How Meaningful Performance Conversations Drive Learner & Organisational Success

Lots of people don’t like performance management—particularly their performance reviews. And we can’t blame them. Performance review conversations are often useless interactions that don’t drive employee or business success.

Making a performance conversation meaningful to both employees and the company is essential for ensuring organisational success. We’ll dive into how you can turn performance conversations into impactful interactions to drive business success.

What are performance conversations?

Performance conversations are structured discussions between managers and employees that aim to evaluate and improve employee performance in the workplace. These occur regularly to enable feedback exchange, development planning, and the delivery of performance assessments in order to facilitate continuous improvement within the organisation.

Why are performance conversations important?

Performance management is crucial for driving forward momentum in an organisation, and a huge factor in getting performance management right is having meaningful performance conversations. We’re talking about performance discussion that is future-oriented and drives organisational transformation, here. According to Gallup, only 23% of employees believe their managers actually provide meaningful performance feedback.

Done right, performance conversations drive performance improvement in several ways.

1. More accurate assessment of performance. This probably seems like a no-brainer, but frequent conversations and the right metrics go a long way to ensure accurate evaluations.
2. Better feedback exchange through a two-way dialogue between managers and employees. Managers provide constructive feedback on employee performance, while employees give feedback on their development plan, challenges, and goals.
3. Improved goal-setting and alignment by setting clear, achievable goals for the upcoming performance period. These goals are aligned with business and individual objectives so that employee performance is always driving organisational success.
4. Development planning for employees. 94% of employees say they’re more likely to stay with their company if it were to invest in their professional development. Not only do performance conversations increase employee retention, but they also enable managers and employees to plan development initiatives to improve performance.

How to transform performance conversations into meaningful interactions

Your experience with performance management may be the traditional once-a-year kind of deal. Formal performance reviews are a crucial part of the performance management process, especially in larger organisations—the only problem is, doing them as an exclusively annual activity isn’t doing employees (or the company) any favours.

If you want truly effective performance conversations, you need to do five key things:

1. Set clear expectations and goals
2. Become a coach
3. Promote regular and ongoing feedback
4. Stay future-focused
5. Evaluate and adapt performance management processes.

A lot of organisations record, store, and manage their performance data manually, and that prevents organisations from accurately identifying patterns and areas for improvement in their performance data. It’s also way more time-consuming, and that stops organisations from being truly agile and proactive with their performance management. A performance learning management system (PLMS) can help you here by linking learning content with learning needs in order to drive performance uplift.

Set clear expectations and goals

Performance management can only drive business success when there are clear goals and expectations for employees to work towards. Not only that, but those goals also need to be aligned with business strategy. This way, when goals are completed the company’s objectives are progressed.

Of course, this is all easy to say—actually building that alignment is the hard part. For alignment to work, you need to utilise business capabilities. These are the mix of skills, processes, behaviours and knowledge that combine to deliver business outcomes. So, if you want your organisation to be known for the best customer service in the industry, your business capabilities might include quality service or increased customer feedback.

If you have your capabilities defined, you can set clear goals for your employees. These goals will be SMART (specific, measurable, achievable, relevant, and time-bound) to ensure they can be realistically achieved.

So, if your desired capability is “increased customer feedback”, your SMART goal will have to outline the specific outcome (increased customer feedback) and measurable aspects (Net Promoter Score), as well as be achievable, relevant to the business, and able to be completed in a timely manner. You’ll know it’s relevant because it will be derived from the

Make managers coaches

Simply sitting down to deliver a performance review isn’t enough to actually make performance management meaningful. Managers need to be trained in coaching as well—both formal and informal.

• Formal coaching involves the coach and coachee engaging in a structured relationship with dedicated learning outcomes. It has a set beginning and end, with conversations and meetings occurring at scheduled times.  
• Informal coaching is unstructured with no scheduled appointment times or specific start and end dates, instead occurring in everyday conversations or interactions. 

Receiving coaching gives employees  feedback in the moment of need, allowing them to correct performance issues as they come up rather than waiting to address them in a once-a-year review. This helps the coachee become more confident, independent, and productive, reducing time to proficiency and boosting business performance.

Promote regular and ongoing feedback

Irregular performance conversations don’t provide timely feedback to employees, which means performance issues go unchecked for long periods of time. Providing regular and ongoing feedback is the best way to mitigate this.

Scheduling regular and frequent one-on-ones is an easy way to ensure a constant feedback loop between employees and managers. A Forbes study found that people who had one-on-one meetings with their managers more than once a month were actually twice as likely to say they received effective feedback.

When it comes to a one-on-one meeting, communication and feedback goes both ways. The best way to make a one-on-one is to make an agenda ahead of time—don’t be fooled into thinking that a one-on-one is too informal to need one. Both managers and employees should contribute to the agenda to ensure that both parties get to discuss topics important to them. Consider check-in topics like:

• Current priorities
• Projects or issues the manager can help with
• Areas where the manager could better support the employee
• How work is going for the employee and their team (e.g. is the workload challenging, or is everything moving along smoothly?)
• How the employee is tracking in terms of KPIs, progress towards goals, etc.

