By Ray D'Cruz, CEO and Co-Founder, SkillsScorecard
There’s been a lot of debate about performance management recently. While momentum for change has been building for some time, the April Harvard Business Review article about Deloitte rethinking performance management got professional service firms (PSF) talking.The message from those advocating for change is simple: a more dynamic business environment requires a more responsive performance management than the traditional annual review process.
As with many public debates, there’s a lot of media hype, and getting a clear grasp of the issues is difficult. In order to help HR rethink its approach we’ve undertaken a PSF focussed study to provide firms with clarity about the current reality of performance management and what the future looks like.
The study conducted jointly by SkillsScorecard, Managing Partners’ Forum and KermaPartners surveyed over 250 firms (50 Australian) about partner and staff performance management. Over 70% of the respondents were from law firms.
While the research paper is to be released shortly, in this blog post we identify three key findings to get you thinking about performance management in your firm.
Simplified processes, and more conversations
The survey highlights a clear desire for more frequent feedback: around 70% of respondents seeking quarterly or six-monthly conversations instead of the regular annual review.
More frequent conversations make sense: they allow managers and employees to pursue opportunities with more agility and deal with problems before they fester and cause anxiety.
A related priority for respondents is simplifying and shortening the process. Put simply, they want to invest time in conversations, not the bureaucracy that often goes with them.
The challenge for HR is employing a simple and enjoyable process with frequent, simple touch points.
Rankings and ratings are not hot button issues for PSFs.
While the current media debate is centred on forced rankings and performance ratings, these are not hot button issues for law firms.
Forced rankings (where employees are plotted on a bell curve based on their performance rating) are rarely used in law firms. Most PSFs never followed the corporate sector down this path.
When it comes to ratings, our study shows that removing ratings is a priority for only 7% of firms. Conversely, 18% of firms are actually thinking about introducing ratings.
While ratings are not a major concern for law firms, the current debate does invite reflection on the role of ratings, especially with emerging neuroscience casting doubt on the motivational effects of this practice.
Like every one of these issues, there are pros and cons. If ratings are (1) accepted and understood (2) deployed intelligently and (3) used for a purpose such as making talent management decisions, then they may be valuable.
Law firms dragging their heels on After Action Reviews
In our view, After Action Reviews (AAR), feedback gathered at the conclusion of a matter or project, remains an untapped goldmine for law firms.
End of matter feedback has numerous benefits. For groups, it may drive productivity through process improvement. In the age of more for less, finding productivity gains might be the key to maintaining profitability. For individuals, matter-based feedback is timely and contextual.
Despite these benefits, less than 10% of law firms have made AARs part of routine business activity. In contrast, over 50% of accounting firms report that these reviews take place regularly.
While there are cultural and behavioural barriers to making AARs routine in law firms, the benefits are compelling: it’s time to act.
Seizing the moment
Momentum for change is strong: experimentation is taking place, technology is evolving and partners and staff are engaged like never before.
Firms rethinking performance management need to have clarity about the current situation and future possibilities before deciding the right blend of old and new.
Alec Bashinksy, National Leader - People and Performance at Deloitte will share his perspectives on "Reinventing Performance Management" in the first ALPMA Leading Your Firm program livestream event for 2016 on Thursday March 3 at 1pm (AEDT).
This event is generously supported by our Major Partners, Thomson Reuters and BOAB IT, and by Regional Partners, CommArc and AMBS/Diversify.
Registration is free for ALPMA members or $99 (incl GST) for eligible non-members. Register now!
About our Guest Blogger
He is co-author of Performance in the Professions 2015, published by Managing Partners’ Forum.