Posted on January 9, 2015

Cracking the CODE on Performance Management

Have you ever felt that your employees are not measuring up to standards? Are performance reviews not telling you much? It may be time to examine your performance management processes.

Becky Falvey, Senior HR Business Partner at Paycor and performance management expert, recommends using the acronym “CODE” for effective performance management, explaining, “if a manager follows these steps in a consistent and effective way, it would allow them to get the most out of performance management.”

What is CODE?

CODE stands for:
* Conversation
* Observation
* Data
* Execution

Each piece of CODE has a distinct role to play in performance management.

C is for Conversation

Only half of employees consider conversations with their managers to be high quality, yet quality conversations can dramatically increase performance. So how can managers take conversations from good to great?

Here are some suggestions to improve manager-employee interactions:

* Make sure one-on-ones are regular and structured. Consider using a template or agenda document to set expectations, make sure all points are covered and provide good documentation.
* Review progress toward business goals and development goals. Adding developmental goals tells employees that you care about their development, which strengthens engagement.
* Discuss successes and roadblocks of past performance. Keep your discussions grounded in the immediate past and future, connecting previous performance to business goals and encourages the employee to maintain great performance in the future.
* Focus on the employee as an individual and how they contribute to the team and the organization. Clarify the impact the employee's work has on the overall team and the company to help them connect the dots.
* Include more perspectives. Take your perspective, the employee's perspective and add a 360-degree view that includes additional input from peers, mentors and clients.

O is for Observation

Managers must ensure fair, accurate and quality feedback by obtaining it from multiple and reliable sources such as peers, teammates, clients--and personal observations, which can be the most difficult to do. Managers and HR professionals can feel intrusive during observations, or as if they don't have enough time to dedicate to them. However, there is no replacement for actually seeing something with your own eyes. Examples include side-by-sides, ride-alongs and job shadowing.

Not sure where to start when it comes to observation? Check out the following suggestions:

* Schedule and structure moments: adding some structure to observations can set expectations.
* Don’t just criticize behaviors. Show why you’re focused on specific behaviors, changing the dynamics of the interactions between manager and employee.
* Focus on individual tasks and on enterprise contributions. This connects the dots for the employee on how they contribute to and impact the organization.
* Reincorporate feedback into conversations. Produce and update an actionable plan for post-observation follow-up.

D is for Data

Tracking and analyzing multiple data sources helps drive performance. Statistics show that 90% of companies collect performance data but only 51% use it to improve talent development efforts. What's more, 32% of companies do not examine data in any way. There is a disconnect between collecting data and using it. You must analyze data and connect the dots to improve performance.

So how can you incorporate data into performance management?

* Schedule regular intervals to review the data as a team.
* Combine numerical results with developmental and behavioral data to generate insights.
* Collect and compare performance data focused on individual contributors as well as on managers and the organization as a whole.

E is for Execution

If you are not focusing on follow-up and completing action plans, none of the conversation, observation and data will matter. Managers must prioritize action plans and follow-up. Every performance interaction should end with a specific plan to drive execution.

Consider using the following tactics:
* Start each one-on-one with a review of outcomes from the previous one-on-one and the status of actions.
* Include a specific plan of action for improvement when suggestions for improvements have been made.
* Do a verbal recap of the performance conversation.
* Create a written, shared action plan each time for both employee and manager, so you will know what to do after the meeting and what to discuss at the next meeting.

Good performance management leads to higher engagement, which is critical to a company’s success. The CODE acronym can help you improve performance management and reap the rewards at your organization.

Are you interested in learning more about performance management? Download Becky's complete webinar, Getting Performance out of Performance Management.