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The Impact of Performance Management on Employee Motivation

The relationship between performance management and employee motivation is currently undergoing radical changes, as new emerging technologies combine with the impact of the coronavirus pandemic to create a new reality. Performance management which focuses on employee wellbeing as much as it does on achieving goals is paving the way for greater levels of motivation and quality of employee output.

Let’s examine how this new approach to performance management can result in sustained employee engagement and motivation.

Developing great leaders who engage with their employees

The degree of engagement and motivation an employee will possess is largely influenced by the level of engagement and support they receive from their managers. Managers who engage regularly with employees and adopt the right approach will be best positioned to steer performance in a positive direction and increase employee motivation.

Consistent engagement through one-2-ones and regular check-ins not only gives managers an insight into the day to day performance of an employee and allow them to make adjustments to their role or workload before problems arise, it also helps to foster meaningful relationships and an understanding of an employee’s personal drives and qualities.

Additionally, by regularly engaging with individuals, leaders can pre-empt decisions relating to promotions and lateral moves within the business through a better understanding of how their roles and abilities fit within the organization. Individuals whose talents might be best suited in a different team or department can be fast-tracked into better suited roles, raising the level of performance throughout the company.

As former CEO of Gilette Colman Mockler observed, “every minute devoted to putting the proper person in the proper slot is worth weeks of time later.”

Fostering goals challenging high potential employees and improve skills for underperformers

Performance management software offers managers and leaders a great insight into the inner workings of individuals and teams, allowing them to monitor successes and failures while pinpointing areas of concern.

For underperforming employees, this information can allow HR leaders and managers to target perceived skills deficits and bring them up to speed with coaching and training. Realistic goals can then be established to help these employees cope with any potential stress due to being overworked or simply out of their depth.

But often companies can overlook paying the same attention to high performing individuals, draining time, energy and resources focusing on employees who might be bringing overall performance levels down. Instead, leaders should look to offer the same level of commitment to providing challenging new goals for the A-players, stretching their abilities, broadening their talent stack and ultimately increasing their motivation towards delivering rewarding results.

Leaders who engage with their employees are best adapted to understand their strengths and weaknesses so that goals can be tailored to suit their personal and professional abilities and ambitions.

Creating intrinsic motivation to compliment extrinsic rewards

When looking to reward good performance as a way to increase future motivation, business leaders are able to draw upon extrinsic and intrinsic motivation and rewards. Commonly, leaders focus on the former, rewarding employees with pay rises, bonuses and other remunerative actions, as well as other perks such as trips and trophies. These are the typical perks most businesses will offer.

But extrinsic rewards alone are insufficient to deliver a high degree of motivation, only satisfying employees on the surface level of the work itself. In fact, incentive-based compensation plans often fail to motivate sufficiently due to the expectancy and instrumentality of such rewards. To truly engage employees there needs to be intrinsic motivation built into the tasks at hand, so that the tasks in and of themselves are rewarding.

While it might seem like a tall order to encourage any individual to find a given task deeply rewarding, there are ways leaders can frame goals and structure approaches to work which promote the sense of intrinsic satisfaction and motivation. Tasks which require a degree of skill variety to perform and have a tangible, meaningful outcome (i.e. the end product is clearly something of value which will be useful to others) are more likely to create intrinsic motivation, and consequently a higher standard of performance.

Leading with compassion—understanding employee well-being

A deep concern for the emotional and physical well-being of employees, shared by business leaders and HR managers in the wake of the coronavirus pandemic, has led to a fundamental shift towards compassion-driven leadership. Large scale remote working combined with the psychological effects of a global pandemic have forced businesses to adopt a strategy which emphasizes well-being and seeks to build resilience.

Managers who engage in regular conversations and consistent feedback will create employees who understand their well-being is taken seriously and enjoy higher levels of motivation. With many employees working from home, these conversations can be coordinated via performance management software to guarantee consistent delivery and continue to strengthen relationships.

Such conversations also allow for a proactive approach to well-being which otherwise wouldn’t be available, thus preventing problems which might lead to long-term absence. Wellness initiatives can be implemented suitable for remote workers and those working on-site, with companies offering everything from free Pilates classes and fruit deliveries, to additional healthcare benefits and annual wellness retreats.

HR managers should encourage staff to propose their own ideas for wellness initiatives, which can easily be coordinated through Microsoft Teams dedicated channels or via the company’s intranet, promoting such events in a performance management suite’s social intranet.

Anne Brafford and Richard Ryan sum up how significant this approach can be in their Harvard Business Review article, 3 Ways to Motivate Your Team Through an Extended Crisis, discussing the concept of relatedness:

  • Acknowledge and validate your employees’ emotions as well as their reactions.
  • Don’t let people get lost in the crowd: Reduce team size and acknowledge each member’s work and achievements to the extent possible.
  • When problems arise, make sure to get full feedback from those involved.
  • Emphasize that people’s contributions are unique and necessary; do not let good work go unacknowledged.
  • Communicate that you care about employees’ well-being, not just their productivity.

Creating networks of human talent and technology through superteams

Deloitte’s 2021 Global Human Capital Trends study explores the role superteams are beginning to play in a business landscape increasingly dominated by machine learning and artificial intelligence:

“Superteams can give organizations the opportunity to re-architect work in more human ways, leveraging technology to elevate teams’ ability to learn, create, and perform in new ways to achieve better outcomes.”

Through the use of performance management tools, business leaders and managers can better leverage the ability for employees to contribute to better outcomes for the organization by implementing new technologies which assist with upskilling, reskilling and delivering growth and resilience. AI brings an additional layer of “thinking” to the mix, and this intersection of human and AI predictive modeling provides individuals and teams with the means and the motivation to create new knowledge and form deeper insights.

Aligning employee growth with business goals and shared values

“When people are financially invested, they want a return. When people are emotionally invested, they want to contribute.” ~ Simon Sinek, author of Start With Why

In his seminal 1953 essay, The Hedgehog and the Fox, Isaiah Berlin outlined the distinction between those who are fascinated by the infinite variety of things, and those who are interested in one central, all-encompassing idea. Several decades later, American business consultant and author of Good To Great adapted core aspects of these principles into the Hedgehog Concept.

This strategy is built around three fundamental questions:

  • What are you deeply passionate about?
  • What drives your economic engine?
  • What can you be the best in the world at?

HR managers and leaders who can help employees answer these fundamental questions will bring them into alignment with the company’s broader vision, through a keener understanding of what they can be the best at and how this can drive business goals. As Jim Collins explains, the glue that binds these three fundamental questions together is big, audacious goals which never lose focus of the potential answers to these questions.

Gathering and sharing data to boost confidence in transparency and accountability

The expression “data is king” is a well-worn phrase in the business world for good reason: data provides business leaders and managers with the necessary insight to tackle problems in the most efficient manner while also spotting potential issues before they cause disruption. Data can also help guide employee-related decisions, allowing managers to pinpoint where an employee went wrong and offer the best corrective course of action.

This data can also be used to give employees better transparency into how and why decisions are being made, so that they understand their roles in regards to future goals and are given the same degree of oversight as to why specific decisions have been made.

Managers and HR leaders can use performance management tools’ dashboards and reporting to filter through the data and analytics to generate custom reports. These reports help to monitor individual and team performance, and this information can be shared with employees when discussing progress in regular one-2-ones and check-ins, as well as add clarity during performance reviews.