Aligning objectives, improving productivity, optimizing processes… If these issues are at the heart of any organization, companies must now evolve their performance management systems to optimize their results in an increasingly uncertain environment. So, what are the keys to successful performance management?
Definition and challenges of performance management
Performance management is defined as a set of processes, rituals, and behaviors implemented in organizations to optimize performance and track both individual and collective results.
Performance management systems naturally address key issues such as: The alignment of objectives with the corporate strategy, Improved productivity through actions with high added value, or the continuous adaptation facing change.
Above all, performance management is directly linked to the commitment of the employees, a key factor of success – by doing feedback regular, stimulating challenges… – for achieve common goals and create sustainably value.
Performance management is also a a strong marker of a results-oriented culture.
To infuse this result-oriented culture, it is necessary to give meaning to the actions of the employees, develop their skills continuously and give them the means to actively contribute to the company’s strategy through the measurement of results.
For managers, managing performance means defining clear and specific objectives and effectively steering the levers implemented by their team based on individual and collective results, while simultaneously holding each employee accountable.
Today, a truly effective performance management system must not only meet these challenges, but also take into account an environment that is more volatile and uncertain than ever before. Here are our 4 keys to successfully managing performance in the workplace!
1. Pillar «agility»: adapting performance management to the evolution of organizations
Historically, the concept of «performance management» has evolved since the « management by objectives »Formulated by Peter Drucker in the 1950s, designed for the highly hierarchical organizations of the industrial era.
Today, with the emergence of more flexible and matrix-based organizations, performance management systems must be transformed to meet the needs of new structures and the expectations of employees, based on autonomy, agility and transparency.
Let’s take the case of an organization that has gone through Agility at scale… it would be completely counterproductive to keep a performance management system designed for a hierarchical and siloed structure! Thus, at BNP Paribas France (BCEF), the transition to agile management at scale has had beneficial effects on performance management:
«A much less hierarchical and much more cross-disciplinary management, as well as smaller and multidisciplinary teams allow us to deliver in shorter periods. This allows us to accelerate in certain new business models to deliver more value to our customers.»
Ombeline Bouchacourt, Director of the Agile Transformation program (see the interview)
It is therefore today It is necessary to adapt performance management to the systemic and structural changes in organizations, For example, with more flexible objectives, decentralized decision-making, and more regular discussions… by placing continuous improvement at the heart of the approach.
2. Pillar « Beyond Budgeting » : adapting budgetary practices to the pace of priorities
In the age of agility, annual cycles of budget management are no longer adapted to the pace of companies wishing to remain competitive and connected to their market.
The traditional pace of an annual budget, established in an era when economic stability allowed for long-term forecasts, no longer meets current requirements! This process is not only rigid and time-consuming, but it often produces outdated results from the moment it is implemented.
In the economic and geopolitical context we are experiencing, it is imperative for organizations to adopt more flexible budgetary practices such as the « Beyond Budgeting« , A management approach that emphasizes progress towards the result and continuous adaptation.
According to one BCG study 2021, Companies that have adopted both agile methods and the « Beyond Budgeting »Reported by Significant improvement in their ability to respond quickly to changing priorities. By freeing themselves from the constraints of traditional budgetary processes, they can align their resources more quickly with strategic objectives, enabling them to better cope with unforeseen challenges.
To adapt to the changing dynamics of our environment, it is now essential to constantly reviewing its forecasts and adjusting them in real time. The goal is no longer to follow a predefined roadmap, but to be able to deviate and adjust its trajectory according to unforeseen circumstances. Moreover, In the most mature companies, the budget cycles are often adjusted every quarter or quadrennium..
«Today, the annual budgetary process is no longer suited to the current needs. It is very time-consuming and very often turns out to be inaccurate in the end. Now, it is necessary to regularly update our forecasts. The budget should be like a GPS: where we are going, how we are going there, and how we are able to take another route in case of obstacles or unforeseen circumstances.»
Pascal Rhoumy, associated within the financial audit and consulting firm BM&A Groupe
3. Pillar «collective intelligence»: integrating the collaborative approach to achieve results
As mentioned above, performance management can no longer be limited to an individual approach, in an environment where collaboration has become essential. Achieving results must also be based on collective performance, the result of synergy between the teams and within each team.
This implies that revise the performance indicators to take into account not only individual contributions (in a logic of added value for the company) but also the quality of the collaboration within the teams and the fruits of collective intelligence, Especially in a context of hybrid work.
One Deloitte study in 2024 It shows that companies adopting management models based on collaboration and collective intelligence achieve a 20% to 30% increase in productivity!
«The collective intelligence of a group of men and women who are driven by the same vision, the same project, and the same values is much more powerful than a strictly individual approach. top down. »
Fabien Gillen, VP HR & Communication of the Nexans Group (see the interview)
It is therefore important to Create a culture of results and performance that is collective, where individual goals are aligned with those of the team and the organization. By recognizing collective contributions, this approach enables teams to become more cohesive and committed, capable of working together to achieve common results.
In this context, The role of the manager becomes that of a facilitator, helping to unleash collective potential by fostering communication, transparency, cohesion, collaboration and collective intelligence (see also « The 4 levers of the agile manager to boost employee engagement« ).
4. Pillar «strategic alignment»: driving performance using the OKR method
Performance management is closely linked to the strategic issues of the company. However, the OKR method (Objectives and Key Results) constitutes an effective framework for achieving this alignment! Adopted by large companies as well as startups, OKR are a powerful tool for driving performance throughout the organization and in a transparent way.
The OKR method allows for the definition of ambitious goals and measurable key results that facilitate the monitoring of progress at all levels, while ensuring that the actions of each employee are aligned with the overall vision of the company. Thus, OKR commitments involve all the teams in achieving the results, creating an environment where everyone understands their role in achieving strategic objectives.
«How will you know that you have achieved the perfect alignment? The day when every employee feels empowered to go see their manager when they feel like they are working on topics unrelated to the OKRs! They will be able to question the relevance of their actions… and thus avoid any waste of energy on non-strategic topics.»
Raphaël Kattan, Associate Director of talenco
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The main points to remember
⬜ In a context of constant change, performance management systems must necessarily evolve to integrate the new organizational realities and the expectations of employees.
⬜ Adapt to Agile evolution organizations that challenge Budgetary practices, integrate one collective dimension stronger and align with the Strategic objectives They are key levers for managing performance effectively. Through collaboration and a culture of results, companies strengthen their resilience and their ability to innovate.
⬜ To respond concretely to these challenges, The OKR method offers a particularly robust framework for performance management, enabling organizations to navigate in a complex environment while creating a culture of sustainable performance.