Share this article
Organisational performance management is a crucial aspect of sustaining success, typically encompassing performance planning, appraisal, and improvement phases.
In the ever-changing landscape of today’s organisations, the need to adapt to the changes is evident. Despite this, many organisations still view performance management as a periodic and often dissatisfying process.
Table of Contents
ToggleCurrent challenges
For many organisations, performance management is still a quarterly, half-yearly, or annual mundane process – replete with goal-setting, monitoring an employee’s goal-achievement, sharing feedback about the employee’s performance, and then rewarding/penalising the performance. And in most cases, this process turns out to be a source of absolute employee dissatisfaction.
A McKinsey survey (Figure 1) reveals that 54% of respondents believe traditional performance management systems have not positively impacted performance.
Figure 1: Survey by McKinsey
Top trends in performance management
As we live in the era of hybrid work models, it’s imperative to explore the top trends shaping the future of performance management.
1. Impact Of Hybrid Work
The traditional 9-to-5 office structure is giving way to a more flexible and dynamic hybrid work environment. The rise of remote work has necessitated a reevaluation of performance management strategies. Managers now face the challenge of effectively evaluating and motivating teams spread across different locations and time zones.
In response to this, modern organisations are embracing technology to create seamless collaboration and communication channels. Virtual meetings, project management tools, and performance-tracking software have become essential in ensuring that teams remain connected and aligned despite physical distances.
2. Use Real-time Performance Data
Gone are the days of annual performance reviews as the sole metric for employee evaluation. The shift towards real-time performance data is a game-changer in the world of performance management. Thanks to advanced analytics and AI-powered tools, managers can now access real-time data on individual and team performance.
Real-time data not only enables more accurate evaluations but also empowers organisations to make better-informed decisions. This trend emphasises the importance of staying agile and responsive to the ever-changing dynamics of the business landscape.
3. Ensure Continuous Feedback And Check-Ins
The days of waiting for the annual performance review to provide feedback are long gone. Continuous feedback and regular check-ins have become integral to fostering employee growth and development. These ongoing conversations between managers and employees facilitate a more transparent and collaborative work environment.
Regular feedback allows for timely recognition of achievements, identification of areas for improvement, and the adjustment of goals as needed. This trend aligns with the evolving expectations of employees who seek more immediate and actionable feedback to enhance their performance.
5 effective ways to track employee performance
Performance management systems are beneficial in managing employee progress and performance in relation to organisational goals. These tools enable managers to conduct periodic performance reviews, maintain a record of discussions, and provide feedback.
Some examples of leading performance management systems are BambooHR, Paylocity, factoHR, HROne, Talentguard, Zoho People, PerformYard, etc.
Reinventing performance management: Some examples
So how do great places to work reinvent themselves? Here are a select few examples, which are worth reading and inspire you to try in your own companies:
Netflix
Here’s a company that ditched the annual performance management reviews. So how does feedback reach the employees? Simple and straight and from all around in the most informal manner – employees get to hear what they must stop, start or continue from their colleagues.
Read that again – employees get to hear something most performance management reviews miss out on – praise for work done right!
Google has been listed as a Great Place to Work, officially. And Google has been time and again lauded for its intensive commitment to employee satisfaction. So Google believes in appointing a system of peer reviewers for an employee and has given up on any numerical ratings.
They operate on a five-point scale ranging from ‘needs improvement’ to ‘superb’. So let’s get that again – the focus is on what the employee has accomplished in the best possible way to what could be done in a better way!
The two-factor theory came out with that finding many years back and Google seems to apply it in the best possible way – that positive reinforcement and feedback are very important in motivating employees to perform better – much higher than money can bring in.
Learnings from new-age organisations
Google and Netflix are new-age organisations. And they have known that it is absolutely vital to retain their most creative and talented employees.
Netflix and Google’s strategies highlight the importance of positive reinforcement, continuous feedback, and employee engagement in motivating high performance.
Contrast with traditional approaches
In contrast, other bigger and more traditional giants like Amazon face one of the highest attrition rates in the industry. One major reason attributed is the much-abhorred feedback culture that exists in Amazon, which sees only the negatives of an employee and undermines their work.
Companies like GE used to be widely notorious for the same and embraced the ‘rank and yank’ culture. Years later, GE had to adapt to changing norms.
Summary
To summarise, in the current business world, managers will be more likely to succeed if they:
- Embrace flexibility to cater to the diverse needs of employees.
- Consider communication as a collaborative process that transcends hierarchical structures.
- Recognise the significance of data and employee satisfaction
Effective performance management processes should foster growth, reinforce organisational culture, and lead to sustainable high performance. Organisations need to evaluate their systems to identify shortcomings and enhance motivation to achieve these goals.
Want to manage your organisation more efficiently? Equip yourself with an Executive MBA in Project Management and enhance your credentials. A Unique Dual Certification MBA Program from Europe and the UK. Join today!
References
- https://www.etsplc.com/blog/netflix-and-accenture-have-reappraised-performance-appraisals-have-you/
- https://corporate-rebels.com/annual-performance-reviews/
- https://blog.impraise.com/360-feedback/performance-management-at-google-360-feedback
- https://blog.impraise.com/360-feedback/the-amazon-controversy-what-is-missing-in-its-performance-management-360-feedback
- https://managementhelp.org/organizationalperformance/index.htm
- https://www.cognology.com.au/can-netflix-hubspot-zappos-google-teach-future-performance-management/