Interview with Subject Matter Expert on Performance Management

In this month’s edition, we welcome Ersin Altun, experienced HR executive, to discuss the overall evaluation of performance management from the perspective of an HR professional. Once again we thank Ersin for his contribution in our second edition of monthly newsletter.

ICAGLAR: What fails with performance?

EALTUN: Performance management processes often fail because they are outdated, overly rigid, or misaligned with the organization’s culture and goals.

Many companies adopt standardized performance management systems without tailoring them to their specific industry, workforce, or organizational goals. This leads to processes that feel irrelevant or disconnected for employees. Usually “One-Size-Fits-All” approach doesn’t fit all.

Traditional systems emphasize rating and ranking employees rather than fostering growth. When employees perceive performance reviews as punitive rather than constructive, engagement and trust decline.

Annual or semi-annual reviews fail to provide timely feedback, leaving employees unclear about expectations and progress. In today’s fast-paced work environments, feedback needs to be continuous and actionable.

Many systems rely on the subjective opinions of managers, leading to bias and unfair assessments. This not only demotivates employees but can also create workplace conflicts and undermine diversity efforts.

Performance management is often top-down, ignoring the input and aspirations of employees. This approach misses the opportunity to align individual goals with organizational objectives.

Companies frequently measure performance using metrics that no longer align with business priorities or modern work practices, such as collaboration, creativity, or agility.

Managers are often not equipped with the skills or tools to provide meaningful feedback, set realistic goals, or coach their team members. This leads to ineffective performance discussions and missed opportunities for improvement.

Performance management systems sometimes fail to link individual performance to team and organizational success. Employees may meet their personal targets but fail to contribute to broader strategic goals.

ICAGLAR: What should we consider of successful performance cycle?

EALTUN: Think of this like planning a road trip. You don’t just hop in the car and drive—you decide the destination first! Sit down with employees at the start of the cycle and set goals that are ambitious but doable. Make sure those goals align with what the company is trying to achieve. If employees feel like they’re contributing to something bigger, they’re way more motivated.

We all know standard steps anyway. Setting Goals, Planning, Monitoring, Evaluating, Rewarding. I especially would like to mention best practices.

• Set Clear Priorities and Deadlines: Align employee efforts with organizational goals to ensure clarity on priorities

• Foster Collaboration: Create an environment where team members can openly discuss goals and progress, enhancing engagement and accountability

• Utilize Technology: Leverage performance management software to streamline processes, track progress, and facilitate feedback

• Provide Support and Training: Equip managers with the necessary training to guide their teams effectively through the performance management process

• Embrace Flexibility: Adapt the performance cycle based on organizational culture and individual employee needs, whether through quarterly reviews or continuous feedback models

A successful performance management cycle is not merely a series of evaluations; it is a dynamic process focused on continuous improvement and alignment between employee contributions and organizational goals. 

By implementing structured stages, fostering collaboration, utilizing technology, and maintaining flexibility, organizations can create an effective framework that enhances both employee satisfaction and overall business performance.

ICAGLAR: Is there a best model of performance that fits to all (Companies)?

EALTUN: There is no single best model of employee performance management that fits all types of companies, as each organization has unique needs, cultures, and operational contexts. However, several performance management models can be adapted to suit various environments. I would like to briefly mention some of them.

360 Degree Feedback Model: It is effective in organizations that value collaboration and transparency, as it promotes continuous feedback and development. However, its implementation can be time-consuming due to the need for extensive feedback collection.

Management by Objectives (MBO): This model works well in structured environments where clear objectives can be defined and tracked. It fosters accountability but may be less effective in dynamic or rapidly changing industries where flexibility is crucial.

Balanced Scorecard: Suitable for organizations seeking a holistic view of performance that aligns individual contributions with strategic objectives. It can be complex to implement and requires robust data collection.

Results-Only Work Environment (ROWE): Ideal for creative or innovative industries where autonomy can lead to higher productivity. However, it may pose challenges in maintaining team cohesion and communication.

Project-Based Performance Management: Particularly effective in industries like construction or consulting where work is project-driven. It allows for detailed assessments but requires well-defined project goals.

High-Growth Model: Best suited for agile organizations that prioritize continuous improvement and quick adjustments to performance metrics.

While no single model universally fits all companies, organizations can choose or adapt a combination of these models based on their specific context. The key is to align the chosen model with the company's culture, strategic goals, and operational needs to ensure effective performance management. Regularly reviewing and adjusting the approach based on feedback and changing circumstances will also enhance its effectiveness.

ICAGLAR: Is classic year-end performance appraisals really cure to Organizational Success?

EALTUN: Classic year-end performance appraisals have been a traditional method for evaluating employee performance, but their effectiveness in driving organizational success is increasingly questioned. 

A significant number of managers express dissatisfaction with annual performance reviews. Research indicates that only 5% of managers are satisfied with the quality of these reviews, and only 10% of HR leaders find them effective. 

This dissatisfaction often stems from the perception that these reviews are time-consuming and fail to provide meaningful feedback.

Many employees view traditional performance reviews as a waste of time, with nearly 46% stating they do not find performance management processes effective. 

This lack of engagement can lead to decreased motivation and productivity, counteracting the intended benefits of performance appraisals.

Annual appraisals typically focus on past performance rather than fostering ongoing development. This infrequency can result in missed opportunities for timely feedback, which is essential for employee growth and alignment with organizational goals.

While classic year-end performance appraisals have been a staple in many organizations, their effectiveness as a standalone tool for driving organizational success is increasingly being challenged. Moving towards more dynamic, continuous feedback models can foster greater employee engagement, satisfaction, and alignment with company objectives.

Organizations should consider adapting their performance management strategies to meet the evolving needs of their workforce and the demands of modern business environments.

ICAGLAR: How can HR improve the adoption and ownership of performance management by Leadership?

EALTUN: One of the complaints of the HR community about the performance evaluation process is that the process is completely suppressed by HR and that business leaders do not embrace the process sufficiently.  In fact, we can extend this to many other HR processes. I constantly encounter my colleagues complaining about this issue. My diagnosis on this issue is that business units do not believe in the fairness and business usefulness of the processes both in the goal setting process and in the evaluation period.

I see that HR departments approach the issue with a very top-down, even dictative approach. In fact, these processes should be no different from any process in the production or operations department. Just as, for example, the sales department comments on any process of the production department and even initiates changes in the process in order to increase customer satisfaction, the same should be true for HR processes. It should be commentable and even revised for the success of the company. Then the ownership of the departments will increase and the process will no longer be just HR's process.

ICAGLAR:  How will new technologies facilitate performance evaluation processes?

EALTUN: It is a known fact that AI will be in our lives more than ever in the future.

AI tools can analyze e-mails, project timelines, or customer interactions to identify patterns.

For example:

• Did someone consistently respond quickly to client queries?

• Did their ideas lead to measurable results 

Tech can analyze individual behaviors and preferences, creating insights that are unique to each employee.

For instance:

• “Ali thrives on creative projects but struggles with time-sensitive tasks.”

• “Zeynep is a strong mentor to new hires; let’s encourage her to formalize that role.”

This personalization helps employees feel seen and valued, making the whole evaluation process more meaningful.

Using historical data, AI can predict trends:

• Is someone likely to burn out?

• Could a team benefit from additional resources during a busy period?

It’s like getting a heads-up on potential issues so you can tackle them proactively.

We must admit that we are living in days where it is difficult to foresee how technology will change our lives.