Gray: Structure the Key to Effective Performance Management

Ditching those cumbersome annual performance reviews seems to be all the rage in the business world these days. A slew of recent articles, including two recently published in the Harvard Business Review, have covered the topic in-depth and several well-known companies, including Cargill, Expedia and Microsoft, have publicly sent the formal review process packing.

But according to Purdue’s Allan Gray, canning the formal process doesn’t mean letting go of performance management altogether.

Gray spends a lot of time thinking about performance management in his role as director for the Center for Food and Agricultural Business. The conclusion he’s reached is that regardless of method, there has to be some sort of structure to the process of employee feedback.

“Performance management is a difficult thing, but the need to align employee activities and behaviors with company goals has to happen whether there’s a formal process or not,” he said. “Dropping the formality doesn’t mean dropping all semblance of structure in performance management.”

So, what exactly does that mean? According to Gray, it means striking a balance between the need for consistency in managing employee performance and personalized, effective feedback. It also means helping managers become more effective and efficient at feedback and coaching of their direct reports.

Two recent articles in the Harvard Business review have offered innovative ideas for handling less-formal reviews that still offer consistent structure and personal dialog with employees.

The first article, Tough Love Performance Reviews, in 10 Minutes, by Mona Patel, offers a peek at short reviews that allow employees to dictate tone while receiving timely feedback about one thing they are doing really well and one area that needs improvement. A few minutes are reserved at the end for the employee to offer a response and management to listen.

The second article, A 6-Part Structure for Giving Actionable Feedback, by Marshall Goldsmith, is an anecdotal piece about a salesman-turned-head of an insurance company who struggled with implementing structure into employee feedback. His team members often were confused by what was office chatter versus real feedback. The solution to the problem turned out to be bi-monthly one-on-one discussions with employees centered on a six-question approach:

1. Where are we going?
2. Where are you going?
3. What is going well?
4. Where can we improve?
5. How can I help you?
6. How can you help me?

While the process differed between article scenarios, they shared a common thread: structure.

Determining what the structure of effective performance management looks like is a challenge for nearly every business and, according to a recent survey by the Center for Food and Agricultural Business, that challenge affects agribusinesses as much as it does every other middle-market firm. The survey indicated that most agribusiness managers would rate their performance management processes as just average, suggesting the importance of exploring ways to make the process more effective.

According to Gray, there isn’t a one-size-fits-all approach to effectively managing performance. But he does believe it’s vital to have a process that helps employees align with company goals, receive regular feedback and have their performance evaluated fairly and consistently.

The challenges companies face in implementing performance management were the initial spark for Gray and his colleagues to focus the 2015 National Conference for Agribusiness on people, performance and productivity. The conference, which runs Nov. 10-11 in West Lafayette, features an entire afternoon focused solely on performance management and the review and feedback process. Included is a session led by Cargill, a company that recently did away with annual performance reviews.

“As our faculty work with agribusinesses across the industry, the discussion invariably turns to the critical role of talent in company success,” Gray said. “Yet, leaders from these same companies tell us that strategically managing talent is one of their biggest challenges. These discussions led us to develop this year’s National Conference theme around the people part of the productivity equation.

“The goal of the conference is to bring together academia and industry to explore the research and best practices for maximizing employee performance.”

Check out our upcoming programs and exceed your professional development goals! Position yourself to excel in your career by attending one of our professional development workshops. Each educational program focuses on different business topics and concepts related to the agribusiness industry you serve, including: marketing, sales, finance, talent management and strategy. Not sure which one is right for you? Let’s chat!