Future-proof your performance management systems: From Individual Ratings to Team outcomes

Dr Kelly Monahan (above), Global Lead on Talent Research at Accenture Research, writes that despite organizations recognizing the importance of teams in their businesses, their performance management systems do not reflect their importance, much to the detriment of overall performance.

The COVID-19 pandemic has forced many organizations to re-evaluate their working models and management systems to remain competitive in the current environment. There is increasing recognition that business success is no longer only about individual achievement, it’s about connecting people to form high-functioning teams. Today, teams have become central to how organizations get work done and achieve organizational goals.

However, despite organizations realising the importance of high performing teams for business success, few have the necessary team-based performance management systems and processes to formally evaluate and recognise teams as key drivers of business results. The performance-management systems of many organisations are outdated, focusing on individual outputs best suited for industrial work – dysfunctional norms where competition thrives and a systematic failure to acknowledge the reality that all work today is interconnected.

As Edward Deming said, “Every system is perfectly designed to get the results it gets.”  Today our systems are built on the false assumption of individuality rather than connection. Behavioural science has shown how rewarding certain behaviours within a system can crowd out other ones. Many organizations are unintentionally crowding out collaboration and connection by focusing on “what did you do for me lately” mentality during performance conversations. As organisations look at positioning themselves for the future, they need to reassess their performance management systems, focus them directly on the achievement of team’s key business objectives – and establish a direct connection between collaborative behaviours and team performance. Within this framework, success is measured not by what any one individual does, but rather, by the impact of the team as a whole and its contribution to business success. Not only does this increase teams’ accountability for results, but it also offers the opportunities for teams to find more innovative ways of working together and meeting their goals.

As leaders go back to the drawing board to chart out their future path of success, they will need to consider some important questions: To what extent is their current performance appraisal system preparing/enabling their organisation for success now and in the future? How effective is their organisation at setting objectives, goals and targets for teams and rewarding team performance and inspiring teamwork while also recognising outstanding individual performers?

While the thought of overhauling a performance management system can appear daunting, behavioural science offers a low-hanging fruit: reframing. The way we position and drive conversations in the workplace influences behaviour. Start your next performance cycle with this key question, “how are you making others around you better?”. Organizations who get this right, will create a performance management system which will be fit for purpose to deal with current and future challenges. Leaders will need to clearly articulate shared goals, quantifiable metrics and rewards that enables and incentivises teams to do their best work. The future of work rests entirely on the ability for people to connect, collaborate and innovate together. Are your systems enabling these inherently human behaviours?

The author would like to thank Mamta Kapur for her assistance in this article.