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Sir Brendan Barber: Performance management tries hard but has lost its identity

Tuesday 13 November 2018

Acas Chair, Sir Brendan Barber introduces the new Acas research and guidance on Performance Management.

Acas Chair Brendan Barber blog Sir Brendan Barber

Sir Brendan Barber is Acas' Chair, joining in January 2014. Previously Sir Brendan was the TUC General Secretary (2003 to 2012) and sat on the Advisory, Conciliation and Arbitration Service Council (1995 to 2004). Sir Brendan was knighted in the 2013 Birthday Honours for services to employment relations.

Acas has just published new research and guidance on performance management. As the title of the research report suggests, a performance review of performance management systems might come up with an overall assessment of "Improvement required" pdf icon 'Improvement required'? A mixed-methods study of employers’ use of Performance Management systems [1Mb].

Part of the problem with systems for managing performance is that they often try and be all things to all people. They need to make staff more productive but not forget to motivate them; they need to give staff clear goals but allow room for personal development; and they need to be fair and transparent without becoming too rigid and bureaucratic. One notable exception to this is pay, which did not emerge as a top priority for many employers in our survey but was seen to affect some other decisions (more of which later).

Our research - a combination of an online survey and face-to-face workshops with HR managers - found that there doesn't appear to be any great revolution taking place in how we assess performance. True, there is a feeling that soft touch 'everyday' performance management should have more prominence in the future, facilitated by digital systems and new working patterns. But the old stalwarts, such as annual appraisals, personal objectives and development plans are still dominant features of many systems.

A lack of clarity?

Performance management is something that everyone has an opinion on, but even within one single organisation, it can clearly become a rather tangled web of values, expectations, paperwork, prejudice and, critically, emotions. As our new Performance management guidance states, "discussing performance can be very emotive", with employees feeling that they are not just being weighed and measured in terms of their outputs, but for who they are as people.

One strong theme to emerge is typical of so many aspects of working life and public policy more broadly: the need to get the balance right between the use of the carrot and the stick to influence performance and behaviour. Should performance arrangements be about celebrating the good or addressing the bad?

Our research showed that private sector organisations with more formal performance management systems felt that the appraisal system was a suitable tool for dealing with poor performance. On the other hand, employers with less formal systems felt that appraisal systems were only suitable for identifying good performance and motivating staff. There seems to be a link between 'formal' and 'problem' and 'informal' and 'solution'.

Other contradictions in the objectives and the practice of performance management (PM) came to the surface, for example:

  • Across all the workshops, identifying 'training and development gaps' was prioritised as a key purpose of their PM system but
  • Only 10% of respondents in our survey said that their PM systems were actually used for planning and monitoring training and development.

And:

  • 11% of managers stated that they used PM systems as a good way to enhance workplace effectiveness and 10% used it to increase financial performance but
  • just 4% said they used it for employee engagement.

What's fair?

The three core values that emerged as those most important to underpin an effective PM system were consistency, transparency and above all fairness. On the face of it, these are laudable, albeit people's conceptions of what constitutes a 'fair' PM system and their underlying motivations for pursuing one differ wildly.  For instance, in larger, private-sector organisations, the pursuit of fairness was bound up with need for a mechanism to determine performance-related pay awards in a way that employees can actually see is objective. Although these companies are primarily using their PM systems for non-pay based activity - such as monitoring employee performance against targets - the results of these activities are nevertheless used to inform secondary decisions regarding pay.

And when asked about if and how arrangements are adapted to respond to people with particular needs and disabilities, there was little recognition of the value of this. Participants in our workshop from small, private organisations and those with less formal systems felt strongly that customising systems for disabled staff would result in them being unfair "for everyone else". This was summed up by one participant who said:

"With regards to disability or not, if somebody can't do the job, they can't do the job"

A majority of our survey respondents (63%) judged that their PM system was "a fair way of assessing performance regardless of employees' race, gender, age and personal characteristics".

We know that making reasonable adjustments for staff who have a disability can be difficult for some employers to get to grips with. Acas advisers certainly find that there are lot of myths about what constitutes 'reasonable' (how accommodating do they have to be) and how much it might cost (often not very much). It can also be tricky for some employers to understand what they can do for so-called 'hidden disabilities' such as mental health conditions. But it does beg the question: shouldn't PM arrangements be subject to reasonable adjustments?

Is the parent-child dynamic beginning to fade?

Traditional performance management systems have tended to be based upon a formal yearly meeting which, for some, may feel like being summoned to the head-teacher's office. Now there seems to be an increasing focus on more informal conversations throughout the year that, in theory, play down the status and power differential between manager and employee. It would be tempting to see an (admittedly slow) evolution in the use of PM systems towards a more adult-adult dynamic when it comes to appraising someone's performance.

But our research shows a much more muddled picture. Although one tends to see most small firms as stereotypically informal, with more reliance on face-to-face interactions, they seem to be very keen on using PM systems as audit trails for performance purposes. And although our online survey found that some larger organisations put more store on employee feedback - in terms of seeking their views about how well they have performed - those in our workshops still placed a great onus on the manager's role in assessing performance. A complicating factor here is that there seemed to be a general lack of training for line managers in how to use the systems.

Who likes surprises?

A strong, common theme that emerged at our workshop was eagerness for PM systems to be used to build better relationships between managers and their staff. This seemed to be based upon a mixture of pragmatism - as one participant said, unless you have regular catch-ups "people can go off in a different direction ... and lose focus on what the business wants" - and perceived fairness - as another participant said "you've got to give in-the-moment feedback. Sort of saving it up and giving it after a month, they're going to be like 'why's he done that?'". Acas guidance, published today, reinforces this point. To ensure fairness it advices employers to avoid discrimination, favouritism and 'surprises'.

The chief surprise to come out of our research into arrangements for managing performance is that there aren't more surprises. This may be partly a reflection of employers largely hanging on to what they know, but there is also a clear tension between the realisation that things should change and having the resource and energy to make this happen.

Many employers are clearly prioritising productivity over developing and motivating their staff when it comes to performance management, and smaller firms are inadvertently discriminating against disabled employees by imposing one-size-fits-all systems. There is an acute need for better managerial training and straightforward reference materials to help employers stay within the law and understand the bottom-line benefits of adopting an 'employee engagement' approach towards performance management.

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