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Performance Management

Learning and Performance Management Can’t Be Separated Any Longer—Here’s How You Link Them

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Modern performance management is just as much about your employee’s career development as it is about business performance. But historically, the traditional performance management process has focused more on performance appraisals that aren’t linked to development pathways.

Organisations need to link performance management and learning in order to drive real organisational transformation and meaningful career progression for employees. But how do you actually build that link? Let’s dive in to how you can align learning and performance to build an effective performance management process.

Why link learning and performance management? 

Linking learning and performance management is the first step in creating a cohesive and effective employee development strategy. Learning and development (L&D) is useless if it doesn’t actually drive performance uplift, just as performance management is pointless if it doesn’t lead to actionable development plans for employees. When businesses link learning and performance management they enable their employees to master the capabilities they need to make a business impact.

Why is it important to link learning and performance management?

The traditional performance management process struggles to bridge the gap between performance reviews and employee improvement. That means performance management exists without rhyme or reason, because it has no greater impact on the business at any level. Bridging that gap isn’t quite as hard as you might think. It’s a matter of capability development.

Capabilities are the mix of personal and technical skills, knowledge, behaviours, processes and tools that combine to deliver on business objectives. The more employees develop their assigned capabilities, the better your business performs. Why? Because employee development is about improving performance markers you’ve defined as necessary to your business strategy.

In other words: Learning leads to capability building, and capability building leads to performance improvement.

When you focus on capability development, you’ll see a few significant impacts.

  1. Alignment with organisational goals, as capabilities are derived from business strategy and feed back into business goals.
  2. All the moving parts of your business (individual employees, teams, leaders, and stakeholders) will be on the same page when it comes to performance expectations and development.
  3. Ongoing organisational transformation through a sustainable and agile workforce and business that can adapt to challenges and take pre-emptive measures against risks.
  4. Personalised development plans, which improve employee retention and increase employee engagement. 94% of employees say they’d stay with an employer longer if their career development was prioritised. A personalised development plan their specific role-based capabilities, allowing them to contribute more value to the company.
  5. Better quality performance data, which enable HR and L&D professionals to gather valuable insights and allocate resources as optimally as possible. Performance data can reveal trends, learning effectiveness and training ROI, allowing informed decision-making when it comes to development opportunities and budgeting.
  6. Better talent development and recruitment, as effective performance management forms the basis of in-depth job scorecards to be used in targeted employee performance plans and job descriptions. This enables businesses to recruit, retain, and develop the right talent for the job and create a healthy talent pipeline.

How to align learning and performance

Aligning performance with learning is fairly straightforward. The hard part can be making the case for it internally, especially if you’re working with legacy L&D systems and processes.

We’ve identified three crucial best practices to link learning and performance.

  1. Defining learning and performance objectives
  2. Aligning learning with performance data
  3. Leveraging technology.

Define learning and performance objectives

The first step is aligning your goals for learning and performance with your business mission, vision, and values. Start by identifying optimal workforce capabilities, because these are the capabilities your employees will need to develop and master in order to meet performance goals and achieve business objectives. Think:

Just remember that defining the end goal is only the beginning. What will actually get you there are clear metrics for success that make the journey to the destination measurable and achievable. Anyone can set a goal to hit the gym and get fit, but it won’t happen unless you set smaller goals to measure your progress.

How this helps

Employees need to see the value in what they do to perform at their best, and we don’t just mean from an engagement standpoint. No one wants to put effort into a job that doesn’t contribute any meaningful value to the business as a whole. Clearly defined performance expectations and goals counter this, providing employees with a clear direction.

Align learning and performance data

In a nutshell: embed learning in performance management. Traditional performance management judges your performance at the end of the review period. Relevant learning and development might be provided afterwards.

On the other hand, embedded performance management delivers performance appraisals in the form of continuous feedback throughout the year rather than after the fact. This doesn’t mean you can’t have any formal performance reviews anymore (in fact, we expect you will) but formal annual or quarterly reviews can’t be the only form of feedback your employees receive.

When you embed performance management and learning, you’re also leveraging performance data (like key performance indicators, ROI, and learning outcomes) to ensure the right employees get the right development opportunities. Look at it this way: You don’t know what learning to provide unless you’re leveraging performance data effectively.

Take a capability gap analysis, for example. It measures which capabilities your employees are proficient in on a levelled scale of competence. High competency = exceeding expectations, and low competency = employees need to develop their capabilities further. You can use this information to assign targeted learning that will actually make an impact by developing the capabilities they’re weak in and improving their competence.

How this helps

So what are the real benefits of embedding performance management with the learning process?

Leverage technology

A lot of organisations still handle their performance and learning management manually. Other organisations use independent learning technology—i.e. a separate performance management system from their learning management system. We get it. That’s how it’s always been, and so that’s how it will continue to be. But what if we told you it could be easier?

We developed the performance learning management system (PLMS) for this reason. A performance learning management system is the only learning management technology that actually links learning and performance together in the same system. It ensures that all your learning is designed and targeted towards specific development needs for the explicit purpose of improving performance. This means identifying and assigning capabilities, matching learners with tailored training, and progress tracking to help with course management efforts.

How this helps

A PLMS automates the process of identifying capabilities, assigning learning content, and tracking learning and performance progression. It links the right learning to the right learners to ensure that employees can master the business and role-based capabilities necessary for them to perform their roles and drive value for the company. Plus, automation reduces the chance for human error and bias to enter the picture.

The impact of siloed learning and performance management 

To start, you’re just going to see that gap between performance reviews and actual performance improvement get even wider.

Again, capabilities are the powerhouse of learning management and performance management. If learning and performance aren’t in conversation with each other then they’re both misaligned from organisational goals—all because capabilities aren’t being developed and business priorities aren’t being met. So, you won’t have a way to track progress towards goals and managers won’t be able to carry out objective performance reviews, because they won’t actually know what criteria and KPIs they need to measure employee performance against. Which means:

In summary: Learning is useless if you can’t measure how it impacts performance, and performance management is useless if you can’t utilise performance reviews to assign tailored learning content. When these two aspects work separately from each other instead of in tandem, your organisational capabilities aren’t being developed to drive business success.

Key takeaways 

Learning that doesn’t drive performance is useless, and performance management that doesn’t drive development is meaningless. You can’t have one without the other if you want either to be effective.

Linking learning and performance management together is the only way to ensure effective learning and development initiatives, and an uplift in company performance. You just need to remember three strategies to align learning and performance:

  1. Defining learning and performance objectives
  2. Aligning learning with performance data
  3. Leveraging technology.

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The Problem with Performance Review Bias is Systemic—Here’s What You Can Do About It

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For many employees, the performance appraisal is the much-dreaded event of any performance review process. But it really shouldn’t be.

Many employees find the performance cycle unfair and biased when it comes to evaluating individual performance. But biases aren’t just a result of recency bias or managers giving a higher rating to their favourite employees—it’s a systemic issue that enables bias to exist.

So what can you do about it? Without further ado, let’s jump into what performance review bias is and how you can mitigate it in your performance review process.

What is performance review bias?

Performance review bias is the unfair or subjective judgment of an individual’s job performance. Bias in performance evaluations affects the accuracy of performance reviews, which leads to unfair outcomes for employees as well as irrelevant development opportunities. Bias can manifest in various forms during the performance management process, and be influenced by factors like time, personal preferences, stereotypes, and even the performance management strategy itself.

There are multiple types of bias that affect the accuracy of performance reviews.

Why does bias persist in performance reviews?

Ask anyone: They hate the performance appraisal process, and for a multitude of reasons. Performance reviews feel impersonal, reduce them to a number, or focus on the past instead of future development. Even managers find them frustrating. Without an effective performance management system, they’re often recording and storing performance reviews manually—a time-consuming process that also prevents meaningful data insights.

And that’s not all. The subjective assessments that make up performance reviews open the performance review process to managers’ unconscious biases.

So why does bias in performance reviews continue? Look, we know it’s easy to blame human judgement, but truthfully, bias is a systemic issue brought about by the way traditional performance management is designed. Performance reviews are built to be “open-ended” so that managers have a generic performance review template to roll out organisation-wide—but that just paves the way for their own biases to creep in. And there are a lot of common biases that can affect performance reviews.

When it comes to performance appraisals, most of the time the bias is unconscious. But that doesn’t make the bias any less prevalent. This is why open-box questions are so bad for objectivity. It’s not that managers are actively deciding to include bias in their reviews—it’s that the open-ended question style of evaluation enables managers to draw answers from their perspectives (which are often biased) rather than objective truths that need to be backed up with data.

