Article: Want better performance? Decouple goals and bonuses

Strategic HR

Want better performance? Decouple goals and bonuses

It might sound unintuitive, but in fact pegging compensation to pre-set metrics is counterproductive, says Stuart Robertson, Chief People Officer at AvePoint. He tells People Matters why.
Want better performance? Decouple goals and bonuses

The HR team at SaaS solutions firm AvePoint is done with the old-school performance management approach of bonuses and pre-calculated goals. Instead, they're implementing an OKR framework based on 90-day increments and aligning teams to shared goals at the executive level – turning productivity and performance into a live, moving framework that's much more conducive to teamwork and business agility.

“Today, companies are more interested in setting stretch goals that can yield disruptive growth rather than incremental growth and focusing the performance discussion on enabling this future growth in the context of a team, rather than as individuals,” says Stuart Robertson, AvePoint's Chief People Officer. “With collaboration and diversity being key factors in a thriving workforce, it is impossible to measure one’s performance without the consideration of a broader picture.”

Robertson is not fond of the incremental style that was prevalent just 10 years ago – overly bureaucratic and time-consuming, he calls it, involving thousands of hours of management time and providing little differentiation between actual performance. “Furthermore, it was heavily metric-based, pre-negotiated at the start of the performance year and solely focused on the individual employees’ ability to exceed the targets they had agreed on,” he says.

“Only by decoupling the hard-coded link between goals and bonus payments can we truly set aspirational goals and drive greater performance.”

A better approach to performance in the hybrid model

The need to move away from individual metrics and towards shared, company-wide goals is particularly relevant as more and more businesses adopt the hybrid or even fully remote working model, especially for global teams that communicate almost exclusively remotely. In this model, the whole concept of productivity as we currently perceive it is outdated, Robertson believes:

“Productivity can be ultimately a lagging indicator – Did a person produce effectively and efficiently?” he points out. Instead of focusing on productivity, he thinks companies need to take a more forward-looking approach, one that's about enabling people to do their jobs better in the immediate or longer-term future.

As an example of how this approach can work out, he offers AvePoint's own strategy, which comprises four pillars of empathy, purpose, clarity and technology – and no particular allusion to productivity.

“We focus more on engaging and collaborating with our teams in an open and honest way,” he says. “Firstly, by truly understanding them, their challenges, and their circumstances to meet their needs where they are at. Secondly, to ensure each person understands how their role fits into the overall mission of the company – to enable organisations to collaborate with confidence. Thirdly, to provide clarity on specific objectives. Fourth, we can employ the full power of our own collaboration technology to communicate, work on things remotely in real time, host meetings that combine groups in a room and remote attendees, and much more.”

If there is a challenge to actually turning these ideals into tangible business performance, it most likely comes from an incomplete view of remote work, Robertson feels.

“People often think about remote work as using ‘hard skills’ and in-person work as using ‘soft skills’. I think this is only part of the picture,” he says. 

“Ultimately it comes down to working where, when, and how it makes sense."

"For years, companies would go offsite if they needed to do strategic planning. This is saying that the office is for more routine work. Today, that has flipped. Routine work can be done, anywhere, and anytime. In-person work is all about collaboration, sharing, planning, team building, bonding, debating, resolving conflict etc.

In other words, performance in the hybrid or fully remote model is about matching the type of work to the appropriate milieu – something that would not even be an option, let alone a consideration, in the 100% on-site model.

The important thing, he adds, is that there is no one size fits all policy – it depends very much on what is needed at a particular time and for a particular purpose, and both individuals and the company have to be open to recognising this and adjusting accordingly.

The supporting factors: upskilling and technology

A few areas are critical to performance management strategies for the hybrid or remote model. One is upskilling, the buzzword of recent years that is more frequently associated with learning digital skills today.

“Teams that focus on and support talent development and upskilling programmes will rise above competition to increase productivity and workforce agility to address dynamic business opportunities.”

And this is not just about 'hard' digital skills as they are commonly conceived, but about the 'soft' skills that allow people to not just use the technology, but use it effectively. It's about recognising the key competencies for a given job, and the capabilities that those competencies involve.

“For example, sales and digital transformation consultancy is a key competency across AvePoint’s global teams. To hone our sales force’s capabilities to engage in compelling discovery conversations with our clients, we have curated a custom course for all of them to learn and practice how to carry effective value-driven conversations with the modern buyer,” he says.

If the right focus areas have been identified, the outcomes can be clearly measured. In Robertson's example, AvePoint's sales teams have been tracking client response, and 90% of those who took the course have reported more positive client engagement outcomes.

Finally, there's the technology itself, the inescapable fundamental of today's workplace. The bottom line is that technology is what allows a business to adapt to a hybrid or remote-appropriate performance model, he says.

“Through technology, data-powered insights will be driving the evaluation of productivity and performance, especially in a hybrid work environment against a clear set of shared priorities and metrics. Companies that are able to manage and utilise these data insights and effectively create employee engagement, empowerment and development programmes will be best able to adapt well to evaluating productivity and performance remotely.”

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Topics: Strategic HR, Performance Management, #PerformanceBeyondProductivity

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