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The Past Couple Of Years Have Seen An Enormous Amount Of Discussion Around Performance Management.
There were numerous conversations and debates around organizations across the globe debunking the age old and traditional annual performance reviews and following the paths of category leaders like GE, Adobe, IBM and the like.Discussions revolved around how performance management needs to be a continuous process, with no surprises along numerical rankings for employees on an annual basis. The preferences are changing as are the employees at work.
It is clear that companies who participate in and embrace these changes are the ones which are going to benefit from this revolution. Only this can help employers keep their employees motivated and engaged and also retain the best of talent. At the same time, it has also been realized that performance reviews are not going to die.
A recent global research by CEB which surveyed more than 9000 managers and employees across 18 countries found that not having evaluations is actually worse. The survey found that by eliminating performance reviews, the overall results and productivity can drop significantly, by up to 10%. This can make employees much more likely to leave the company.
With such new developments taking place, here is a summary of the most important trends in performance management that HR experts believe will dominate the future:
1. Reinventing The Annual Review Cycle
Even though the wave is around phasing out of the annual review cycle, there are many organizations across the world that are still deciding on adopting a more flexible and continuous approach to performance management. They are still not convinced of debunking something that has been going on for generations or adopting completely new technology that helps track performance. At the same time, organizations have also done surveys which bring about interesting trends on what is actually desired by employees.
For example, Facebook analyzed its performance management system by conducting focus group discussions and a follow-up survey with more than 300 people. These initiatives revealed that – 87% of employees wanted to keep performance ratings. On the other hand, Accenture only had the rating numbers hidden from the employees, but they had managers using the ratings internally for compensation planning purposes.
Hence, the new system is not the complete abandonment of ratings. Instead, it will identify new ways of making performance reviews a continuous and transparent process, without letting go of reviews. The wisdom of 2023 is to use modern performance practices for focusing on employee learning and growth, while also keeping the scope traditional reviews open.
2. Coaching And Personal Development
The whole idea of performance management will also focus on helping employees get access to resources and mentors to help them give their best. Assigning a number as a rank once at the end of each year does not really help anyone grow. Instead, in most cases, it ends up demotivating employees and turns annual cycles into a scary affair.
The future will also witness performance management systems placing more emphasis on personal and career development. With millennials going to constitute more than 50% of the active workforce by 2023, HR leaders need to engage in activities that help motivate and empower employees to keep working harder. Training, development, coaching and constant feedback are going to assume topmost priority in organizations.
3. Feedback Will Gain Momentum
Companies with highly engaged employees outperform the competition by 147%.
~ Gallup
To keep employees engaged, interacting with them on a regular basis and making them feel important is of utmost importance. All businesses have always relied on big data to make strategic decisions that impact revenues. In 2023, this is going to shift inward as employee feedback is going to get viral attention. The trend has already started.
Businesses will be found investing in tools that help them capture feedback of employees around various issues and companies can use the data to gain insights into making decisions. Feedback tools will help capture manager feedback on a regular basis, employee feedback on various issues as well as peer to peer feedback.
4. Professional Training Is Going To Be Paramount
In today’s competitive and highly technical job environment, being updated about everything that is changing so rapidly around is the least we can do for better career opportunities. Perhaps this is why Generation Y want their companies to help them grow. In fact, 87% of them state professional or career growth and development opportunities as a critical aspect when they look for a job.
Hence, training and investing in their professional development could be a major way in which organizations can help retain their talent – by helping them grow. Giving access to a wide pool of knowledge and using mobile learning as a strategy will see a rise. Classroom training courses will see a decline and a replacement with anytime, anywhere learning on mobile devices.
5. More Transparency
64% of employees believe their company leaders aren’t transparent about their goals. – BetterWorks
We live in a world where a prospective candidate can check the reviews of an organization before joining it and make a decision accordingly. Nothing can be hidden as reviews exist for everything and one small mistake can cost organizations heavily. Being transparent is what is valued today by employees as it is seen as a sign of trust.
The same will be true while setting goals for performance management. There will be open communication on what is expected and leadership needs to transparent in spreading this message among employees. Hence, organizations will focus on telling employees how important their individual and team contributions are and what it can potentially mean to employees.
6. Rise Of Performance Management Tools
Making sure all of the above is achieved is not going to be easy on a manual basis. Organizations are looking for software that can help them set achievable and ongoing goals, provide regular feedback as well as that empowers employees to keep learning. This year will see organizations adopting performance management tools that enable employees to receive and request feedback in real time, send automated reminders for regular check-ins with managers, chat features and peer to peer interaction. All the data can be captured to make decisions that impact businesses and give a clear view of what is it that employees want.
The coming years will see organizations adopting performance management tools that enable employees to receive and request feedback in real time, send automated reminders for regular check-ins with managers, chat features and peer to peer interaction. All the data can be captured to make decisions that impact businesses and give a clear view of what is it that employees want.
