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Performance Management in The UK: Challenges and Best Practices

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Performance management is one of the most debated topics in all of talent management. This is particularly true in the United Kingdom, where recent geo-political events have combined with several other factors (i.e., the COVID-19 pandemic, the Great Resignation and unique British professional and social norms) to make it exceedingly difficult to implement effective performance management processes.

As we are not fortune tellers, it’s pretty challenging to predict how talent management in the UK will evolve over the next two to five years. However, we can suggest a number of performance management best practices that will assist UK-based organizations as they look to tackle Britain’s current obstacles when it comes to performance management. If there’s anything we have learned in the last two years, it’s that tough times are nothing but an opportunity to take a pause, have a think and turn adversity into a learning experience – one that positions your organization for the better.

In this article, we will take a look at each and every one of the different factors that are impeding performance management in the UK. Whether external or internal, we’ll provide tips and guidance for organizations to tackle today’s most prominent challenges, implement best practices and take their performance management to the next level.

Performance Management Challenges in The UK

Before we jump into the latest trends in performance management, we first need to fully understand the current challenges that UK employers face in making their performance review process an effective one. On the bright side, and as a sort of spoiler alert, we can assure you none of them is impossible to overcome.

The Cultural Clash with Self-evaluations

Among many other things, performance management involves a process in which employees and managers get together and review past objectives, discuss different ongoing projects and set a bar for future reviews. This is the moment when employees need to provide superiors with an honest evaluation of their performance, particularly when they have met or failed to meet their quarterly or yearly goals. This brings us to the element of self-evaluations.

Self-evaluations require a strong determination from employees to accept responsibility for both their achievements and shortfalls. And for a characteristically polite and more reserved culture in the UK, this could be a problem. Where US-based employees may not feel ashamed of highlighting their successes, Brits may feel like it’s blowing one’s own trumpet.

As politically correct as it may sound to let others – especially managers or team leaders – speak about an employee’s achievements, this is not the best approach for performance reviews. A thorough self-assessment can help employees feel more engaged in the appraisal process as they gain confidence and insights while setting goals for the future. This cultural element dampens the performance management process in the UK, eliminating a crucial tool for critical reflection and skill development.

Post-Brexit Employment Regulations

Brexit has brought numerous changes in various senses to the UK, both professionally and socially. And, when we narrow our scope to HR, the impact has been significant. Anyone can check online to see how to comply with all current regulations. But, in short, UK employers need to follow certain criteria as regards salaries, education, job level and visa duration in the British territory when hiring non-UK employees.

Now, how do Brexit regulations affect performance management processes?

At first glance, there’s no reason why recruiting limitations should negatively impact a talent management initiative. However, if we dig a little deeper, we’ll notice that they also trigger a talent loss for organizations. In other words, foreign employees who don’t comply with these regulations and/or can’t (or don’t want to) apply for permanent residency need to leave.

This talent exodus has exacerbated skills gaps that the current workforce needs to cover until a local (or Brexit-compliant) fit is sourced, engaged and trained to fill the void. What can you expect of a performance management process that evaluates employees doing their best to cover a skills gap they were not properly trained for? Inaccurate feedback that negatively impacts employee experience by generating a sense of frustration and, eventually, affecting salaries.

Current Performance Management Techniques in the UK

In the words of Nietzche, the German philosopher, “the worst enemy you can meet will always be yourself.” And this is certainly the case for many talent management teams in the UK. One of the biggest challenges they need to address is their current performance management techniques. More specifically, their traditionalist style.

One may then ask “what’s the problem with keeping a traditionalist style?”

This methodology tends to rely on annual appraisals that focus on past objectives that were set a long time prior to the performance conversation and, more often than not, become less important or even obsolete when the time to review arrives. According to pre-pandemic research, over 70 percent of UK employers claimed to be using annual appraisals.

In comparison to modern approaches that champion regular performance conversations that promote continuous development, traditionalist methodologies can leave employees feeling dissatisfied with the entire performance management process.

With 49 percent of UK employees not having regular performance conversations with their managers, organizations should rethink their methodologies in order to reap the benefits of the modern approach to performance management.

Performance Management Best Practices to Tackle UK Challenges

Performance management is in a constant state of evolution, not only with respect to its techniques and methodologies but also towards its aim.

Performance reviews are shifting to an employee-centered model, with engagement and productivity as core tenets. Now is the moment for organizations to prove how effective performance management is in empowering employees. Thus, UK employers need to adapt to an agile framework that improves the employee experience as a whole, where value and professional development can take place.

Still, we’re not here to state what future performance management processes should be like, but how UK organizations can achieve effectiveness in their reviews and fully address the challenges stated above.

1. Peer Feedback: Compensate for Cultural Challenges towards Self-evaluation

One of the latest performance management trends is incorporating feedback from more than one source.

By incorporating peer feedback, employers not only maximize their source of information as regards employee performance but also open the door to unlocking hidden talent. Given the previously discussed cultural uniqueness of the UK, valuable skills may remain in the dark without employees providing useful and honest evaluations with respect to what it was like to work with a colleague in a given project or how they contributed to achieving a goal.

