Author: Fabiola Eyholzer
The accelerated pace of today’s business world makes it increasingly difficult to think in multi-year cycles and set rigid top down goals on an annual basis. You can handle that by reducing the cycle time and implementing an iterative, interactive process. That way you can deliver results while being able to adequately adapt to internal and external changes.
The Performance Management cycle is typically aligned with the financial reporting and HR calendar, which are running on an annual basis. Consequently, most organizations set performance goals once a year. According to the 2014 ERC Performance Management Practices Survey only a small number of companies make it a semi-annual (7%) or quarterly (2%) occurrence. 
Yet, no matter what industry you are in, you are likely to experience the accelerated pace of today’s business world. It has become increasingly difficult to think in multi-year cycles and set rigid top down goals on an annual basis.
A Performance Management system that is set out to define and evaluate goals every 52 weeks is simply not able to keep up with the speed and demands of the digital age. This is especially challenging for agile teams working on a 1 to 4 week cadence.
The lengthy 1 year cycle robs you of the opportunities to learn and adapt to internal and external changes. However, you can respond to that by shifting to an iterative, interactive performance process and reducing the cycle time to best fit the flow of your value streams.
Getting the cadence right is the first steps to accomplish an optimal balance of responsiveness, predictability, and reliability. Make sure to understand the importance and impacts of varying times in order to establish the right cadence for your teams. You don’t want to have iterations that are too short (<1 week) for real achievement and learning nor do you want them too long (4 weeks +) with the risk of losing focus and agility. The majority of teams run on 2 week iterations. If in doubt about your flow, this might be a good starting point for you too.
Each iteration follows a clear path with the common ambition to deliver tangible results to the customer(s). This is the ultimate goal of lean | agile teams. And that makes Performance their key driver.
University of California, Berkley accurately defines Performance Management as an “ongoing process of communication including clarifying expectations, setting objectives, identifying goals, providing feedback, and reviewing results.” 
Agile approaches embrace all of those elements in such a way that they are not only the core parts of each cycle but are deeply embedded into the workflow and routines. But this is not done in a top-down approach. It is a collaborative effort involving each team member.
The shift to an iterative, interactive Performance Management process will give you a competitive advantage in a fast paced complex business world where the ability to learn fast and adapt swiftly is key.
This article is part of the series “How Lean | Agile Enterprises Push the Reset Button on Performance Management”
This post was contributed by Fabiola Eyholzer, CEO of Just Leading Solutions, LLC. More information about Fabiola, Agile HR and the services of Just Leading Solutions can be found at www.justleadingsolutions.com.
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