Why Cargill Is So Good at Performance Management

The firm’s new approach to performance management saw 70% of employees say they felt more valued

It’s not news that most performance management systems and processes are failing, sometimes spectacularly. And, as we covered recently, Microsoft is the latest in a line of big firms to experiment with a new approach.

In general, more and more HR teams have shifted their focus away from performance management systems and towards performance management behaviors.

Cargill’s Need for Change

Agricultural producer and distributor, Cargill, which has one of the world’s most respected management teams, took an approach it called “Everyday Performance Management” as its response to the problem.

Cargill’s senior HR and management team wanted to improve the performance management processes as part of the work on its corporate initiatives: the firm wanted to reinforce what was already a strong culture of valuing employees, it wanted to help employees respond better to rapid changes in the operating environment, and to reduce organizational complexity.

The HR team used employee engagement surveys, historical performance management surveys, and interviews with employees, managers, and leaders globally to understand the current state of performance management.

A Major Disparity

Unfortunately, the research results revealed a major disparity between what the performance management process measured and how it was used, and how employees accomplished their day-to-day work.

The team also learned that managers were reluctant to give candid feedback to employees, and viewed performance management as little more than an administrative drill.

Everyday Performance Management

Cargill founded the Everyday Performance Management process founded on a few core principles:

• Effective performance management is an ongoing process, not an annual meeting and a form to complete.
• Day-to-day activities and practices—not forms and scales—predict performance management quality.
• Employee-manager relationships are at the heart of effective performance management.
• Performance management systems need to be flexible to address different business needs.

In It for the Long Haul

Cargill’s leadership team also recognized that it would take several performance management cycles and a focus on continuous improvement to see the effect on individual and organizational performance.

This is an incredibly important part of the process. Our work over three decades shows again and again the importance of senior leader involvement and their willingness to sustain focus across the long-term to accomplish any major corporate change.

Cargill’s senior management and HR team ensure a sustained focus by:

• Regularly rewarding and recognizing managers who demonstrate good day-to-day performance management practices.
• Documenting the experiences and real-world tips of successful managers.
• Holding teams accountable for practicing day-to-day performance management.
• Building the skills and capabilities needed to succeed at Everyday Performance Management, including effective two-way communication, feedback delivery, and coaching.

Everyday Performance Management is Working

When surveyed about the Everyday Performance Management approach:

• 69% of Cargill employees reported receiving useful development feedback, and
• 70% indicated feeling valued due to ongoing performance discussions with their manager.

The team in charge of the initiative also received a lot of positive qualitative feedback from managers themselves, including:

• “The simplified process made things much easier so we could spend more time on the things that mattered.”
• “I am having more candid discussions during the year, focusing on accomplishments and future plans.”
• “This process has given me more time to spend talking with my people rather than do paperwork.”