In other words, the real reason bias in performance reviews continues is that the performance review process is not built in a way that discourages bias from affecting ratings. If your performance management strategy doesn’t focus on setting clear measurable outcomes for employees from the outset, then performance management has already failed. Objective measures for raters to back up their evaluations with evidence, reducing the opportunity to inject their own implicit bias.

How to mitigate bias in performance reviews

Now that we’ve got the “open-ended = open to bias” bit out of the way, we can talk about how to actually stop that bias. We’ve found five strategies you can implement in your organisation to reduce bias:

  1. Establish clear evaluation criteria
  2. Provide continuous feedback
  3. Utilise multiple perspectives
  4. Provide unconscious bias training
  5. Promote DE&I.

Using a performance learning management system (PLMS) supports your performance management strategy. PLMSs combine the functionality of learning management with performance to reduce and erase the systemic issues within performance management and ensure employee development has a meaningful impact on business performance.

Establish clear evaluation criteria

First things first: Set evaluation criteria for your performance goals. Use your job scorecards to help you here. They’re derived from your business capabilities—i.e. the skills, knowledge, behaviours, tools, and processes that combine to deliver desired organisational outcomes. Your evaluation criteria will be the actions and behaviours that enable employees to perform their required capabilities and drive business impact.

It’s important to remember that setting goals is just the first step. Imagine you give yourself a New Year’s resolution to “get fit”. Okay, but how? You need to lay out the steps to actually getting fit—do you need a gym membership? How often are you going to work out? What workouts will you actually need to do? Your workout plan will need to be tailored to your abilities and goals, as well.

When it comes to capabilities, the best way to establish evaluation criteria is with competence. It’s the levelled scale that you can use to measure capabilities, where:

These criteria are essentially closing the open box (or at least “restricting” it). They keep evaluations focused on measurable benchmarks and minimise subjective interpretations, especially if you have multiple perspectives rating performance. They’ll form the basis of your performance evaluation questions.

Provide ongoing feedback

Picture this: Once per year, an employee on the sale team sits down with their manager and receives their performance appraisal—only this time, their manager says they haven’t been closing enough deals and have been consistently behind on KPIs for some time. Now the employee has to go on a performance improvement plan (PIP) to increase their performance.

The PIP could certainly address the performance issue, but wouldn’t it have been better to be more proactive about performance development? Once-a-year performance feedback is like slapping a plaster on a gaping wound—ineffective and not actually helping to heal the wound. But if you regularly provide feedback throughout the year (such as through coaching or just regular check-ins) then you’re more likely to catch and correct performance issues before they become a bigger problem.

This means embedding learning within performance management, and gives employees the chance to develop their capabilities throughout the performance period rather than waiting until an annual review to receive training.

This is particularly effective in mitigating bias based on recent performance, as well as horns and halo bias, because managers have to answer the specific performance evaluation questions set by your evaluation criteria.

Utilise different perspectives

The best way to ensure objective performance reviews? Encourage multi-rater feedback. Incorporate feedback from multiple sources, including feedback from direct reports, peers, and clients in performance evaluations. When you have diverse perspectives providing input it reduces the impact of any individual bias that may creep in.

When you’re rating performance, you’re rating how well employees are performing their role-based capabilities. You can use a capability assessments for this; they measure capability in levels of competence, indicating if capabilities need development, meet expectations, or exceed expectations.

There are different types of capability assessments that you can utilise here. We recommend using at least two types of assessments to ensure you get the most objective overview of actual performance and utilise that multi-rater feedback.

  1. Self-assessments. These are evaluations in which the employee reviews their own performance. Individuals have a fairly good grasp of what they can and can’t do, but at the same time, they can be biased about their own achievements—which introduces a whole other type of bias. It could be that they think they’re performing a task better than they actually are (this is especially prevalent if they don’t actually know what their performance expectations are), or that they’re not doing a good job when their performance is actually meeting expectations.
  2. Manager assessments. Managers have a better grasp of what business and performance objectives are, so they can better evaluate performance based on how it aligns with business goals. The only problem is that 51% of managers aren’t effective at assessing the performance of their direct reports, and that means reviews can still be inaccurate.
  3. Subject matter expert assessments are carried out by—you guessed it—subject matter experts. This is usually reserved for specialist capability sets like executive positions, to ensure that employees with those capabilities are meeting the higher standards demanded of them.

Provide unconscious bias training

Unconscious bias training raises awareness of the unconscious biases that can influence judgements made about other people’s talent or character, often based on race, gender, or sexual orientation. Its main purpose is to reduce bias in behaviours and attitudes in the workplace.

Unconscious bias training isn’t just about highlighting where the biases exist. That’s not enough. It also needs to teach participants how to manage their biases and change their behaviour. For bias training to be effective at this (because breaking down biases requires structural changes to operations and policies within the business) it can’t be a one-time activity. Organisations need to commit long-term to eliminate bias, otherwise training is just a means to ticking the box of compliance.

Promote diversity and inclusion

Diversity, equity and inclusion (DE&I) is crucial for strengthening organisations’ workforces and culture. At its core, it’s about creating an equal-opportunity workplace founded on meritocracy, so it benefits performance management in several ways. You need to build DE&I into your organisation’s culture—that starts with training, but training (especially one-off training) isn’t enough to make sure it sticks. You need to follow up regularly and consistently to ensure that DE&I learnings are implemented and actioned continuously throughout the workplace.

Diverse workforces bring together individuals with varied backgrounds, perspectives, and experiences, enriching the evaluation process. Using multiple viewpoints in performance reviews reduces the prevalence of bias and ensures more objective evaluations of employee contributions.

Plus, DE&I focuses on creating an inclusive culture, not just an inclusive workforce. This means gender bias, racial bias, and other biases against minority groups are reduced due to a culture built on inclusivity and diversity. It also means there will be more honest dialogue between employees and managers during performance evaluations, leading to more constructive feedback and meaningful discussions about strengths and opportunities for improvement. Targeted feedback gives employees the opportunity to work on improvement areas as well as makes them feel recognised and valued, which vague feedback does not inspire.

What happens if you don’t root out performance review bias?

Your need to have ongoing organisational transformation to drive sustainability and agility, otherwise your business will stumble behind its competitors. So if your performance management is riddled with performance review bias, you’re cutting your business off at the knees.

Key takeaways

Bias in performance reviews negatively impacts your business’s ability to gather accurate performance data which can help inform development opportunities and talent management decisions.

Just remember that biased performance appraisals aren’t a problem lying solely on the shoulders of managers. Rater bias is just a symptom of the real problem: Systemic bias in performance reviews. In other words, traditional performance management is set up in a way that invites bias, rather than reducing it.

But it’s not all doom and gloom. There are five strategies you can implement in your performance review process to mitigate the risk of bias creeping in:

  1. Establish clear evaluation criteria
  2. Provide continuous feedback
  3. Utilise multiple perspectives
  4. Provide unconscious bias training
  5. Promote DE&I.

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Performance Management

How to Set Leaders Up for Success with a Performance Management Framework

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If you’re having trouble with performance management, you’re not alone. Traditional performance management has acted more as a report card of past performance than an actual means to achieving strategic objectives.

Dwelling on the past with no tangible plan to learn from is pointless. Instead, organisations should lean into performance management frameworks that focus on progression for the business and its workforce.

Without further ado, let’s jump into how you can make a performance management framework to set your business up for success.

What is a performance management framework?

A performance management framework is a structured approach to managing and improving performance of individuals, teams, and businesses. It encompasses processes and activities that focus on setting performance goals, aligning employees with organisational goals, and supporting employee development to improve performance.

The importance of performance management frameworks

At its core, performance management is about enabling the workforce to drive business performance and success. The only problem is that traditional performance management (and the performance management systems it tends to use) don’t really enable that at all.

For starters, 1 in 3 North American employers say that their employees feel performance evaluation is rated unfairly. Less than half of employers agreed their managers were actually good at evaluating the performance of their direct reports.

On top of that, annual performance reviews are still just that: Annual. Employees only get feedback once a year, during which time bad performance might have become a business issue. Even then, “bad” performance might actually just be an example of recency bias or poorly designed development plans.

The only way to ensure that performance management is effective and without bias is by getting leadership and management buy-in. If leaders aren’t convinced in the importance of performance management, employees won’t be either. And if managers don’t see its importance, they aren’t going to put much effort into the performance management process, making annual reviews even more inaccurate.

Something needs to change. A strong performance management framework, paired with an effective performance management system can help you here. Or you can use a performance learning management system (PLMS), which links learning and performance and drives better business outcomes through strategic goal setting and development. When we talk about “better outcomes” we mean:

How do you create an effective performance management framework?

