Leon Jacob: The energy industry is influenced by numerous trends: from renewables, virtual power plants to e-mobility. The challenge is to reconcile all these trends without overextending the organization by doing so.
Jan Dörrwächter: Two energy worlds have emerged in Germany in the last five years: the conventional and the new one. The conventional energy world is characterized by high system orientation, a global or regional perspective and large and central facilities. Meanwhile, the focus in the new world is on green and clean technologies.
Leon Jacob: Smaller, decentralized solutions are also offered wherein high value is placed on the local proximity to the customer and customer focus.
Jan Dörrwächter: The changes to the business world have a significant influence on HR and indeed over the entire field. Both employee development, feedback interviews and also remuneration must be flexibly adapted to the employees’ and organization's requirements. A real challenge for HR!
Leon Jacob: We are seeing clear differences between the requirements of the old and new energy world precisely for the case of performance management. This is also reflected in the expectations on the employees. In the new energy world, employees are required to develop and implement the alternative, customer-focused energy services. This requires a different mentality than the continuously smooth operation of power plants and networks.
How can performance management contribute to successfully mastering the challenges in the energy industry?
Jan Dörrwächter: The original purpose of performance management remains the same: to improve the performance of the employees. However, nowadays this is no longer only done using a traditional, annual process. In order to be able to keep up with the significant changes in the energy industry, a portfolio of performance management instruments is required which can be used at any time when needed. This applies for example to the option of providing feedback.
Leon Jacob: Each instrument can thereby be tailored to a certain facet of performance management, e.g. to enable company-wide feedback using a dedicated app or to specify and discuss common goals with team workshops. When designing the instruments there is no either-or-decision between a traditional and innovative approach. A good fit with the goals of the organization is what is important and appropriate.
Leon Jacob: Absolutely! Those companies who are particularly successful are the ones who can make performance management more than an administrative process. Each individual manager and employee can contribute to a culture of constant feedback and performance improvement through their own behavior.
Leon Jacob: All too often do companies try to improve their performance management without analyzing its key assumptions. Optimization efforts are frequently aimed at what other organizations are doing. Ultimately, in the worst case, a dysfunctional monster has been created from best practices.
Jan Dörrwächter: Checking the key assumptions is essential! Even if a performance management approach was appropriate five years ago, it does not still have to be applicable today. Lastly, the social and company ecosystems are also changing.
Jan Dörrwächter: In any case, some of them currently operate business models which are notably smaller-sized and more complex overall than was the case only a short while ago. The use of IT is playing an increasingly more important role.
Leon Jacob: But there are also huge changes in the conventional energy world, for example strong competition faced by conventional power generation due to renewable energies. This increases the requirements on the adaptability of organizations and employees. Before organizations adapt their systems, they must therefore first ask what goals they are pursuing with their performance management.
What should companies be taking into account when they adapt their performance management?
Jan Dörrwächter: In our projects, we firstly deal with what attitude and objective forms the basis of performance management. Companies should ask themselves what they understand by good and very good performance and what goals they are pursuing with their performance management system. These goals should then be prioritized.
Leon Jacob: In the next step, we work towards an appropriate solution with the involvement of management and employees. The key word here is “Employee Experience Design”.
Leon Jacob: Why not? At the end of the day, performance management is not only a process, but an experience. Using prototypes, new ideas can be developed, tested and selected within a very short time. Finally, piloting follows and, with positive feedback, the roll out of the new approach.
Leon Jacob: Implementation is not just an adaptation of the prevailing process, but rather a profound change. The right communicative support and measures to enable the users, the employees and management, is required.
Jan Dörrwächter: People must be led away from their beliefs in order to make a process commonplace. A changed attitude towards performance management is needed which is: I’m happy to do it because it is important and helps us as a team to achieve more together!