Shape The Future, Don’t Appraise the Past: Performance Contracting is the Key to Employee Engagement and Organizational Excellence

The HR and business press is full of articles about how Generation X, Generation Y and the next Generation now entering the work force are different from the Baby Boomers ware about to retire. But in one way they are not so different. Employee satisfaction surveys still tell us, like they have for the past forty years, that employees do not believe that performance appraisal helps them improve their performance.

So why are we as managers not listening? There are a variety of reasons. Some have to do with organizational inertia. Some have to do with the fact that managers appreciate the re-enforcement of the relative power positions inherent in performance appraisal. But most importantly, we, as managers, really haven’t had the business support systems that we need to move from performance appraisal performance to performance contracting.

Contracting for performance with our direct reports requires that we commit to the regular independent delivery of feedback to them. That feedback has to be based on agreed upon metrics. Those metrics, in the majority of cases, need to be tied to the automated business applications that we now use to run our business.

So the business tools that we need are finally there. Now all we need to do is change our attitudes. We need to stop appraising people. We need to stop telling them what they did and did not do in the past. We need to stop rating them on a scale that invariably involves subjective judgment.

We need to move to contracting about the future with these individuals. We need to help them get crystal clear on what it is they are expected to do. We tell them exactly how we will evaluate whether or not they accomplish the things they contract to do. And finally, we need to make sure that they get the data on these metrics directly from the automated business applications that we both use to do our work.

For the organizations that do this, magic happens. Most people want to do well. Most people want to contribute to the organization for which they work. Most people, when they get regular independent feedback on how they’re doing, will take steps to correct their performance when they go off track. The best of them will strive to exceed their contracted delivery levels

That’s the essence of performance contracting for excellence. It is also the basis of effective boss – direct report coaching. Together, these two are the key to engaging people in the workplace. That engagement is, and will be ever more crucial, in the current and coming competition for skills and talent.

Let us as managers demonstrate to the people who work for us that we can do what we expect them to do: listen to feedback. Let us take what we’ve been hearing on employee satisfaction survey after employee satisfaction survey seriously. Let’s start shaping the future, and stop appraising the past. Commit yourself to performance contracting with your direct reports.

Here are some links that will help you accomplish this.

Why Performance Contracting?

C-Level Performance Contracting: Getting It Done (A How To Guide)

Both are short voice over presentations that run in a browser over the Internet.

“Shape the Future, don’t appraise the past”. ™

Tags: employee engagement, organizational excellence, performance contracting, performance management