While there are various ways to lead and implement this socially based performance management best practice, all of them hold the same truth: it works. Remote work has decreased the amount of manager-employee interactions, and solely relying on managerial feedback is not viable. The digital era has increased the need for teamwork, and employers nowadays relate more often with co-workers than superiors.

2. A Holistic Approach to Performance Management

Siloed talent management processes limit agility. In fact, they may even impact employee experience negatively, turning talent retention into a bigger challenge. The current shift in performance management models calls for coordination among various talent management initiatives, where you can get valuable information from one and implement it into another.

Let’s take, for example, the talent loss difficulties UK employers are facing due to Brexit. Organizations need to cover open roles and responsibilities that require specific skill sets. In a holistic framework, where talent management initiatives are connected to each other, managers can find, propose and follow up on development plans during a performance review, discovering hidden interests and developing new skills. This approach works toward improving the employee experience and productivity, unlocking hidden talent and maximizing the effectiveness of all initiatives by finding relevant relations between one another.

Moreover, unified talent management initiatives help avoid confusion or misinformation as regards one crucial element in this increasing digital work environment – data, which plays a major role when implementing a holistic approach.

The best way for organizations to leverage data is to activate all of their talent management initiatives under the same platform. In this way, it becomes the stone that kills both birds. On the one hand, HR professionals and managers get a better insight into the information they collect from the different touchpoints of the employee journey and can implement it to increase retention (one of the most important current goals). On the other, they maximize the effectiveness of their performance management processes not only by enhancing productivity but also by empowering their workforce to develop professionally within the organization.

3. Continuous Performance Management

One of the most crucial best practices in modern performance management initiatives is implementing continuous reviews. Once again, with the inevitable evolution of quarterly and yearly goals, annual appraisals lose ground, impact and effectiveness. By implementing ongoing feedback, employers give place to a shift in employee appraisal philosophy.

Continuous performance management doesn’t change the performance review basics. However, small adjustments occur when regular check-ups take place. Managers are still in charge of reviewing past objectives while also decreasing the risk of them becoming obsolete by applying necessary changes in the shape of follow-ups. This approach broadens the scope of an employee performance review by implementing a forward-looking evaluation.

By adapting to a continuous performance management approach, managers improve the awareness of the skill sets among their workforce. Through 1-on-1 talks, leaders can better understand the desires and interests employees have, review past and future goal-setting and implement feedback in a more consistent way, meeting both organizational and personal objectives at the same time.

Case Studies in Effective Performance Management

Having a detailed guide with best practices to apply to your talent management initiatives is fantastic. But, in order to really grasp how performance management processes can become more effective within your organization, there’s still a need for practical examples. In the examples provided below, you’ll see how organizations from different industries have adapted their performance management techniques with the help of agile technology.

Generac’s Holistic Approach to Performance Management

A producer of best-in-class home standby generator systems, Generac is consistently regarded as one of the best places to work among top American manufacturers. But despite this accolade, the talent team wanted to improve employee experience by taking it to the next level.

To accomplish this goal, Generac leveraged agile technology provided by Avature to unify their company-wide talent management initiatives. They were looking for a holistic approach to harness valuable data collected in the various touchpoints of the employee journey throughout their core pillars: career and professional development, performance management and succession planning.

By consolidating all employee-related information into one platform, Generac achieved a time-saving performance management process that not only allows agile setting and shifting goals in times of constant change. Their holistic approach also involves ongoing feedback techniques that provide useful data to other talent management initiatives within the organization.

Pontoon’s Shift to Agile Performance Management

A leading global workforce solutions provider, Pontoon addresses the talent needs of top worldwide partners. But, besides providing solutions as a service, they also take care of their own workforce and seek different ways to improve their talent management initiatives to improve engagement.

As they evaluated their internal performance management processes, the Pontoon team realized that they needed change. With one of their top priorities set to enhance transparency and trust in their strategy, they also chose

Avature Performance Management to:

  • Give autonomy to their employees with an agile, goal-driven approach.
  • Implement continuous performance management with future-oriented check-ins.
  • Collect valuable data that would help them achieve ongoing improvements.
  • Measure the impact of performance management within their company.

After implementing a strategy that covered their goals and needs, the outcome for Pontoon was positive in numerous ways as regards their performance management process. Firstly, they were able to provide goal-setting autonomy to employees. Secondly, they achieved a way to acknowledge their employees, which boosted engagement. And last but not least, their easy-to-follow intuitive tool provided timely and effective feedback, with a major focus on growth and development of their workforce.

What’s Next?

Finding the best performance management software out there to deliver a tailored experience that meets organizational and personal goals will take a performance review strategy to the next level. And, as we know each organization has its own scope and core values, the best strategies may differ. However, with the right agile technology, organizations can then unlock hidden talent, provide development opportunities and collect (and implement) valuable data in a time-effective way.

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