Over 90% of managers believe their organization’s performance management process does not correspond to the actual work done by their teams and consequently there is a significant dissatisfaction with annual evaluations! It has been observed that a large proportion of managers who give this feedback are from Project-centric organizations or companies where work is done in teams.
Project-centric organizations include Professional Services companies, Not-for-Profits, EPC (engineering, procurement and construction), Consulting, IT Services, Staffing and Product development companies amongst many others. Marketing, R&D, Strategy and even HR departments of many companies are project-centric too.
In project-centric organizations, employees move from one project to the next instead of working in one job position for many years. In many cases, employees work on multiple projects simultaneously. The goals, job requirements and timelines for each project vary, can evolve continuously and are largely dependent on the end-customer. In fact, in todays’ gig-economy, more and more work is project based instead of large hierarchical reporting structures.
Most project-centric organizations have a very high proportion of white-collared workforce – that is technologically aware, wants transparency and prefers a flexible and nimble work environment. It does not work if you enforce a rigid and hierarchical performance management process that includes top-down goals and common competencies in project-centric organizations.
HR has been struggling to address this challenge and numerous methodologies and solutions have evolved over the past decade. These include Continuous Performance Management, 360 Feedback Review, Pulse feedback, OKR, Balanced Scorecard and so on. Unfortunately, none of these have been effective in meeting the objectives of a Project-centric organization since these processes (and associated tools) are either too flexible, or too rigid.
If you are a part of a project-centric organization or your employees work in teams, and would like to introduce an effective performance management process, you need to:
Empower the Project Manager/Team Leader: Enable each project manager/team leader to own the performance management process. Allow them to add or remove members in their project(s) and to set goals, skills, vacancies, budgets and job requirements for each project that they manage.
Implement a flexible workflow: Let employees or the manager create the evaluation, setup the parameters of measurement, provide comments in an additive manner across the entire project lifecycle not only for themselves but for other team members.
Setup Project/Team goals: Assign goals at the project level and cascade selectively to team members. Track progress and achievements to recognize and reward teams that meet or exceed expectations.
Encourage transparency: Project team members are permitted to view each other’s goals and encouraged to add notes and comments for everyone including their Team Leader
Enable multiple evaluations: Carry out periodic check-ins in a year for each project the employee works on.
Capture Feedback on Project Manager: Allow team members to give feedback on the project health and their manager and provide suggestions for improvements.
Create Event based evaluations: Automatic creation of an evaluation whenever the employee exits the project, or the project shuts down.
What this will achieve is
- Meaningful Annual Evaluation: Project level evaluations will be automatically aggregated in the annual appraisal process. Thus, enabling the Line Manager to better understand the work done by the employee across the entire appraisal period and
- Give more meaningful feedback,
- Conduct better coaching sessions,
- Create relevant development plans and
- Build deeper insights into employees’ strengths and weaknesses
Higher participation through Gamification: Individuals and project teams can be recognized not only for achieving project (and organization) objectives but also for higher participation, larger number of engagements, better insights, higher customer satisfaction and so on.
Bottoms-up alignment: Instead of top-down goal cascading – which has several challenges once we cross 3 to 4 levels of organization hierarchy, the approach will encourage a bottoms-up goal alignment. Each project can be linked to the organization objectives and a more effective mechanism can be identified for rewarding and recognizing successful project teams.
The above approach for performance evaluations will yield a higher level of satisfaction from a process that has been largely maligned in recent times.
Project-centric evaluations will be the norm moving forward that will be used by all kinds of organizations to have a more meaningful performance management process.
If you are a Project Based organization, and wish to implement performance management process in your organization, then do contact us.
4 thoughts on “Performance Management for Project-Centric Organizations”
Thanks for sharing. It is really informative and helpful blog.
Nice blog. It is really an informative blog. Keep sharing.
Thanks for sharing informative blog
Good post. Performance management in project based organizations is tricky. However, the challenges found in the process can be addressed by following suggestions given in the post.