A good performance management framework is a progressive performance management system. Where traditional performance management uses the annual review to look at the past, a progressive performance management framework looks to the future.

There are three key elements of a progressive performance management framework:

  1. Regular and continuous feedback
  2. Flexible and business-aligned goals
  3. Driven by future outcomes.

Regular and continuous feedback

Imagine this: You’ve been working on the customer support team, and customers are happy with your help. But in your annual review, your manager tells you that you’ve been doing and saying the wrong things all along.

Frustrating, right? You’ve spent a whole year doing the wrong thing and no one told you otherwise, and customers have come to expect your brand of customer support. If someone had only mentioned the mistake earlier, you could have implemented corrective action.

This is why regular feedback—by linking performance with learning and development—is so crucial. It enables managers to provide feedback in the moment, so mistakes can be corrected in the moment. You can assign a coach or mentor to employees to create this feedback loop, or just have more regular check-ins (such as weekly one-on-ones) to distil feedback and enable career development for employees.

This isn’t to say that holding formal check-ins on an annual or quarterly basis should be removed entirely, but frequent feedback is the only way to ensure employee development is moving at the pace you need, rather than being a footnote in the employee life cycle.

Flexible, business-aligned goals

Progressive performance management is all about enabling incremental changes in employee behaviour to drive organisational transformation. The business environment is always undergoing changes in technology, processes, and standards, and organisational goals (as well as organisational capabilities) need to change in answer.

Performance expectations for employees will have to be changed to reflect these changes as well. In traditional performance management, goals are rigid, but progressive performance management focuses on goals aligned with current employee and business needs.

When you set goals, it’s best to follow a SMART approach—that is, ensure that they’re specific, measurable, achievable, relevant, and time-bound.

Goals should be collaborative between managers and employees. Progressive performance management looks at individual performance—i.e. the focus is on an individual employee’s performance and development in order to achieve goals. Employees and managers work together to create goals and pathways to performance improvement.

Future-driven

This is what puts the “progressive” in progressive performance management. In traditional performance management frameworks, performance reviews act like your school report in that they just rate your past performance. A progressive performance management framework looks to the future by identifying areas for improvement and providing learning opportunities to employees.

In fact, the driving principle of an effective performance management framework is to meet organisational goals through the continuous improvement of the workforce.

The best way to make sure you’re tracking towards continuous improvement is to do a capability gap analysis. The idea is to find the gap between where your capabilities are now and where your capabilities need to be in order to deliver desired outcomes in the future.

In individual employees, capability is measured in terms of competence, a levelled scale indicating how a capability is performed. In an ideal world, all employees will perform the capabilities necessary to carry out their jobs at a high level of competence. Where employees have a lower level of competence is where development opportunities arise.

Let’s go back to our customer service example. In this case, your manager has probably marked you with a low level of competence for communication, like “needs development”. So, your development plan should include tailored training to improve your communication capability until your competence improves.

This is a lot easier when you have the right tools and performance management software to facilitate employee development. A PLMS links learning and performance together in a single system, delivering tailored learning content to address gaps in employee performance.

The pitfalls of not having a performance management framework

Not having a performance management framework won’t just prevent performance improvement, it also wastes time and resources that your business can’t afford to waste.

Your business’s different departments won’t be working in tandem towards your business’s overall strategy—instead, they’ll try to meet their own goals, and that means your workforce is acting without direction and can’t drive organisational improvement.

It doesn’t help that you’ll also lose the ability to identify strengths, weaknesses, and areas for development in individual employee performance. At the business level, you end up with capability gaps that snowball into wider business problems. At the employee level, you get frustrated employees who aren’t receiving any learning and career development opportunities. Employees want those opportunities for improving performance, and without them, employee turnover increases.

It’s a bit of a vicious cycle, here. When talent leaves the company, that talent needs to be replaced. But recruitment is a lengthy process, so in the meantime your remaining employees will be picking up the slack, taking time away from their own work and potentially building resentment in your company culture. That, in turn, leads to even more employee turnover and lost productivity.

In other words: Performance management frameworks are the backbone of a healthy, sustainable workplace and talent pipeline. Without one, your business is essentially dead in the water, unable to facilitate continuous improvement or meet company goals.

Key takeaways

It’s essential to create an effective performance management framework in order to build an agile workforce. Traditional performance management has failed to bridge the gap between performance reviews and tangible development plans, which is why organisations should be using a progressive performance management framework instead.

If you want to create an effective performance management system, then you just need to include three key elements:

  1. Regular and continuous feedback
  2. Flexible and business-aligned goals
  3. Driven by future outcomes.

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Performance Management

What Most Organisations Get Wrong in the Performance Management Process

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Most of the time, organisations don’t bridge the gap between their annual performance reviews and actionable employee development.

Instead, they tell leaders to run irregular, once-in-a-blue-moon reviews throughout the year, and then leave employees in the deep end to figure out how to improve all on their own.

This isn’t helping anyone, from your employees to your business’s overall performance.

The problem is that performance management as-is is unable to drive performance success. The solution is a strong performance management process built to drive employee excellence above all else. So, let’s dive into how you can make the performance management cycle meaningful for your workforce.

What is the performance management process? 

The performance management process is a continuous and consistent set of activities used to measure the performance of employees and teams within an organization. The entire process of performance management focuses on setting clear performance goals, supporting employee development, and aligning individual performance with the business’s strategic goals.

The impact of effective performance management 

You want a strong workforce? You need a strong performance management process. Effective performance management doesn’t just bridge the gap between performance appraisals and employee development. It also plays a crucial role in driving organisational success and achieving business objectives.

The performance management process steps 

The performance management process isn’t necessarily difficult, but most organisations are doing it wrong. Performance management only works if you’re proactive about it, and if you aren’t being proactive, then you aren’t fighting to make a positive change.

Let’s break down the five steps to creating a proactive performance management cycle.

  1. The planning stage
  2. The monitoring stage
  3. The development stage
  4. The rating and rewarding stage
  5. The evaluation and re-evaluation stage.

1. The planning stage

The first step to any good development plan? Direction. The planning stage is all about defining two key elements that will act as your north star for the entire performance management process.

  1. Goal setting: Set organisational goals for greater business context, as well as employee goals for individuals’ performance. This way, all parties involved in the process are on the same page. This comes in handy for activities like succession planning because you can ensure employees meet the performance requirements necessary to advance.
  2. Success metrics: This will be how your goals are going to be measured and achieved, with key performance indicators (KPIs). Say your goal is to increase customer satisfaction scores—your success metrics for this goal will include an increased Net Promotor Score (NPS), as well as steps to actually achieve the goal (e.g. maybe you want to decrease the time it takes to answer and solve customer queries).

The most important thing to remember when you set goals is that they need to be actionable. Don’t be vague. Don’t decide on your main outcome and then think “I’ll work out how to achieve that later”. You need to have clear expectations from the start of where you want to go and how you’ll get there.

In other words, all your goals have to be SMART goals. That is, they all have to be specific, measurable, achievable, relevant, and time-bound. It’s the best way to ensure that your goals can be feasibly met from the get-go.

And don’t forget what we said about organisational goals providing greater business context. The whole point of performance management is to ensure your workforce is equipped to deliver on business strategy. In other words, your goals should be about meeting your business capabilities (capabilities being the mix of skills, knowledge, behaviours, processes, and tools that deliver on organisational outcomes).

You need your employee goals to align with business priorities. That way, each goal completion brings your organisation another step closer to achieving its mission.

2. The monitoring stage

This is also known as the feedback stage because this is the part where you’ll be tracking goals and giving feedback on your employees’ progress. Feedback should be delivered with regular check-ins. If you set your SMART goals properly in the planning stage, you’ll have no problem tracking your goals based on your set KPIs.

Let’s go back to increasing customer satisfaction scores as a goal. Maybe the roadmap to achieving that goal involves reducing the response time to customer support tickets by 50% and improving your communication with customers to resolve tickets as quickly as possible.

Perhaps a member of the customer support team is quick to respond to tickets, but you’ve noticed they have a lot of back-and-forth with customers leading to tickets taking a long time to be solved. You could wait until a yearly performance review to bring this up, or you could provide feedback in the moment as a form of on-the-job teaching. Think of it as coaching or mentoring.

You’ll notice we’re talking about ongoing feedback throughout the year rather than one annual review at the end of the performance management cycle. A one-off review isn’t meaningful to employees or managers, because it’s just an opportunity to look at problems that have festered, rather than an opportunity for development. So, you need to have frequent check-ins for feedback with employees and embed performance management with learning to ensure employees are getting the opportunities and resources to improve.

