Why Are We Still Separating Learning and Performance Management Systems?

This article first appeared on Acorn Labs in May 2024.

For a more in-depth look at performance management systems, have a read of the full article.

A performance management system is a structured process that helps organizations monitor, evaluate, and improve employee performance. It’s a platform covering a range of performance initiatives, including aligning team goals with organizational objectives, providing feedback and coaching, and recognizing and rewarding achievements.

Why learning and performance management shouldn’t be separate

Traditionally, performance management and learning management have been separate initiatives. The only problem is most people will tell you that performance management as it stands is broken, doesn’t work, and has no impact.

When learning and performance are siloed, you’re actively hindering performance improvement and business success. For example, there’s a significant overlap between learning and performance data, and if you have two separate systems then you also get duplicated data that doesn’t interact with each other. It’s a waste of time and resources that prevent you from aligning goals with development opportunities that will impact business performance.

When goals and development aren’t aligned then employees don’t get targeted training, and that just means they won’t be closing capability gaps that pose risks to the business. Not only that, but employees want their organizations to care about their development, so if they don’t get that, they’re more likely to leave.

Capability and competency-based performance management

Capabilities are the skills, knowledge, behaviors, processes, and tools that combine to deliver organizational outcomes. When capabilities are mastered, business goals are achieved, which is why capability-driven performance management is so important—it outlines business and role-specific capabilities that the organization and its workforce need to succeed, and comes with ready-made competencies to measure them.

How to implement capability-based performance management

There are four key strategies for implementing capability-driven employee performance management.

1. Evaluate current systems and processes

Find which areas in your current performance management process can be integrated with capability-driven performance by:

• Assessing the current performance management system to understand how it evaluates employee performance. Does it provide capability assessments, or is it focused on output and results? Results-oriented performance management is a good place to integrate capabilities.
• Analyzing current processes to identify bottlenecks and redundancies where processes fail to add value to determine how effective the processes are and where capabilities can be integrated. Derive goals from capabilities so that employee goals progress capability improvement.
• Identifying process gaps to find where current processes fail to support the assessment and development of key capabilities, or where performance data is misaligned with capability development goals.

2. Selected a capability-based technology system

Traditional performance management systems (PMS) aren’t capability-based systems because they approach performance management as a way to track past performance, rather than as a way to provide employee development. It’s more performance review software than performance development software.

• Performance learning management systems (PLMS) focus on performance and development in the same conversation, which capabilities (and their assigned competencies) are part of. They identify capabilities needing development and assign relevant, targeted training.
• Momentum takes the manual guesswork and labor out of performance appraisals by automating and centralizing goal setting and review management. All learning and performance data is kept in one central location to enable data sharing.

3. Align goals and capabilities

Understand your core capabilities, because these are the capabilities that are crucial for achieving organizational goals. To define key capabilities, understand:

1. The business’s long-term strategy, mission, values, and how the capability fits into that.
2. The purpose of the capability in the market and organization. Is there demand for it? Does it complement or conflict with current organizational capabilities?
3. What outcome you want to see from the capability—name it accordingly so it’s clear what it’s about at a glance.

4. Provide targeted training and support

Use a training needs analysis to assess current and future capabilities, the gaps between the two, and the best training method to close those gaps. Just remember that providing training alone isn’t enough to guarantee knowledge retention. Provide continuous feedback, regular check-ins and one-on-ones between employees and managers, and ongoing development opportunities to reinforce the changes in employee behavior and actions that drive performance improvement.