How Meaningful Performance Conversations Drive Learner & Organisational Success

This article first appeared on Acorn Labs in April 2024.

For a more in-depth look at performance conversations, have a read of the full article.

Performance conversations are structured discussions between managers and employees that aim to evaluate and improve employee performance in the workplace. They’re regularly occurring conversations to enable feedback exchange, development planning, and the delivery of performance assessments.

But the truth of performance conversations is this: Employees and managers alike don’t like them. Performance reviews are often meaningless interactions that don’t drive employee or business success, especially when they occur only once a year.

Why are performance conversations important?

Performance management is crucial for driving an organization’s forward momentum, and part of getting that right is having meaningful performance conversations. Specifically: Future-oriented discussions.

Done right, performance conversations create improvement in several ways:

1. More accurate assessment of employee performance
2. Better feedback exchange between managers and employees
3. Improved goal-setting and alignment between goals and organizational strategy
4. Improved development planning for employees.

How to transform performance conversations into meaningful interactions

Formal performance reviews are still an essential part of the performance management process, especially in larger organizations. The issue with performance conversations is that doing them as an exclusively annual activity isn’t helping employees or the company.

There are five key practices for creating effective performance conversations.

Set clear expectations and goals

Performance management only drives business success when there are clear expectations and goals for employees to work towards—and those goals need to be aligned with business strategy. This way, completed goals take the company one step closer to meeting its objectives.

Alignment only works if you use business capabilities—the mix of skills, processes, knowledge, and behaviors that deliver business outcomes. If having the best customer service in the industry is an outcome you want, then your capability might be “quality service” or “increased customer feedback”. From there you can define SMART goals (the specific goal, measurable aspect, achievability, relevance, and time frame).

Make managers coaches

Managers need to be trained as coaches, both formal and informal. Receiving coaching gives employees feedback in the moment of need, which means they can correct performance issues as they arise rather than waiting for that once-a-year review. This helps reduce the employee’s time to proficiency and boosts business performance earlier.

Promote regular and ongoing feedback

Irregular performance conversations prevent performance issues from being addressed, but regular and ongoing feedback can mitigate that. Think along the lines of regular and frequent one-on-one meetings, which should cover topics like:

• Current priorities
• Projects or issues the manager can help with
• Areas where the manager can better support the employee
• How work is going for the employee and team
• How the employee is tracking in terms of KPIs.

Stay future-focused

Performance conversations that focus entirely on past performance aren’t motivating or useful for employees. Past performance should be discussed, but the focus should be on development opportunities going forward.

Consider your business capabilities and what the organization needs in the future in order to meet business priorities. The gaps between current capability performance and future required capabilities can be assessed with a capability gap analysis and will guide where development should be targeted.

You can measure the capability in terms of competence. Low competence means the capability is being performed below expectations and needs to be developed, whereas high competence means the capability performance is exceeding expectations. Remember that what is meeting expectations now may not be meeting expectations in the future.

Evaluate and adapt performance management processes

Business needs, employee preferences, and best practices in performance management evolve over time, and so performance management processes will need to change in accordance. You can evaluate and assess performance management processes by:

• Conducting anonymous feedback surveys
• Measuring performance metrics and KPIs
• Tracking employee engagement and retention rates

Analyze the collected data to find trends, patterns, and areas for improvement in your performance management process.