A practical look at building and implementing your perfect performance management process.
Have you ever looked up from your day to day and realized there's no rhyme or reason to your performance management process?
Sure, you have all the ratings, weightings and paperwork in place. But what if it all amounts to nothing more than an administrative exercise?
This was the situation Michelle Weitzman-Garcia found herself in when she joined Regeneron Pharmaceuticals in 2015 as Head of Workforce Development. From the get-go, it was painfully clear that Regeneron's performance management system was in need of an upgrade. Managers hated it, and so did employees.
Fast forward to 2018, Michelle and her team have redesigned Regeneron's performance management process and the global biotech company has doubled in size. They have kept pace with that breakneck speed of growth and secured a 92% participation rate in the company's performance management process.
Here's how she did it.
Regeneron Pharmaceuticals develops life-changing medicines for patients with serious diseases. Founded in 1988, the company started with a small team guided by two core principles: hire the smartest people and do great science.
One of Regeneron's largest performance management challenges is that their business units do radically different work.
From drug development, corporate functions and product supply — they needed a flexible performance management system that could match the needs of their diverse workflows. For example, it can take a new drug up to 20 years before it's market-ready, but a marketing and sales plan for the same product might only take a few months to organize.
Each business unit needed its own customized approach. Figuring out what exactly that should look like was the first challenge Michelle faced.
She embarked on a three-year intensive redesign of their entire process, And she started by asking each unit of the business what they thought performance management should be.
One of the first things Michelle learned was that Regeneron's original performance management system was complex and antiquated. Structured around an intricate 12-point rating scale, it was also immensely confusing for managers.
Michelle reduced the rating scale to 4-points to make the process faster and easier. "There's a very strong consideration given to making sure that we're not taking time away from our scientists to do HR things, so that they can spend more time doing science and being more creative," she explains.
Armed with this feedback, Michelle and her team created four different review forms, including a traditional structured form for the R&D team and a 30/30 process (every 30 days employees get 30 minutes of feedback) to completely replace the appraisal process for the product supply team.
In 2016, Michelle and her team eliminated the rating scale for half of the company and each year they continue to scale down. As of today, less than 10% of the company uses ratings.
"The benefit we found of not having a rating is that it opens up more authentic conversations between managers and employees," says Michelle. Regeneron still uses compensation ratings behind the scenes, but they're working to separate that from the performance management process altogether.
Rather than setting corporate and individual goals, managers at Regeneron talk about performance targets in terms of "what you need to accomplish."
According to Michelle, "It's really about teaching them about behaviors and performance. You can't have one without the other." Employees are asked to think not only about what they got done, but also how they got it done it. This shift in focus empowers engaged conversations about employee behavior, rather than focusing exclusively on how much they'll be paid.
Michelle and her team also introduced mid-year calibrations to hone in on performance and behaviors. For this, she uses a 9-box model with Results on one axis and Behaviors on the other. This shows her a full picture of how employees live up to both expectation and goals, all the way from "Exceptional Results, Inconsistent Behaviors" to "Inconsistent Results, Exceptional Behaviors." Behaviors are composed of important competencies and are defined at the local or departmental level.
Regeneron also does an annual calibration and discussion, and employees across departments are offered the chance to participate in voluntary mid-year discussions. Additionally, Michelle implemented a learning and development framework to help give more clarity to an individual's career planning and steer conversations around performance.
In 2016, 92% of Regeneron's employees were participating in the performance management process.
So, would Michelle's approach work for you?
The answer is probably yes. A bespoke performance management approach can do wonders for employee participation and engagement. But it's important to remember, change doesn’t happen overnight. And your managers and employees won’t thank you for rushing through a new process, only to discover a few months later it’s actually created more work.
If your goal is to abandon the old ways and create a custom-fit process that works, the unsexy truth is that it will take time. By allowing themselves three years to implement a new performance structure, Regeneron took the time they needed to do three core key things.
And they haven’t stopped. Regeneron's process will continue to evolve, just as the company does.
Regeneron is not the only organization going its own way. These days most great organizations are thinking critically about performance management and coming up with innovative new solutions. Here are a few more examples to help inspire your own strategy.
And if you're ready to take the next step, check out our guide to creating your own modern performance management process.
Performance management is considered a distraction. We can change this by designing our performance management processes for our employees.
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