March 12, 2019

How to Cultivate Workplace Innovation Through Smarter Performance Management


It is easy to see why companies the world over are concerned with cultivating innovation. More innovative workplaces enjoy higher levels of productivity, they are better able to solve even the most daunting problems, and they tend to have an edge over their less innovative competition in terms of market performance.

Innovation starts with hiring the right people, but it doesn’t end there. By implementing certain performance management processes and policies, HR pros and business leaders can help foster further innovation in their organizations.

Understanding Workplace Innovation

Before outlining the steps organizational leaders can take to support increased innovation, it’s important to first ensure we’re all on the same page when it comes to understanding what innovation is.

To quote researchers Peter Totterdill and Rosemary Exton, workplace innovation involves “employees at all levels changing the way that organizations manage, organize, and deploy people, technology, and other resources. Aligned with an organization’s strategic goals, [innovation] enables the improvement and renewal of products, services, and processes on an almost continuous basis.”

Put simply, innovation is the quest for continuous organizational improvement and advancement through creative thinking.

That said, there is a difference between creativity and innovation. Creativity is subjective; it is the ability of an individual person to conceive of new ideas. Innovation, on the other hand, is the application of creativity to create new solutions to difficult challenges. As Andrew C. Marshall writes for Business Insider, “Innovation is about introducing change into relatively stable systems. … By identifying an unrecognized and unmet need, an organization can use innovation to apply its creative resources to design an appropriate solution and reap a return on its investment.”

6 Ways to Foster Innovation Through Performance Management

Performance management systems should concern themselves with chasing innovation, not creativity. They can do this in the following ways:

1. Accommodate Different Ways of Working

If you want to encourage the flow of creativity and innovation, begin by constructing a relaxed and flexible work environment that accommodates many different ways of thinking and working. Company leaders can introduce flexible work to their organizations in a number of ways; remote work arrangements, job sharing, and employee ownership over SMART objectives are just three examples.

Not only does a flexible environment promote more creative thinking, but it also encourages employees to tackle tough company problems through innovation. After all, when your company accommodates employees’ needs, your workers are more likely to feel invested in your organization’s success.

Innovation cannot flourish if employees feel obsessively micromanaged. Take a step back and let your employees do their own thinking. You may be amazed at what they achieve.

2. Embrace Diversity

Group innovation requires input from a number of different people with a variety of backgrounds, strengths, experiences, passions, capabilities, and perspectives. Diversity begins with recruiting, of course, but you can help employees play to their strengths through performance management. You can also give employees the tools and support they need to develop as professionals, which will help them grow into dynamic team members who can confidently speak up to share their ideas and suggestions with the organization.

3. Encourage Employees to Take Breaks

Overworked employees don’t have the energy to be creative and innovative; they barely have the energy to make it to the end of the day.

Performance management is all about encouraging employees to operate at their best, and an employee needs to step away from the desk occasionally if they are to perform at the top of their game. Rest and relaxation aren’t just nice — they’re necessities.

Keep an eye out for workaholics and perfectionists, and encourage them to take time away from their computers during their lunch breaks. Be lax about water-cooler discussions — you never know what kinds of innovation those interactions might spark. Make sure your employees take vacations to rest up and recharge. A revitalized, energized, and enthusiastic workforce is a breeding ground for good ideas.

4. Take Employee Feedback Seriously

A lot of organizations say they’re open to feedback, and many even give employees a way to provide it — but how many companies actually put employee feedback into action?

Don’t simply pay lip service to employee feedback. Keep your ears and mind open to good ideas. Rather than shooting them down right away, implement your employees’ ideas and see how they pan out. You might be surprised at the results. What’s more, your employees will see that innovation is valued and rewarded, which will further motivate them to apply their creativity to solving difficult problems.

5. Give Employees Time for Their Own Creative Solo Projects

If you want to show your employees you genuinely care about innovation, allocate them a certain amount of time every day, week, or month to explore solo projects that stand to benefit the company. Your employees might end up solving pressing business problems, streamlining processes, or inventing lucrative new services.

6. Prioritize Transparency

If you want your employees to solve complex business problems in creative ways, you must first give them a reason to care about those business problems.

One way to do this is to prioritize transparency within your company. Let employees know about your company’s direction and objectives, and share information about roadblocks and obstacles with them. If employees are aware of problems and understand the context of these issues, they’ll be both more inclined to help and better positioned to offer effective assistance.

Stuart Hearn is CEO of Clear Review.

Read more in Performance Management

Stuart Hearn has 20 years of experience in the HR sector. He cofounded plusHR, a leading UK HR consultancy, and previously worked as international HR director for Sony Music Publishing. Stuart is currently CEO of Clear Review, an innovative performance management software system.