3. The development stage

This is the part where most companies fail in their performance management process. Too often, they don’t get valuable insights from performance reviews—especially when reviews are done annually. Add to that, only 1 in 3 North American employers say their employees feel fairly evaluated in performance reviews.

It’s also not enough for employees to receive feedback and then go off to improve performance on their own. If your business isn’t investing in employees’ development, then you’re investing in underperformance.

Now that you’ve monitored employee performance, you can use that data to create development plans tailored to individual employees’ capability needs. If your customer support team member is still struggling with efficient communication with customers, their employee development plan should reflect that. (Remember that communication isn’t the capability here, it’s just one necessary element of increasing customer satisfaction.)

Performance management tools such as a performance learning management system (PLMS) can help you keep track of both learning and performance in one centralised location. PLMSs facilitate meaningful performance conversations that connect to relevant learning. The system identifies where employees have room for improvement and delivers tailored learning to drive them towards desired performance outcomes.

4. The rating and rewarding stage

At this point you’ve been tracking goal progression, but now it’s time to actually rate performance. When we talk about rating performance, we mean rating capabilities.

Capabilities are the outcomes you want—in our example, increased customer satisfaction is the desired outcome. Capability assessments use competence, the levelled scale that capability performance is measured against. The number of levels of competence you have are up to you, as long as they measure from a beginner level (where capability performance still requires development) to an advanced level (where capability performance is tracking towards continuous improvement).

And don’t forget to recognising and rewarding employees for good performance, either. We know it seems small in the wider picture of business performance, but employee engagement is crucial for productivity and employee retention. At the very least, recognition should be verbal so that your employees know their contributions have been noticed and appreciated, but ideally, you want to go further than that. Think:

5. The evaluation and re-evaluation stage

No, you can’t just pat yourself on the back for implementing a performance management process and leave it at that. Yes, performance management has to be a regular and continuous activity. But the final stage of effective performance management is making sure the process itself is actually working.

And we don’t just mean consistently re-evaluating whether performance management is happening in terms of feedback provided, development plans, assigned, and the like. We mean actually working out if the performance management process was actually successful in improving your workforce’s performance.

The easiest way to find this is by analysing your training ROI or performing a training needs analysis to identify where development still needs to be done. If the performance management process hasn’t seen an improvement in performance, then you need to re-evaluate the process as a whole to make it more effective going into the future.

The pitfalls of poor processes 

If you fail to plan impactful performance management programs, then you’ve planned to fail.

The biggest issue is that performance conversations are really little more than hot air—they don’t result in any tangible, actionable outcomes to improve an employee’s job performance or meet company goals.

But poor performance management processes can lead to other business risks. Failure to plan any employee goals? Or employee goals don’t align with organisational outcomes? Your employees will lack direction, and might even prioritise tasks that aren’t relevant to the business’s strategic objectives. It also means resources might be inefficiently allocated, preventing the organisation from achieving its goals.

And, if your processes fail to adequately address performance issues? Other team members will have to pick up the slack. Not only does that take away from their own work, but it creates hostility and resentment within teams. Bad team dynamics are the morale-killer. It will break down employee engagement and productivity, and drive talent turnover. Simple as that.

If you skimp on employee recognition for their performance achievements? That’s right: Higher turnover. Undervalued and unsupported employees don’t want to stick around—they’ll seek new opportunities elsewhere, and that can cost organizations an average of $4,700 to hire replacement talent.

And it’s not just employees who suffer under badly handled performance management. If your workforce isn’t getting the development and training they need, they aren’t going to be able to deliver on projects—and that means your clients, customers, and stakeholders won’t be pleased. At best, customers will just be dissatisfied, but at worst, they’ll take their business elsewhere. You don’t want a half-baked performance management process to be the reason your company has a bad reputation and customer satisfaction score.

Key takeaways

Continuous performance management is the key to business success, but it’s where a lot of organisations fall flat. The antidote to placing importance on performance reviews over performance development is a strong performance management process. Done right, your workforce gets the resources it needs to improve and meet business objectives. Luckily, an effective performance management process only requires five simple steps.

  1. Plan out your goals and KPIs for performance management ahead of time
  2. Monitor and provide feedback on employee performance
  3. Deliver tailored development plans based on employee needs
  4. Rate, reward, and recognise good employee performance
  5. Make performance management an ongoing and ever-improving process.

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Performance Management

Why Performance Management Fails—And What You Can Do About It

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Performance reviews, performance appraisals, performance evaluations—they all fall under the ongoing process known as performance management. There’s just one problem, though: Effective performance management is hard to do.

We don’t just mean making it a continuous process (although that’s definitely part of the problem). We mean it’s hard for managers and employees alike to give and receive feedback on employee performance, not to mention turning that annual review into an actionable plan.

So without further ado, let’s jump into why performance management fails and what you can do to make it a success.

What is performance management?

Performance management is a crucial aspect of any organisation’s success strategy, encompassing the processes and activities designed to evaluate employees’ work and align their efforts with the business’s overall strategic objectives. At its core, performance management aims to create a culture of continuous improvement within the workforce to enable organisational transformation.

How traditional performance management has failed

We know what you’re thinking: “But we need performance reviews!” In return, we’ll say just because you’ve always followed the traditional performance management process doesn’t mean it’s actually working.

In Gartner’s 2019 Performance Management Benchmarking Survey, 82% of HR leaders said that performance management wasn’t successful or effective in achieving its primary goals, with only 38% saying that performance management kept pace with organisational needs.

So what’s actually causing performance management to fail?

For starters: Annual reviews—specifically, the annual part of that equation. These are common practice in traditional performance management, but the problem is that infrequent reviews prevent employees from receiving constructive feedback when it’s needed. The time to start addressing performance issues was when those issues began, not after they’ve festered. Infrequent reviews just make all your performance conversations moot because there are no actions or takeaways for employees or managers.

Instead, all employees hear is “By the way, you didn’t meet performance expectations. Try to meet them next time, somehow.”

Which leads us to the next problem: Traditional performance management systems focus on ratings, not development. Employees feel their efforts are reduced to little more than a number rating—which is only good for evaluating past performance. What employees want are pathways to future success. Without it, they’re only getting more and more disengaged and unmotivated.

It doesn’t help that the general perception is that performance reviews are entirely subjective. Given traditional performance management processes involve a lot of human judgement, there’s plenty of room for unconscious bias to sneak into annual performance reviews (e.g., maybe managers are influenced by recent events, or favour some employees over others). What you need are tangible metrics to measure performance against which can also be translated into actionable outcomes.

How to build a strong performance management strategy

A weak performance management strategy equals a weak workforce. The only solution is building a performance management strategy that fosters a culture of accountability, continuous improvement, and employee engagement within your organisation. And it’s not hard to do it, either.

1. Define clear strategic objectives and goals

The first step to ensuring your workforce meets performance expectations and strategic goals is to outline what your organisation’s strategic goals actually are. Only then can you create performance goals for your employees to meet. That’s because employee performance goals should be aligned with your company’s mission, vision, and strategic objectives, ensuring that the organisation moves forward every time performance goals are met.

Effective communication here is key. Goal-setting decision-makers need to convey objectives and the HR context they exist within to employees and managers alike. Employees don’t like mindlessly doing activities they were told to do—they want to know why they should be doing it and what they have on the business. Only then will they understand the importance of their performance goals to overall business strategy.

Let’s say your business’s goals include improving its customer service scores like its Net Promoter Score (NPS). A relevant performance goal for a member of your customer service team might be to increase the number of customer support tickets they solve by 25%, or reduce the response time on tickets by 50%. If these performance goals are met, the assumption is you’re more likely to satisfy customers and build a reputation for good customer service.

But suppose you don’t have transparent communication at this stage. Your entire performance management program will be thrown off by different teams performing to different standards (which may not even drive organisational success). When you have a transparent workplace, everyone is on the same page, leading to increased employee engagement, better employee performance, and achieving company goals.

And one more thing: Organisational objectives may change over time, so you need to make performance management a continuous process. Adjust your employees’ performance expectations in line with organisational goals, because what constitutes “good” performance today may not be relevant in a year’s time.

2. Set standards, criteria, and indicators

Now take all those goals you set and break them down into the key performance indicators (KPIs) that are specific, achievable, and relevant to each role and department. This is a two-step process of:

  1. Establishing criteria for evaluation (such as productivity, work quality, or teamwork), which you’ll use to evaluate employee performance against established standards.
  2. Developing performance indicators, or capabilities (the combined skills, behaviours, processes, tools and knowledge that deliver organisational outcomes) which are quantifiable metrics providing objective measures of how your employees are performing. Your capabilities will be measured in terms of competency or proficiency, with the lowest level of competence indicating a need for development, and the highest level of competence indicating performance exceeds expectations.

