A Closer Look at Performance Management in the New Work Environment
In the last decade, new organizational models with greater geographical distribution, more matrixed structures, and increased diversity, as well as accelerated technology innovation, have made the way we work more interconnected than ever. “Sixty-seven percent of employees report an increase in work requiring active collaboration,”4 according to CEB. In the same study, general managers and senior executives reported needing a 20 percent improvement in employee performance.
The concurrent conversation about traditional performance management processes has led many HR departments down a path of exploration. As they evaluate what to do with a broken performance management system they are faced with a choice. Either do nothing about it, do away with it, or make something new from the old. One of the reasons this topic has garnered so much attention in the press and in the boardroom is because its deficiencies are glaring in the face of the new dynamic work environment. Teams are the new organizational currency and high-performing teams are the most valued asset within the matrix. Because the work that is performed by teams is in many cases more project-based the question of how to optimize the individuals that comprise these high-performing teams becomes the central challenge of their manager and falls squarely within the purview of the HR function.
Because all employees now have to be effective enterprise contributors, companies that rely on traditional performance management to evaluate individual performance will continue to find their performance management processes falling short of expectations. Businesses cannot afford to be among those hindering organizational performance and subverting goal achievement and alignment as a result of focusing on individuals, rather than the enterprise as a whole.
“After years of trying to build top-down, hierarchical, forced rankings to evaluate people, the world is shifting toward a feedback-centric, agile, strengths-based approach,” writes Josh Bersin, Principal and Founder of Bersin by Deloitte. Data in the firm’s recent trends report shows that companies that modernize their performance management process see 20-30 percent higher engagement and dramatic improvements in retention. And performance goes up too.
As more organizations move toward a philosophy of Agile Performance Management, (some making huge strides - others baby steps), it's evident that a structure to support the tenets of frequent feedback, agile goal-setting, coaching conversations and real-time recognition is crucial to sustaining the success of a new paradigm. To find that answer, like with so many things today, just Google it. In 1999, John Doerr introduced to Google the concept of Objectives & Key Results (OKR's), and the results are fast becoming the standard for the alignment of individual and company goals. OKR's are also being used as a framework to transform performance management from a traditional, static, and annual process to one that is more dynamic and actionable.
Later this month we invite you to join HCI and BetterWorks for a webcast that will detail how one organization has taken these cues to bring an agile approach to performance management. Click here to register and learn what performance management looks like in a culture of agility.