Managers also need to work with employees to find the best pathway to employee development. That includes finding the right balance between positive and negative feedback, and discussing development methods and the direction employees may want to take. There’s no point prepping an employee for leadership succession if they don’t want to go into leadership, even if they are a high-potential employee.

Stay future-focused

Ever had a performance conversation where the discussion was focused entirely on your past performance with no indication of how you could or should improve for the next performance period? Yeah, it’s not very motivating, is it?

The worst thing you could do is focus on the past, especially if the focus is on mistakes and employee issues. We’re not saying you shouldn’t talk about past performance, but we are saying the bigger focus should be “where can we go from here?” Gartner found that looking to the future and potential improvement opportunities actually increases employee performance by up to 13%.

To do this, you need to go back to your business capabilities again. What capabilities will your organisation require in the future in order to meet their organisational goals? The gaps between current capability performance and future required capabilities (which you can assess with a capability gap analysis) guide where development should be targeted.

For example, say an employee on your sales team only closes five out of their monthly quota of seven. You would measure this as “low competence” (or something similar) in a gap analysis. Competence is the levelled scale that capability performance is measured in, but if competence is low then that means you need to provide training to improve that.

Now let’s say that same employee actually has intermediate competence. Maybe in your organisation you call that “meets expectations”—in other words, they’re filling their quota of seven deals closed. That’s all well and good for now, but what about your plans for the future? As your business evolves and scales, you’ll need to be closing ten, fifteen, twenty deals a month. But you want to be focusing on developing employees for that future now, because if you wait until you reach that future to start training, you’re just playing catch-up.

You also need to consider what your employees want to achieve as part of their career development. It could be that their professional development needs to take a different path to properly align employee aspirations with business strategy.

Evaluate and adapt performance management processes

You can’t just set and forget your performance conversations method. Over time, business needs, employee preferences, and best practices in performance management evolve, and that impacts how effective your performance management processes are. You should evaluate the performance management process continuously throughout the year, rather than waiting until the end of the performance period.

• Conduct anonymous feedback surveys to gather feedback from employees and managers about their perceptions of the process, how clear performance expectations were to them, and the frequency and quality of the feedback they received.
• Measure performance metrics and KPIs. If KPIs aren’t being met, then the performance management process has failed to assign the right development opportunities and the impact of performance management initiatives on business outcomes has not even effective.
• Track employee engagement and retention rates. If employees feel undervalued, underappreciated, or that their careers aren’t being given priority in performance conversations, they’re less likely to be engaged and more likely to seek employment opportunities elsewhere.

Analyse the data you collect from these evaluations to identify trends, patterns, and areas for improvement. These will indicate the aspects of your performance management process that need to be addressed. Do employees feel their performance conversations aren’t giving them quality feedback? You may need to spend more time developing managers as coaches (see point 2).

The impact of poor performance conversations

Imagine you’re on a sales team, and it’s coming around to your yearly performance review. Your manager says that your performance hasn’t been up to standard—in fact, you’re falling behind. This would have been helpful to know earlier, but because the organisation’s performance conversation method isn’t effective, you’ve missed your KPIs and have created a bigger issue for team performance (or even business performance).

A performance conversation is ineffective at driving performance improvement if:

• It’s performed irregularly and without frequent check-ins and feedback
• Insights aren’t used to create development plans for improving performance
• It focuses heavily on past performance rather than future outcomes
• Performance goals are unrealistic or don’t create a clear picture of expectations
• It’s collected, managed and stored manually.

So, what actually happens to your business when your performance discussions fail to turn into meaningful conversations?

1. Employee morale and engagement falls. We said before that your employees want their employers to invest in their career development, and impersonal performance reviews that don’t deliver the critical feedback they need to improve will just turn them off. Once your employees check out, their performance drops (plus turnover and absenteeism increase).
2. Employees become misaligned with organisational goals. Not only does this mean employees don’t know how their efforts contribute value to the business (lowering engagement) but they may not even be contributing to the bigger picture at all (and that’s wasted time and effort for everyone). Performance management that doesn’t drive performance is just box-ticking compliance.
3. Improvement opportunities get missed due to a lack of timely, constructive, and actionable feedback. Without the right development opportunities, employees won’t be able to perform efficiently and the business won’t be able to track towards long-term organisational transformation. In other words, you’ll fall behind competitors.
4. Increased conflict and tension between employees and teams. It may seem small, but no one wants a toxic workplace culture. When performance conversations aren’t actually making a positive difference in the workplace, people start to get frustrated, especially if they’re picking up the slack for another team member. That means lower engagement and higher employee turnover.
5. The organisation can be exposed to legal repercussions. Performance review bias can easily creep into a performance discussion if you don’t have the right systems in place, whether intentionally or not. Bias and discrimination can lead to legal action—and that costs money and reputation, making it harder to find and retain top talent.

Key takeaways

Transforming your performance conversations into meaningful interactions is essential for enabling a sustainable, future-driven workforce. Making your performance conversations actually impactful doesn’t have to be hard, either. There are five strategies to ensure that performance conversations are more than just a one-off discussion.

1. Set clear goals and expectations
2. Train managers as coaches
3. Provide regular and ongoing feedback
4. Stay future-focused
5. Evaluate and adapt performance management processes.

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