You can use HR technology such as a performance management system to help keep track of your performance goals as well as employee performance. Not only will it do away with the time-consuming process of manual tracking, but so too will it ensure you’re measuring an employee’s job performance on purely objective metrics, helping to eliminate implicit bias that may be happening.

We recommend using a performance learning management system (PLMS). A PLMS ties effective performance management with meaningful learning in order to improve performance and positively impact organisational outcomes.

3. Regular feedback

We’ve established annual reviews don’t make for an impactful or meaningful performance management process. What you should be doing instead of the once-a-year, irregular reviews are ongoing, honest discussions.

Ongoing feedback means corrective measures can be communicated and implemented in the moment, giving employees the chance to perform better in their roles straight away, rather than waiting for the next annual review. Embedding performance management with learning and development is essential here. When learning and performance happen in tandem (e.g., a feedback loop between managers and employees) you mitigate problems with performance before they become a business issue.

Not sure how to embed learning with performance? Provide your employees with training and resources to help them understand and meet performance standards. For example:

This creates a continuous performance management process, ensuring that performance management is embedded in your employees’ development and day-to-day work. Again, learning and performance management tools such as PLMSs are especially useful here in providing employees with the right learning content to develop their skills and capabilities in the right direction.

And don’t just give constructive feedback, either. Recognise and reward your employees for their achievements. Employee recognition acts as positive reinforcement for desired behaviours and makes your employees feel valued for their work—a factor which improves employee retention. Think along the lines of bonuses, promotions, or additional responsibilities as a way to provide tangible incentives for high performance.

4. Ongoing evaluation

The key to a strong performance management strategy is to make it an ongoing process, because a one-and-done performance review isn’t going to drive continuous business success.

Ensure that you regularly revisit your organisational goals, as your business needs and the capabilities your workforce needs to meet those needs will change over time in line with industry and technological change. Capabilities and the competencies they’re measured by are the bedrock of organisational and employee performance, which means your performance goals, metrics and indicators will have to change to reflect those changes.

Continuous performance management isn’t just about repeating the performance management process, either. Making performance management a recurring activity means nothing if your performance management program isn’t effective. So, you need feedback from employees, managers, and stakeholders to identify areas for improvement and innovation in your performance management process which you can use to refine your strategy.

The impact of poor performance management

Getting performance management right is critical for organisational success. If you fail at performance management, then you’re essentially failing at business—and that effects both your bottom line and everyone in your workforce.

Key takeaways

Performance management is a crucial aspect of creating a sustainable and agile workforce, but organisations often find it difficult to conduct performance management activities that are impactful. But if you want a strong workforce, you need a strong performance management strategy—and luckily there are only four critical elements to building a strong process.

  1. Define clear business goals and objectives
  2. Set standards, metrics, and indicators to measure performance against
  3. Provide employees with regular feedback
  4. Continuously evaluate your performance management process.

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Building Capability

How to Enable Job Mastery with Competency-Based Performance Appraisal Systems

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Most performance appraisal systems exist separately to learning and development. We believe they are interconnected, part of a self-sufficient performance cycle. 

In this guide, we’ll talk about how you can get the most out of your performance appraisal system with a competency-based approach, the business case to make for smarter learning tech, and where you may be going wrong. Let’s dive in. 

How to get the most out of your performance appraisal system

The performance appraisal system is a solution that manages and runs your (you guessed it) performance appraisal process. Most are set up to execute performance reviews and performance reviews only, but this is where we diverge from that path. 

In our experience, performance appraisals work best as part of a greater performance management ecosystem, rather than being core to it. Ergo, getting the most out of the system you choose means understanding the most effective process for performance management. 

From our perspective, that is: 

  1. Defining core competencies for appraisal 
  2. Setting performance goals for development plans 
  3. Designing tailored training and development 
  4. Measuring progress to performance goals 
  5. Providing and gathering feedback for continuous improvement. 

1. Define competencies 

Competencies refer to the performance standards attached to a job role. They are used as a way to evaluate the performance of business and human capabilities, aka the skills, knowledge, processes, behaviours, tools, and systems that combine to achieve business objectives. 

The competencies that are key to each job role are then dependent on the capabilities of the role. For ease of use, it’s best to display these in a framework like so. 

Infographic demonstrating how a capability is broken down into competencies and performance indicators

A competency framework gives employees—i.e the people whose performance we’re measuring—a clear idea of performance outcomes and indicators. It also gives managers and other stakeholders a benchmark for evaluation, negating potential subjectivity bias. The best point in time to define competency is generally when designing a job role and its scorecard, as it allows you to understand the level at which that role performs. 

What we mean by that is competency is a scale or spectrum. It can be categorised by hierarchy (i.e. team member, team leader, executive) or by schema similar to assessment grading (beginner, intermediate, advanced). If one capability has three levels of performance at which it can be performed, that enables you to apply a capability to multiple roles with clear differentiations in expectations. 

If you’re facing a deluge of job roles to break down, we have a capability library with over 600 capabilities and 1600+ levels of competency you can download, edit, and repurpose as needed. We recommend you reword anything you copy into your organisation’s internal language so: 

  1. Performance expectations can be clearly communicated to all employees, across teams, functions, and locations; and 
  2. All employees can see how their roles contribute to success and how their performance will be assessed. 

If it’s not a crystal clear path to follow, go back to the drawing board. 

2. Set performance goals for development plans 

There’s little connection between training and learner. We’ve seen it many times over; vendors push libraries of third-party content. Learners are then expected to wade through to find the one training needle in the content haystack. The assumption is that not only will they manage to find content that impacts their performance, but that they’ll want to do it. 

We want to connect learning and performance at this, the turning point for the learner. Performance goals offer two distinct advantages. 

  1. They show in no uncertain terms that the purpose of training is. 
  2. They allow you to create tailored training initiatives. 

It starts with a competency assessment. This is where most appraisal systems kick off; you can use our very own workflow automation tool Momentum to book these in. Where Momentum differs from the pack is that it lives in our performance learning management system (PLMS), Acorn. It flows a little like this: 

  1. You set a trigger for an assessment (either at a certain frequency or because of a performance conversation). 
  2. Momentum notifies the employee that they have an assessment to complete and takes them directly to the assessment in Acorn. 
  3. The self-assessment asks employees to evaluate their competency level for the capabilities of their current job roles or, alternatively, a role they aspire to move into (hello, succession planning). 
  4. Momentum notifies the employee’s manager the self-assessment is complete, and it’s their turn to complete an assessment of said employee’s competencies. 
  5. When both assessments are complete, Acorn provides a visual report of the employee’s current competency levels compared with the desired level for their role. 
Screencap of Acorn PLMS's capability assessment as seen on the learner's dashboard

There are two ideal points at which you can schedule a conversation about goal-setting: before the initial assessment, and after step five. 

Goals should be specific, measurable, achievable, relevant, and time-bound in order to a) address employee career aspirations, b) align with business needs, and c) have a tangible impact for said employee. That sets the stage for training. 

3. Design tailored training & development 

The crux of Acorn PLMS is to enable truly strategic learning and development. This is why competency assessments are housed within the system. 

Acorn also enables you to map capabilities and competencies to content, so that the outcome of an assessment is the immediate creation of a development plan. There’s no time to speed on creating a plan for every single employee, which means employees aren’t waiting to start on a plan. And once content is matched to capabilities, you can easily create plans across your org or even tenancies. 

The added advantage is that assigned content is timely (based on competency), relevant (based on capability), and able to be reported on (but more on that later). Content isn’t just static courses, either; live learnings and workshops can be included. 

Don’t rely solely on online learning, though. Most learning happens through application, which happens on the job. That can’t be reported on, you might say. Again, we thought about this in designing Acorn. The system enables you to capture key interactions—e.g., best-in-breed sales calls or software demonstrations—as recordings, and turn those into shareable learning assets. (Side note, you’re not just relying on the relevance of third-party content this way. You’re actually creating living knowledge guides unique to your workplace.) 

4. Review progress to goals 

Think of this step as a circle back to step two. Momentum is again your best friend here. You have two options. 

  1. Restart the trigger cycle in Momentum, so that the first step is the last one and you create a loop of appraisal, development, and feedback. 
  2. Add another trigger to end the workflow (if goals were achieved) or start a new one and a new development plan (if goals weren’t reached). 

