Next Shift in Performance Management | McKinsey

Teamwork and collaboration (T&C) are hallmarks of many high-performing cultures. Although continually crucial to organizational effectiveness and performance, T&C is even more vital in today’s workplace, given the prevalence of matrixed structures and cross-functional teams that operate as part of larger networks that work on shared goals to achieve shared results. One potential enabler of T&C is performance management (PM). And while PM is an enabler, many organizations are still figuring out how to shift their PM approaches from individual to team-focused. This article by McKinsey provides a few PM practices that can foster team-based PM, including 1) team-based goals, 2) team appraisals–where the output and impact of the team is the focal point versus individual contributions, 3) team development in which the emphasis is not only on behaviors desired of individuals but also of teams. 4) Rewards and recognition based on what the team accomplishes. 5) Team-based culture – where leaders role model the importance of working as “one” team regardless of function/ business/ geography. Team-based PM has many benefits, however, organizations should consider how to overcome some of the challenges such as a) addressing team members who underperform on team objectives, b) top performers who prefer to have individual incentives, to name a few. Given these challenges, organizations can start by asking: what challenges would we have to overcome in order to implement a team-based PM approach and what are some tactics for doing? For other current thinking on PM, you can read the new book: Performance Management Transformation: Lessons Learned and Next Steps.