly in-fighting over the most visible projects.

So how do we shift away from something with the best of intentions to an approach with real engagement and business impact?  There is no easy solution but integrating approaches that foster an abundance mindset may unlock better outcomes.  The “how” to transform performance management will be guided by your organization’s strategy and culture, but maybe some of these concepts will spark the limitless thinking that an abundance mindset creates. 

“If we must, we can keep the sacred cows of performance management, but I will continue to daydream about the ways HR can ensure the 40+ hours people spend at work are more meaningful and impact both our employee’s well-being and ultimately society.”

Incorporate gratitude

Most performance management systems overemphasize individual performance, which can foster hero cultures that reinforce constant driving and achievement at all costs.  One common perception is that employees may be penalized for asking for help or even saying no to work so they can manage their overall well-being and productivity. While many organizations have variable rewards programs to recognize people who do work smartly, help others grow and create enterprise solutions, the dollar amounts are rarely enough to adequately reinforce the desired collective behaviors.  For example, I wonder what new behaviors might emerge if only half a person’s target bonus came from individual performance and the other half from recognition from colleagues. Creating reward programs that truly do more than just celebrate achievements, but also allow employees to recognize both the people who upgraded their thinking and the learning from challenges overcome on a journey can energize employees and stimulate better results.

Focus on what you have

“People don’t change that much. Don’t waste time trying to put in what was left out. Try to draw out what was left in – that is hard enough.” (First, Break All the Rules Buckingham & Coffman, 1999).  Shifting to an abundance mindset also means removing the focus on development areas in performance management, which is often what people are left stewing on after a review. I truly believe that at least 95 percent of employees are doing the best they can given their circumstances.  Instead of feeling like they need to fix something, leaders and employees alike can start discussing what can support them more in leveraging their unique strengths and building on what is going right. This approach can also foster a stronger inclusive culture as people feel more confident in sharing their skills and experience, knowing they don’t need to conform to a specific mould. And people are more likely to stay at organizations who make them feel seen for who they are as opposed to who they are not.

Develop mastery and purpose

Author Daniel Pink identified autonomy, mastery and purpose as three big keys to employee motivation.  And research shows that engaged and motivated employees deliver better business performance. By shifting results-only focused goals to ones that expand to mastery there is an opportunity for employees to feel like they are not just at a company to do a job, but that their own purpose is innately tied with that of the organization.  In this scenario, a managers focus shifts from coaching to excellence and not just achievement. Further driving performance, mastery experiences create confidence in one’s ability to make an impact on the world and that abundance mindset instills more energy and creativity in the work at hand. Updated compensation approaches can support mastery levels regardless of that year’s performance or projects, connecting compensation more strategically to key skills to retain for the present and future. These mastery levels will need to extend to managers as well to reinforce the importance of them being the best leaders they can be.

Create a Win-Win Environment

Imagine what could happen if employees gave their managers a rating too. If a manager’s compensation was impacted by employee ratings, perhaps they might intentionally focus on creating the right environment for their team members to flourish and do their best work. This practice could enable more of a partnership mindset and shift the power dynamic. Managers who can clearly communicate the work to be done and how it ties to individual skills, development and business outcomes can help team members see how everyone wins. Further, this approach might minimize feelings of favoritism and unfairness across larger teams as managers may be inclined to better balance workload and opportunity for all. Re-designed bonus pools can reward team results, collaboration and innovation specifically.

I am sure that many of you reading this article have already declared some of the suggestions above as impossible.  There is no doubt more to rethink and refine. I just wonder why are we fighting so hard for the 20 percent when it takes a village to really get it done? If there is a truly measurable difference, then pay it, but this splitting of hairs is a waste of valuable time. There’s enough for all of us. We are enough.

By re-purposing time spent on backward-looking evaluation processes and shifting to more development activities and redesigning rewards systems to reinforce the behaviors that really drive performance, we can create more sustainable organizations. With burnout at an all-time high, leaning into an abundance mindset can generate more energy and space for empowered creativity. Feeling that an organization is full of possibilities, people may be less compelled to seek new career options elsewhere. If we must, we can keep the sacred cows of performance management, but I will continue to daydream about the ways HR can ensure the 40+ hours people spend at work are more meaningful and impact both our employee’s well-being and ultimately society.