Either way, any development plan that starts with a competency assessment should end with one. It’s the objective way to ascertain definitive progress toward performance goals, and should act as the basis for the next performance appraisal meeting in the cycle. 

Here is where you need to coach managers to give constructive feedback. Part of this is having regular meetings (read: not annual) to ensure development plans are delivered when needed and that competency gaps don’t fester or cause strategic weaknesses. Find a way to capture these conversations, whether they are recorded as assets or transcribed, to provide quantitative data on progress. 

Don’t be afraid to have informal check-in conversations alongside formal performance conversations. Every employee’s performance and progress will differ wildly, and discussions about learner satisfaction can improve the learning process in the moment of need. 

5. Gather feedback for continuous improvement 

On the point of learner satisfaction, training efficacy, and process improvement should be woven throughout the performance appraisal process. There are a few ports of call here. 

  1. Depending on job role, you may need to review your capability and competency frameworks. Roles that require core technical qualifications (e.g. operations, IT, marketing) may need to complete training at more frequent milestones. 
  2. Training surveys give you quantitative data on training effectiveness. While not always an accurate measure of training design, learner sentiments can speak to engagement rates. 
  3. Get feedback from managers on the performance appraisal process and system. You may find that you need different workflows to match the different training needs between teams. Momentum is customisable here, allowing you to create multiple workflows as needed. 

When all is said and done, recognising employee achievements can go a long way toward boosting learning uptake. The greater the uptake, the greater the ROI on L&D and the better the impact on organisational performance. Rewards can go beyond promotions to mentoring with senior leaders or more choice in future learning and development opportunities (e.g. offsite training programs). This is where conversations with managers matter; they can ascertain what drives employees and how best to recognise and reward improvement. 

The importance of performance appraisal systems 

Employee performance is generally the make or break for your organisation. But without a way to evaluate employee performance, it exists in a vacuum rather than as part of a cycle. 

And when employee performance exists in a vacuum, so too does feedback. A lack of structured or objective feedback mechanisms creates pockets of potentially contrary workflows, that somehow must work together. Say your sales team receives near-daily, informal performance feedback based on their calls and service, but the marketing team has only formal, quarterly reviews.  

Despite working in close quarters, sales and marketing professionals are likely developing capabilities and competencies at different rates. So not only could there be a perception of inequality, but co-dependant organisational capabilities could well be working at different levels of maturity. That’s like having one leg that moves faster than the other—the body can’t move fluidly or change course easily. 

If performance appraisal is slow, broken, or infrequent, it’s a good bet your organisation will be more susceptible to disruptive technological and market changes. The most effective performance appraisal systems focus on iterative development as much as transformation; small but meaningful course corrections to skills, behaviours, knowledge, tools, and processes in the flow of work. 

Organic rhythms for appraisal can even be used to define core metrics for team and job performance, like cycle times. That’s one of the reasons we lean into capabilities as the basis for performance, with competency as the performance indicator in Acorn. The former enables you to understand what work is truly strategic, and the latter is the iterative measures for continuous improvement. And: 

  1. Continuous improvement comes from a culture that’s constantly creating, acquiring, and transferring knowledge
  2. Consistent, documented progress provides definitive validation for departmental strategies or business plans.  
  3. Centralised performance data gives managers the information to understand their team’s contribution to organisational goals, and reward or intervene as needed.  
  4. Training and development is intrinsically impactful when the result of consistent performance appraisals, given its focused on personal mastery.  

Technology like Momentum and Acorn is key for enabling a consistent approach to performance management across your workforce. The automated and centralised nature of our systems means you can instantly report on performance—and understand it in business terms, not just individual performance. 

Where organisations go wrong with performance appraisal systems 

Part of why capabilities work so well for performance is that they create a clear picture of what is being evaluated about an employee’s job performance. Companies without a clear strategy rely on the subjective discretion of managers to define and evaluate performance, which leads to differing interpretations of what should be evaluated.  

That means job descriptions and scorecards become static tools, and behaviours and mindsets may be overlooked in favour of outputs. One is not more meaningful than the other; in fact, appraisal should consider the behaviours displayed to achieve outcomes.  

While outcomes are the ultimate goal of a job role, they don’t provide information for training and development. The skill, knowledge, and behaviours shown and systems and tools used to achieve that outcome reflect the competency of your employees. Without a system or framework for evaluation, managers might overemphasise lagging indicators or past performance without considering potential. In doing so, not only are capability gaps left unidentified, but managers miss crucial opportunities to hone their own coaching and leadership abilities. You risk internal hiring becoming political, too, if the basis for decisions is not objective job mastery, but rather subjective beliefs from hiring managers. 

And in case you thought we wouldn’t mention technology, well—a fatal hit to the performance management process is not using the right technology. Admin-heavy evaluations are usually light on value, given the process becomes more about maintaining and validating documentation in one of the hundreds of spreadsheets or documents filled with employee information. While that may work (though inefficiently) for managers and their teams, it doesn’t give HR, OD, or L&D oversight to make truly informed workforce decisions. 

That puts your team on the back foot. Not only are you encumbering your organisation with outdated and inefficient processes, but you’re simply failing to enable employees to master their roles and have business impact. 

Key takeaways 

Performance appraisal systems have traditionally been seen as an HR tool; we staunchly believe performance shouldn’t exist as its own entity. By that, we mean performance management happens in vacuums separate from functions it should naturally support like learning and development and succession planning.  

Integrating your performance appraisal system into the employee lifecycle requires a solid foundation for understanding performance. We built ours on capabilities, with the added dynamism of competency to make performance progressive. To emulate that in your organisation, look to: 

  1. Define competencies for performance appraisal 
  2. Set performance goals for development plans 
  3. Design bespoke training and development for individuals 
  4. Measure progress to goals 
  5. Gather feedback to restart the cycle. 

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Building Capability

How to Design Skill Development Programs for Impact

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Let’s cut to the chase. You want to know how to create skill development programs that move the performance needle. 

This is your guide to do just that. You’ll also learn just what tools you need to design effective programs, pitfalls to avoid, and the business case for why you should be building skill development programs, like, yesterday.  

How to build skill development programs 

Most skill development programs focus on the titular, singular skill. This view is both too narrow and too broad for us. To have business impact, you should be following this proven process: 

  1. Identify skills and competency levels 
  2. Define competency levels 
  3. Align competencies with performance goals 
  4. Assess skill competency levels 
  5. Develop training programs 
  6. Review performance metrics 
  7. Provide feedback & coach employees 
  8. Embed into performance management 
  9. Reassess for continuous improvement. 

1. Identify skills and add competency levels 

As with all good training initiatives, we need to start with assessment to establish the current state of things. 

We need to understand skills that are currently closest to the money (in proximity to strategy execution) or at risk of extinction in your workforce (i.e. no one uses or possesses these skills). There are a few forms of assessments you can use, depending on your angle. 

  1. Role-based skills assessment: A training needs analysis compares what is required to perform in a job role effectively against the current skill level. Performance reviews also help to ascertain skills in need of development. 
  2. Organisational skills assessment: Skills inventories catalogue existing skills, and can be compared against taxonomies at full maturity. 

For the former, job task analysis also helps break down the specific tasks required in a role, and therefore, the skills required to execute them. Both the former and latter can be bolstered by competency frameworks or models. The aim is to have a priority list of skills to develop. 

Competency ascribes performance indicators to make skills actionable and measurable. Those are organised on a progressive scale, to provide a pathway for career—or in this case, skill—development. 

At a glance, each level of competency should make clear what the standard of performance is. That commonly looks like: 

2. Define performance indicators 

Those aforementioned performance indicators? They should describe the outcome of performance. This offers employees a clear, universal understanding of performance. 

Performance indicators also define what skills need to be developed and the “distance” of the gap to be covered. 

If you’re looking for inspiration, we have a free capability library of over 600 capabilities and 1600 competency levels for you to use as you see fit. These are also available within our Acorn Performance Learning Management System, so you can address competency and skills gaps in the same place development occurs. (We’ll go into more detail later.) 

You want to be prescriptive and concise here—the aim is for performance standards to be universally understood. They should also describe an outcome or objective that is also measurable (move ahead to step four for a full breakdown). Refer to job tasks as well to provide full context. 

3. Align competencies with goals 

Where many training initiatives fall down connecting the performance dots after training has been completed. Setting goals before skills development programs start means you can a) more effectively tailor training to employee needs and b) tangibly address business needs. 

You may choose to include desired results in your job scorecards. Said results can be three to five main outcomes of the role, compared to other responsibilities or required skills, knowledge, and behaviours included. These can and should be aligned with competency to create performance goals.  

