Research suggests that the perceptions and challenges most often cited regarding performance management (PM) in both the pre- and post-COVID era are largely unchanged:
- The traditional once-a-year or semi-annual anxiety-inducing exercise isn’t all that constructive (workers prefer and appreciate frequent candid feedback discussions).
- While workers want regular performance feedback, in general, many don’t believe that their managers have a realistic grasp on the performance of their direct reports and that all too often, performance assessments are subjective and even arbitrary.
- More than half (55%) of workers say annual reviews do not improve their performance according to a 2019 study conducted by Workhuman*
With the massive migration from the office to WFH, focus has been on simplifying PM approaches and looking at tech solutions to help with this as well as a shift to looking at PM as an element of employee experience. In a literature review of recent publishing on performance management, the word we saw consistently in nearly every piece is: “rethinking.”
We expect to see wider adoption of tools that continuously gather employee feedback and enable managers to work collaboratively with employees to set development goals and objectives that clearly connect those individual intentions to the strategic goals of the company, reinforcing universally shared goals and objectives.
Following is a sampling of resources pulled by the i4cp research team from articles published across various global regions and industries in the past 12 months from credible sources (excluding vendors and consultants):
Rethinking Performance Management for Post-Pandemic Success (MIT Sloan Management Review)
Excerpt: Recalibrating key performance indicators (KPIs) is essential to ensuring that remote work actually works. Enterprises that want the best from their workers — and for their customers — innovatively invest in digital accountability, but these efforts must acknowledge and respect newly blurred distinctions between work and home life. Digitally colonizing people’s homes is not an option; workforce mood and morale matter. Thoughtful leaders grasp the need for a healthy coexistence.
Performance Management in 2021 and What We Learnt in 2020 (The HR Director)
Excerpt: In a recent performance management report, the question is posited: ‘What if performance management was seen as an essential tool for employee engagement? A shift to this mindset would change both the overall performance management process and how performance conversations are approached.’ Organisations may have inadvertently taken a leap forward in using performance management as an engagement tool this year. As employers looked for ways to connect with their home/remote working employees, some organised more check-in calls. Replacing the ‘water cooler’ moments and simply seeing an employee at their desk, a lot of these calls have been more work focused (calls are generally scheduled with a purpose), so performance management and employee engagement has become more intertwined.
It’s Time to Rethink Work for the COVID-19 Era—Performance Management is the First Step (Fast Company)
Excerpt: As an industry almost entirely dependent on its ability to recruit and retain the best talent, tech has been at the forefront of many innovations in talent management. Companies like Netflix, Google, and Facebook have implemented a large number of initiatives, including constant feedback, the “Keeper Test” (where a manager is asked, “Would you fight to keep that employee?”), the separation of performance review and salary discussions, and peer reviews.
Excerpt: As the yearly ritual of performance evaluation comes up next month, we look at various ways in which HR should accommodate the new normal. In place of having a ratings-based system for the entire team, one would do well to reserve this system for top performers and laggards only. Not surprisingly, majority of the team falls in between these extremes. Instead of ‘wasting time & efforts’ ranking miniscule deviations, HR must focus on developing core strengths of this corpus. Similarly, companies should move towards an ‘outcome-based’ approach instead of scrutinizing the processes. Adopting an outcome-oriented Objective & Key Results (OKR) based performance system provides more autonomy to employees working remotely while holding them accountable for their performances.
The Pandemic Changed How We Evaluate Success. This is Which Expectations to Stick With (Fast Company)
Excerpt: Rather than fixating on certain metrics, look at your team’s
approaches to communication and complex thinking processes. Goal-setting looks
very different now than it did before the pandemic. Rather than trying to stick
to fixed goals that are discussed at annual reviews and then forgotten,
managers and teams should start thinking of goals as fluid, updating them on a
weekly or even real-time basis. The workplace management team at Gallup
emphasizes the importance of an “agile mindset,” which encourages teams not
just to expect change, but anticipate it. Ben Wigert and Heather Barrett write “managers should be given the expectation,
authority, and flexibility to tailor goal-setting to the team and the
individual as their work changes.”
Excerpt: Many organizations are curtailing or even abandoning performance management because of difficulties measuring performance and disruptions in performance-based pay due to the COVID-19 crisis. Contrary to this growing and troubling trend, we argue that it is especially important during the crisis to not only continue but also strengthen performance management to communicate a firm’s strategic direction, collect valuable business data, provide critical feedback to individuals and workgroups, protect organizations from legal risks, and retain top talent. To do so, we offer a solution to overcome the challenges associated with measuring performance during a crisis. Specifically, we extend and expand upon the well-established Net Promoter Score measure in marketing and introduce the Performance Promoter Score (PPS) to measure performance.
FY21 Performance Management Update (Harvard University)
Excerpt: The University's approach to performance management is based on the understanding that regular, meaningful conversations between managers and employees lead to better results and higher engagement for everyone. All administrative/professional and support staff at Harvard are encouraged to meet with their managers as frequently as they choose to discuss their work priorities, performance, and developmental needs and aspirations. Managers are expected to proactively schedule and structure these meetings throughout the year to minimize the stress associated with one-time, high stakes, end-of-year performance appraisals.
