It’s a frigid Monday morning in January. 5:36 AM, to be exact. After three rounds of snoozing your alarm, you begrudgingly hit the “off” button and stumble to the kitchen to assemble your belongings. With car keys in hand, you’re off to the gym—your first foray into fitness after a six-month hiatus. Like a long-lost friend, your trainer eagerly greets you upon arrival and beckons you to the weight room. He outlines your regimen for today: a circuit of burpees, push-ups, squats, and lunges. It isn’t easy, but you muscle through. Post-day one brings debilitating muscle soreness. Even walking is tough. But as weeks two, three, and four come and go, you find that you no longer dread the daily tune of your alarm. Dare we say that you begin to look forward to it! Over time, you’re able to take on new forms of exercise—running, push-ups, and weights—with increasing ease.
Much like an individual building athletic strength, the business world is going through an agile revolution that’s turning ways of working on their head. The goal? To help organizations more readily embrace change, drive efficiency, and deliver competitive products and services in a market climate shaken by volatility. When embarking on an agile journey, many organizations may feel like it’s their first day in the gym. In this story, the HR team works as a personal trainer. It plays a central role in strengthening the organization’s muscle for agility.
In our earlier blog, we revealed that to help transform the business and its workforce, HR needs to focus on two key areas: instilling greater flexibility in operations and delivering more experiential, people-centered products and services.
Similar to when a personal trainer designs a gym-goer’s training regimen, we find that HR leaders often start by redesigning key people products and services. Within these products and services, the priority is usually performance management. This is because annual or biannual and individual-focused performance management cycles can inhibit agile transformation. For example, the traditional performance management approach holds people accountable for past behavior at the expense of improving current performance. Simultaneously, the business moves to shorter project-based cycles, regular reflection, and immediate course-correction.
HR leaders looking to facilitate the organization’s move towards agile can instead focus on three initial steps to improve their performance management process:
- Support flexible goals
- Supercharge performance reviews
- Build a feedback culture
Support flexible goals
In an agile world, context and business needs are continually changing, and agile teams must pivot regularly to maximize value for customers. Setting and reviewing goals once or twice a year, as most organizations do, does not fully support an agile enterprise, and can become a blocker as goals become outdated or irrelevant.
To build flexibility, HR needs to enable more frequent, iterative goal setting. The formal annual or biannual process involving the input of high-level goals in the HR system may still be necessary. Yet, line managers, product owners, and others charged with managing others' performance should be encouraged to make these goals tangible and relevant for individuals. They should review and update them with their teams frequently.
This can be done through dedicated monthly or quarterly sessions. Employees define their own goals for the short term, clearly linking individual goals to team-level goals and the organization’s strategic objectives. These goals can then be regularly updated based on the business's shifting priorities and personal performance, development needs, and career aspirations.
Supercharge your performance reviews
Performance reviews conducted annually or biannually also happen too infrequently to allow individuals to learn. They often ignore the mindset and behaviors necessary for success in an agile organization, including focusing on value for customers, working in small teams, and operating as a network.
While there is value in taking a holistic view of performance, agile ways of working require teams to work iteratively and adapt to changing business needs. HR teams can supercharge the traditional review by enabling regular “mini-reviews” between individuals and their line managers that are focused on readdressing objectives and barriers to good performance. These should work hand-in-hand with goal setting. Consider assessing what the individual has achieved, how they have performed against their goals, and how well they embody organizational culture, values, and behaviors. Assess how effectively each employee collaborates, helps others, and contributes to the team—all of which are key to success in an agile environment.
Build a feedback culture
Agile ways of working are, by their very nature, collaborative and iterative, with autonomous teams working toward team-level objectives and key results (OKRs). Robust feedback becomes particularly crucial in this environment. It allows individuals to understand how their decisions affect others, enabling them to adjust quickly and putting them on the path of continuous improvement.
Organizations that rely on the traditional formal performance management process often find that employees don't get feedback frequently enough to adjust performance in fast-moving agile teams. In many cases, the performance review begins to feel like a check-the-box exercise rather than one that encourages employee self-reflection.
To make flexible goal setting and reviews successful, HR should help build timely, continuous, and multi-sourced feedback loops and define the process for integrating this into goal setting and performance reviews. Because teams are central to agility, collect both team-level and individual feedback.
This process can cultivate a continuous feedback culture, making it a habit and a social norm among employees. HR’s role is to educate the organization about the importance of feedback and provide tools that equip people to give and receive it in an open, flexible, and straightforward way.
Managing performance along the path toward transformation
Applying agility to performance management paves the way for more agile approaches in other processes and frameworks, including how you reward and incentivize people to manage performance and instill an agile mindset and behaviors across the organization. To start making performance management more agile, consider:
- Which business imperatives drive the need for more agile HR processes?
- What is leadership’s appetite for introducing HR-related change in the current business landscape? For example, are there other major changes occurring elsewhere in the organization that may lead to change fatigue if the new processes are introduced?
- When were changes to the performance management process last introduced, and how well did the business adopt these? Which are still valid?
- How can you position new changes as a step toward a more agile process to support the business?
- How well are your systems geared to support a more agile performance management process?
- What steps can you take immediately—either as a pilot in a business area or across the enterprise? Is it possible to set up an A/B test?
- What obstacles might you encounter (e.g., resistance to change, process confusion, lack of fit with the agility, or level of transparency within the business)? How can you overcome these incrementally or as a whole?
With these initial steps in place, your HR function will prime the organization—much like a personal trainer strengthening a reluctant gym-goer—for its agile journey, equipping it with the muscle to act, learn, and adapt more readily for the volatility all around us.
Our next blog will continue to explore how HR can train the organization for greater agility through a more flexible, strategic HR function. In the meantime, read North Highland’s three-part series on creating an agile organization, discover agile’s five hidden amplifiers for scaling across the enterprise, explore insights on measuring success in an agile environment, and uncover how to go about building a new social norm in your organization.