For the example role of Developer, that may be: 

Each result would come with its own KPI, to make it a measurable goal.  

4. Assess skill competency levels 

Now we can revisit the way in which Acorn PLMS connects the dots between learning and performance. Acorn enables you to run targeted competency assessments based on the skills you want an individual to develop. These skills are pulled from your own frameworks or our available capability directory (noting that a capability is a combination of skills, knowledge, behaviours, tools, and processes), and will be part of the individual’s job scorecard

Within Acorn, you can design specific questions to assess competency levels or simply have employees and managers evaluate the former’s performance using the defined competencies. The system will then provide a visual analysis of the outcomes, comparing an employee’s current competency against the desired level for performance. 

5. Develop training programs 

Don’t go to all the effort of understanding personal performance needs, only to through generic online skill development courses at employees. The beauty of how Acorn aligns performance and learning is that you can attach content and courses directly to skills or competencies. 

What this gives you is an automated approach to tailored training, which has its own advantages. 

And on the point of content, don’t rely solely on eLearning or online courses. Most learning happens outside your learning solution and on-the-job when employees begin to apply new skills—when the information is needed. Ergo, the most effective skills development programs supplement on-the-job training with online courses. 

So, where Acorn can provide the supplementary theoretical knowledge, you also want to be considering how to flex that knowledge in the workplace. 

6. Review program performance metrics 

This is the step where many solutions will push learning completions as a signifier of a training job well done. While completions are often the goal line, they shouldn’t be the goal itself.  

Metrics like completion rates, assessment scores, participation levels, and time taken to complete courses act as a baseline. They provide a limited understanding of learning impact without any context such as prior knowledge, learning styles, or individual commitments outside the program. They also can’t ascertain real-life application or greater business impacts. For the various skill development courses that may be mandatory, learners might also try to game the system by simply completing content without engaging with it. 

It’s best to supplement fundamental metrics with more comprehensive ones. Consider what leaders want from skills development: 

Then evolve performance metrics to speak in this language.  

7. Complete feedback & coach employees 

The key here is to create a feedback loop through which you can consistently appraise employees and improve the efficacy of training. As a rule of thumb, most training courses offered should end with a survey of some kind. This provides qualitative data on learner satisfaction—which cannot be discounted, given it will correlate with completions. 

However, correlation can be misconstrued as causation, which is why we always recommend digging deep into performance outcomes. 

Acorn’s Momentum feature enables you to automate feedback processes. You can create milestones for a skill development program, such as assessments or performance conversations with managers. Momentum then notifies the relevant stakeholders, e.g. pinging employees when an assessment is due or emailing managers when a review is coming up.  

This helps make feedback BAU and gives managers a record of all performance progress to date. That in turn enables managers to better coach their teams on their specific skills and knowledge gaps, providing ongoing support have the formal skills development program has concluded. 

8. Embed development in performance management 

The previous step flows nicely into this one. Integrating skill development into performance management, so they are essentially one and the same, or at least symbiotic, leads to sustainable organisational development.  

Infographic showing the learning and performance cycle enabled by Acorn PLMS

Any development initiative really only works when there is a purpose to it. In our conversations with clients, we realised that purpose must be performance—yet so few solutions exist out there that link learning and performance. 

All of the steps above should become indistinguishable from performance management processes. That is: 

9. Go again with continuous improvement and reward performance 

If we’ve said it once, we’ve said it a million times: any development cycle should end with re-assessment. For skills development to be truly integrated with performance management, you need to understand what has changed and what’s contributed to that change. 

The feedback you gathered for process improvement should be put to use. Use it to benchmark performance outcomes; can you prove behavioural change? How do performance targets then need to change? If things didn’t work, how do you embrace mistakes and use them as lessons for future improvements? 

Reward mechanisms help make this a learning cycle rather than a one-stop destination. You can motivate employees by: 

The business case for skill development

Yes, people (including us) have been arguing that skills expire quickly for a while now. However, that doesn’t make them totally redundant—you’re still going to eat Easter chocolate, especially because it’ll eventually expire. 

That’s to say you should consider skills development as a continuous part of a larger business puzzle. Developing current skills now without further recourse in future will put you in a tricky spot, particularly with technical skills that may underpin certain roles. Consider how certifications and qualifications change as technology does, for example, digital marketing or design software. 

If it’s not clear, the business case for skills development lies in it being a continuous process. If you have a central learning solution in place like Acorn PLMS, it becomes easier to manage this. Frequent skills assessments and the delivery of learning plans can be almost fully automated, which means that training opportunities are ever-present in front of employees. And if the issue with skills is that they expire, there’s more than one point that can be made about the speed at which they are developed. 

A steady stream of skills required for capability needs means that your organisation is never without necessary technical abilities. That means you can also start to organise and visualise talent in a more accessible way; Josh Bersin notes that the future of work is organised by skills, not jobs. 

And when you treat skills as a key part of organisational development—but not the thing to rest all strategies on—you can offer more tailored and timely learning opportunities. Think of a short course for the latest digital marketing certification, or even a mentor for designers learning the newest software—skills that affect how well employees can do their work, but don’t mean make or break for your organisation at large. 

Where organisations go wrong with skill development 

We said it when we said treat skills as part of organisational development—as soon as you try and build business or even L&D strategy around skills, things start to crumble. 

Again, skills expire and evolve faster than the McKinsey-backed capability. They are much more beholden to technological advancements than the collective strength of a capability (that combines skills, knowledge, behaviour, tools, and processes). It almost goes without saying, then, that focusing on skills alone may negate the knowledge, behaviours, tools, and processes that are equally important to meeting organisational goals. 

When skills are the basis for not only development, but job design and broader talent strategy, you may need implement change every few years. That can lead to unpredictable job responsibilities, change fatigue in your workforce, and a lack of useful historical data to make informed talent decisions. On the flip side, successful capability building operates on a clear understanding of what individuals need which skills to meet performance goals. 

Much of the tech market also doesn’t provide a singular solution for a skills-based learning approach. You may need to integrate a skills aggregator with your LMS, or else blend your talent management platform with your learning system. The more integrations added, the further your data has to travel, and harder reporting becomes—if you can truly prove tangible business impacts from employee skills at all. 

Key takeaways 

Skill development can be a middling learning initiative. That is, it serves no purpose other than to be done—which is the first hurdle to clear. 

All learning initiatives should be linked to a greater business need. Start by: 

  1. Identifying the skills closest to strategy  
  2. Defining performance indicators through competency levels 
  3. Aligning those competencies with goals 
  4. Assessing individual competency levels 
  5. Developing tailored training programs 
  6. Reviewing program performance metrics 
  7. Empowering managers to coach employees 
  8. Embedding development into performance management 
  9. Codifying continuous improvement measures. 

The most important thing to remember is to make this a continuous cycle of skill development. Skip that last step, and you essentially make this a redundant activity given how fast skills expire. 

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Guide

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Building Capability

How to Design Effective Role-Based Competency Models

Back

Competency models work best when they serve a specific master; that is, when they’re designed to support job roles. 

In this guide, we’ll talk about how to design and implement role-based competency models that accelerate performance, the business case for using them, and some of the pitfalls to avoid. 

How to implement role-based competency models

Competency models are not new in business, though they aren’t always utilised to their full potential.  

To get the most out of them, you want to: 

  1. Define the role 
  2. Define the competencies needed to do the role 
  3. Define the expected behaviours 
  4. Define competency maturity levels 
  5. Assess competency to understand performance needs 
  6. Develop competencies via learning 
  7. Give employees feedback on performance. 

1. Define the job role

We start by considering the demands of every job role or position in your organisation. Taxing work, we know, but once you’ve done it en masse once, you have the foundation to make incremental improvements in future. 

The aim is to go beyond a generic list of skills to a job analysis of: 

That last consideration especially ensures that the competency models you design—and job roles themselves—are strategically meaningful. That’s to say, no role is unnecessary in your organisation, and therefore, all employees have an impact. (Which in turn means any resources put into those roles are invested soundly.) 

Get input from stakeholders and subject matter experts like managers, supervisors, and top performers for context on how the role functions within a team and wider organisation. Key to this stage is uncovering how roles will change in future. So, consider: 

2. Define the role’s competencies 

Most competency models will have the same core format. That is: 

We’re starting with the first point, aka the competency levels within the model. These core competencies act as a grading schema; at a glance, it should be obvious what the standard of performance is just from the label. 

