Now more than ever before, organizations of all sizes are striving to increase employee engagement levels. The logic is that better engagement leads to better performance and reduced turnover.
Of the many processes being revamped with better engagement in mind, performance management is one of the most pressing.
Historically, it’s been normal for businesses to have labor intensive annual reviews where managers assign employees numerical scores but employees just want to talk about compensation. This type of performance management has led to only 8 percent of organizations confirming their performance management processes provide real business value.
However, new schools of thought are emerging that re-engineer this management initiative as an agile process composed of on-going feedback, a focus on strengths rather than weaknesses, and a separation of compensation and coaching.
This type of thinking turns the old, universally hated framework on its head.
Performance management should now focus on keeping employees engaged and driving business results — not assigning a year-end score and using that as justification for compensation. For example, Adobe struck down performance-based scores back in 2012. As a substitute, Adobe implemented check-ins between employees and managers. During these meetings, the two parties would both give feedback about the other’s contributions, work together to set expectations, and compliment one another on strong work.
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This collaborative form of performance management reduced Adobe’s voluntary turnover by 30 percent. Three years after implementing the check-in system, Adobe has seen employees develop higher expectations for performance evaluations — rather than focus on compensation — and everyone has received better feedback than ever before. Additionally, turnover has remained exceptionally low.
Adobe exemplifies the power modern performance management can have throughout an enterprise. One might initially expect enterprises to resist this framework because it takes a substantial amount of ongoing work. However, much of the repetitive, paper-based tasks associated with goal setting and coaching are being automated by HR software suites.
For HR managers accustomed to working with multiple systems, new, user-friendly software is top of the wish list. In fact, over 33 percent would be willing to sacrifice features in order to get a single vendor solution.
Fortunately, sacrificing features isn’t always necessary when switching from a legacy HR system to a new, cloud-based platform. This particular software market is burgeoning, and some of the best performance management software comes included with a larger suite (or is at least available as an additional module).
These new systems are able to harness analytics, which will be particularly interesting to enterprise organizations. Rather than shuffle through reams of paperwork, managers can now easily run ad-hoc reports to gain insight on how employees are performing based on a range of criteria.
These analytics will better inform management decisions about performance, such as which employees would make ideal candidates for leadership positions and which employees need some additional resources or coaching to improve their output or engagement.
New HR systems also give employees a larger role in managing their own performance. Self-service portals are now included in 94 percent of HR software, making it much simpler for employees to manage their goals and provide feedback to their peers and managers.
Like many human resources processes, performance management is changing. The use of intuitive software and the demands of new workforce demographics are speeding this transition along. The end result will be an entirely new outlook on performance and the ways that enterprises manage it.
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