Excerpt: Annual appraisals are falling out of favor as companies open lines of communication and provide regular feedback and coaching to workers. Evidence is growing that organizations are getting better at recognizing and valuing staff members, with the approach shifting in two significant ways, according to Kyle Brost, chief executive officer at Spark Policy Institute, a Denver-based business consultancy that specializes in corporate employee engagement tools and strategies.
"First, leaders are looking for more ways to use data," Brost says. "Feedback can be very subjective and lack context. For this reason, leaders are turning to more data sources to inform feedback."
That approach offers several advantages. "Data emphasizes both individual contributions and organizational processes that are working, along with any misalignments between the two," Brost says. "Additionally, the sources and means for collecting this data are becoming increasingly accessible, human-centered and user-friendly." For example, data software packages such as 7Geese, Bamboo HR, CRG emPerform, Officevibe and Saba Cloud all have tools to help managers provide feedback on a regular, year-round basis.
Excerpt: It is no surprise that employee stress and anxiety are hitting all-time highs amid the pandemic. Ongoing uncertainty coupled with complex family needs and potential financial strain presents a unique challenge for everyone. Recent research from SHRM highlights that work-related concerns have left more than 40 percent of employees feeling burned out.
Are Peer Reviews the Future of Performance Evaluations? (Harvard Business Review)
Excerpt: The future of the performance review has been written about, researched, and debated for years — but it’s still broken and has become a political and bureaucratic battlefield. It’s time for organizations to develop new models, especially amid the rise of agile and self-managing teams. The opportunity to create a socially-based feedback system feels even more urgent during the COVID-19 crisis since many people are working remotely and without the same level of daily interactions with managers. A social feedback system provides the employee a larger amount of feedback (often 50 or more instances over the course of a year) from peers and others. This reduces the emphasis on receiving feedback from the employee’s manager alone.
5 Trends Shaping the Future of Performance Management: A PeopleStrong Survey Report (CISION PR Newswire)
Trend #1: Mentorship Culture, For The Future
- 75% Senior HR Managers from the respondent group agree that collaboration, constant communication and a mentorship culture between managers and teams will become the future mandate of a high performing workplace
Trend #2: Driving Growth Mindset
- Growth focused sentiment currently runs high amongst manufacturing industry, as they have been impacted by lockdowns the most. Respondents perceive that product innovation with faster execution will be the elixir that will keep them forward in already competitive marketplace
- Companies are getting market ready to ride the next wave of change. It is of utmost importance to create a growth mindset withing employees and amongst teams
Trend #3: Collaboration Is The Key
- When asked about enhancing output efficiency, 42.86% of the respondents from the manufacturing industry responded that a well synchronized network of teams would be the best approach in the future. Followed by IT/ITES industry.
- The traditional workplace models, Work From Home concept is here to stay longer than expected. It is visible from the above table, industries which never thought of such practice are more inclined to adopt them
Trend #4: Outcome Oriented, To Remain Relevant
- Focus on outcome rather than the process is slowly taking over organizational ideologies as enterprises are rooting for objectivity and looking beyond a simple checklist
Trend #5: Industries Have Different Focus In The Next 3 to 5 Years
- BFSI - 83% Of the survey respondents feel that the industry should start focusing on a mentorship culture, where constant exchange of feedback is the key
- Retail- 79% Of the survey respondents feel that the industry should start focusing on a mentorship culture, where constant exchange of feedback is the key
- Pharma/Healthcare- 72% Of the pharma/healthcare industry is highly focused on being agile and fail fast, as innovation in terms of products and services is crucial in the current scenario
- Logistics- 65% Of the respondents believe the logistics industry is bracing up for a major overhaul due to the pandemic, thus are leaning towards HRTech advancements that increase productivity by minimizing time, cost and errors.
- Education Services- 60% Of the survey respondents feel that they need to reimagine their current products/services and have the ability to launch them at a faster pace
- Internet Business/ IT- 57% Of the survey respondents perceive collaboration being the key to higher output, as most of the employees follow WFH model
- Manufacturing- 54% Of the survey respondents perceive collaboration being the key to higher output, as most of the employees follow WFH model
Excerpt: Betterworks, the leading enterprise HR software for OKRs and Continuous Performance Management, today released its second report based on insights from its 2019-2020 State of Continuous Performance Management Survey. This report found a critical disconnect between HR leaders and managers, specifically around the desired outcomes of their company’s performance management programs, and this puts the business at risk.
- “Our survey found that many managers view their company’s current performance processes as outdated and more of a hindrance than a help. Outdated HR processes built to measure and change performance management aren't working, so businesses are focusing on improving goal alignment which can have a bigger impact on top-line company growth,” said Doug Dennerline, chief executive officer at Betterworks. “Overwhelmingly, the people managers that responded to our survey want to increase how often employee goals are set and aligned with top company goals. When business environments move this quickly, workforce agility is key.”