Most competency levels are described similarly to beginner, intermediate, and advanced, though some utilise job levels. For example: 

We wouldn’t recommend more than five competency levels in total, as you begin to muddy the waters with more. The detail will come in the next step. 

3. Define the expected behaviours 

Performance expectations are what make the competency model a tool that’s tailored for job roles. It’s also what allows you to utilise the model for other tools, like job scorecards

Each competency level will have at least one performance descriptor. The more complex the competency level, the more descriptors you’re likely to have. 

Infographic example of a five-level competency model

All descriptors should be measurable as an outcome or objective of the role. Think back to those defined job tasks—how does that work ideally get done? 

We designed Acorn Performance Learning Management System (PLMS) to support processes like this. We have a free capability library of over 600 capabilities and 1600+ competencies that you can download, edit, and repurpose as you need. These are available in our PLMS, too, so you can start work on them in the same place you’ll develop them (but more on that later). 

From there, you can map capabilities and competencies to job roles by way of our Cohorts feature (handy if there are many learners with the same job role). Acorn enables you to sync or create complete employee profiles for all learners, so you can even map capabilities to fields like department and job level.  

4. Define competency maturity levels 

Maturity is like a health check. It establishes the level at which competency is performed in relation to strategic goals, and is part of a greater continuous improvement process. 

In that way maturity is not for employees, but rather the organisation. The flow looks something like this. 

  1. Initial or ad hoc: There is limited acknowledgment, recognition, or use of capabilities within the organisation. 
  2. Defined or structured: Basic attempts to map competencies to job roles are made but without a formal or widespread process. 
  3. Repeatable or consistent: Competency development emerges with capabilities applied across roles. 
  4. Managed or integrated: Capabilities and competencies are integrated into talent management strategy. 
  5. Optimised: Capabilities and competencies are consistently reviewed and a central part of progress to organisational goals. 

The aim is to be at number five, though it’s not necessarily a bad thing to be at a lower level. Awareness is the first step towards change, after all.  

5. Assess competency to understand performance needs 

From awareness to assessment. Here is the true test of effective competency models, for you want to be able to identify gaps between current and desired performance. 

Acorn PLMS puts your competency model closest to the point of impact. Through our Momentum feature, you can automate performance reviews and digitise the documentation involved. The ultimate outcome (development) is then also centralised in Acorn, putting learning, development, and talent management in the one place. 

But again, we’re getting ahead of ourselves. The first step is a competency assessment. We often hear the complaint that managing competency and capability information is hard, not least of all because it’s traditionally done manually within one spreadsheet with a million tabs or a million separate spreadsheets. Acorn enables both self- and manager assessments to establish the current baseline of performance, within the realm of competency defined by the role’s model.  

Screen capture of the Acorn PLMS capability and competency assessment report on the learner dashboard

Assessment results are displayed for both managers and employees to compare against performance expectations, as well as for HR, L&D, and OD professionals to view collectively at the workforce level (contributing to competency maturity). 

6. Develop competencies via learning 

Remember when we said that Acorn puts competency assessments at the point of impact? This is where the impact part of that equation starts to form. Truly strategic learning and development should follow a path that starts with gap analyses and ends with re-assessment.  

Remember again when we said Acorn enables you to map competencies to job roles? It’ll also prompt you to map content to competencies when setting up your model. This means that when you determine the current level of competency individuals are performing, you can immediately create targeted development plans.  

That looks like: 

  1. Building individual development plans at speed. Most corporate learning solutions throw more content at learners, but Acorn enables you to serve timely and relevant learning pathways for all employees with competency mapping. When your workforce is consistently building competency, you create a sustainable execution engine that fundamentally changes (and optimises) how work gets done.  
  2. Supporting on-the-job training. Given competency assesses the application of capabilities, and since the urgency of work can often trump the luxury of learning, you need to place learning in the context it will be applied. Any on-the-job programs can still be based within your PLMS; mentoring matches, as an example, can be based on competency and job experience stored within the system. 

7. Give them feedback on performance 

Think of any performance and talent management practices as a loop; recruitment, career development, succession planning, and the like all flow into one another. You start with a competency assessment, you end with one. Rather than closing the loop, though, this restarts the cycle and gives you the information with which to determine: 

  1. Performance improvements and business impacts (with tangible, quantitative data to boot) 
  2. The efficacy of training methods, and therefore, the strength of L&D investments 
  3. Maturity of capabilities, namely what is a business strength and which areas may be strategic weaknesses. 

Again, Momentum has been built to specifically optimise performance management. It enables you to define the milestone moments in the learning journey from the moment of conception (i.e. competency assessment). You can set the frequency for review and nominate the stakeholders who need to be notified (aka, employee and manager).  

This can support any performance management process, not just your development plans (though the fact Momentum lives within Acorn PLMS does make it superior for L&D).  

When hiring, role-based competency models are a guiding compass when evaluating suitability. The level of detail afforded by proficiency allows hiring managers to ask questions about attitude, aptitude, and experience. Depending on the formality of your recruitment process, you can run competency assessments based on these models within Acorn, giving you a quantitative performance analysis and a more objective way to contrast candidates. For successful candidates, that can be transferred to an onboarding and/or development plan that reinforces or develops required capabilities—all within Acorn. 

The business case for role-based competency models 

The competency model defines ideal performance in two ways. 

  1. It outlines what “good” looks like for employees in their roles. 
  2. It creates a standardised way of evaluating performance. 

A benchmark, baseline, or starting line for performance safeguards any talent or capability strategies you have in place. 

Let’s first consider the ever-growing skills and capability gaps. The World Economic Forum’s 2023 Future of Jobs Report found a churn of 23% of jobs is expected in the next five years, from both emerging and declining roles. Roles that revolve around administration and technology will change the most, yet cognitive abilities like analytical and creative thinking remain among the most important skills. That’s in contrast to a PwC report that showed 26% of responding employees were considering changing jobs in the next year. 

The same WEF report found that six in 10 employees will need training by 2027, but only half of them currently have access to adequate training. The key word there is adequate—not impactful or meaningful, simply adequate. Many employees don’t have clarity on how their roles will evolve over time, making them less likely to seek out training at all, let alone in time to remain effective in their roles. 

All of whichthis is to say that employees need direction and guidance when it comes to performing effectively in their roles. You can’t offer adequate, never mind meaningful training, without strong job descriptions. Strong job descriptions come from a sound understanding of business goals, and what collections of skills, knowledge, behaviours, processes, and systems are needed in those jobs to achieve said goals. 

Ergo, competency models offer: 

Where organisations go wrong with role-based competency models 

There are a few, common missteps that can be made with competency models. 

First, applying one generic model to the whole organisation won’t a) accurately reflect the nuance of skills, knowledge, behaviours, tools, and processes or b) derive valuable or useful data to make talent decisions. Failing to put in that initial grunt work puts you on the backfoot, and essentially makes the competency model another business relic. 

The second misstep is really a double feature: Using a static model and doing the work within a million spreadsheets (or, dare we say, within one spreadsheet with a million tabs). The former is an issue of adoption and the latter a problem of legacy which can manifest like: 

That leads to the third issue, which is a disconnect between the information ascertained by gap analyses and said learning solution. The more steps taken to migrate or reconcile data, the more likely manual error becomes, and the longer it takes to get development plans up and running.  

Think of it like tending a vast library without a catalogue or digital system. Imagine each piece of information as a book. Without an organised or accessible system, you’re constantly shuffling through stacks, trying to find specific books. Someone else may even be trying to find a book you’re holding, wasting their time. In short: Too much time is spent tending to the data, rather than analysing it. 

Lastly, and as with all capability-building measures, competency models aren’t sticky if they’re not embedded within learning. Say you only use a model for the occasional performance review, or to design a new role and then never touch the model again. In the first scenario, you create space for subjectivity bias in those performance reviews, and people are potentially held to inconsistent or irrelevant standards. In the second, you can’t be certain the role’s capabilities accurately reflect business. 

Key takeaways 

Role-based competency models define what “good” performance looks like. To clarify, that’s not an arbitrary “good”, but rather one that is derived from your business goals and the time frame in which your organisation wants to achieve them.  

Every job role should have its own competency model. Don’t be put off doing that at scale; instead, work smarter, not harder. 

  1. Start by defining individual job roles based on required tasks, skills, knowledge, and behaviours. 
  2. Define the role’s competency levels to architect the model. 
  3. Outline the expected behaviours for each level of competency.  
  4. Map competency maturity levels for assessment. 
  5. Assess individual competency to understand performance needs. 
  6. Develop competencies with targeted learning opportunities 
  7. Provide cyclical feedback on performance, and re-assess competency. 

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