At some of the world’s largest organisations, we’re seeing a wave of change. Why? They’re realising that investment in traditional performance based management is not providing optimal returns. So what can? I suggest coaching. 

Before we get to the benefits of coaching, we need to look at the problems inherent in current performance management systems. The accepted definition of performance management, as summarised by Armstrong and Baron, is this:

‘A process which contributes to the effective management of individuals and teams in order to achieve high levels of organisational performance. As such, it establishes shared understanding about what is to be achieved and an approach to leading and developing people which will ensure that it is achieved’.

We may think this is a contemporary approach, developed to meet the needs of today’s corporate environments. However China’s Wei Dynasty used a similar “nine-rank system” for evaluating civil service officials in the third century. Of course, performance management systems have evolved since then, primarily in the latter half of the twentieth century, following World War 2.

Today, businesses have invested hundreds of millions of dollars in performance rating systems that have evolved from these historical models. Their aim? To  provide management and personnel guidance that will improve performance and productivity. Whether the input is generated by objective metrics, ratings, forced rankings or goal achievements, these systems usually involve a process of standardisation, designed to assess people in similar roles by the same criteria.

This generally results in a rigid process that gives managers a sense of control and a belief that they are providing employees with feedback and direction. It t is assumed that at the end of the process, employees have identified, or been provided with, areas in which they can improve their performance.

When job descriptions were tightly defined and many people acted in identical roles, this process was effective. Now; not so much.

A new framework for feedback

Both locally and internationally, a mounting body of evidence is reflecting the fact that not only are many employees dissatisfied by traditional performance-based ratings, the traditional process of assessment and comparison – on which promotion and remuneration are based – can actually  be counter-productive and de-motivational in the modern workplace. It is also a system that can be successfully “gamed” by agile participants if it’s not thoroughly managed.

People are looking for new systems to manage performance – processes that are engaging, inspiring and motivating. The formal structures that once shaped working environments have been replaced by a new fluidity. Therefore, where employers expect more flexibility and initiative from their people, employees in turn expect it from their employers. This extends to how their performance and development is managed.

The key to better performance management: Leaders.

Managers must create more rewarding and productive working environments, while individuals must be equipped and empowered to lead themselves to develop their skills and optimise their performance and job satisfaction.

Executive coaching is the first step in transforming successful senior managers into successful leaders. Successful organisations need leaders who  not only understand themselves and how to maximise their performance, but also understand, motivate and coach their teams, at both collective and individual levels.