The Future of Performance Management

According to Gartner, less than 20% of HR leaders are satisfied with their current performance management systems, while 81% plan to actively switch soon.

The performance management process has evolved by comparing today’s performance management system with yesterday, from annual onslaughts to 360-degree reviews and training. Earlier, annual reviews were the only way for performance evaluations of an employee, which made them feel blindsided about their progress. You were compelled to have consistently communicated with your managers. This antiquated approach never helped to improve their performance.

Performance Management System Today

With the shifting dynamics of the modern workplace and hybrid and remote work-model emerging as the new ways of doing business, you must learn about the changing employee needs. Performance management must transform. Modern performance management system emphasizes people and their potential. It encourages separating compensation from performance reviews. In current times, you can have courageous conversations with your mentors. Continuous feedback and check-ins have witnessed a rise. Besides, the integration of new processes into the daily workflow is seamless.

Here are a few principles you must follow to give your employees what they need the most.

9 Principles for Modern Performance Management

1. Goals should be flexible

Avoid rigidity while setting goals. The one who sets objectives should set flexible goals and timeline them, considering their organization’s demands. Follow the bottom-up OKR approach. A tool like UnlockTalent enables your employees to set their confidence level, assign a weight to the key result (KR), and set a quarterly target for themselves to achieve company goals ultimately.

2. Objectives should cascade

Highly collaborative the strategy is, the easier it gets to cascade the organizational goals. Employees develop a sense of accountability when they involve themselves in goal-setting. It is thus prudent to let the employees set OKRs by themselves while contributing to the overarching organizational goals. When individuals and teams learn how their contributions are valuable to the company, they become practical and are motivated to outperform.

3. Targets must be transparent

Each employee must have access to the requisite information to make independent decisions. Your people should know pertinent company data, current competencies, and company goals. Simply put, there must be complete transparency. Employees can thus be fully responsible for the goals they must achieve and direct their efforts toward accomplishing them.

4. Feedback needs to be consistent

Managers must understand that their reports can develop when they receive regular, honest feedback. Feedback shouldn’t only flow from top-bottom but also from bottom-top. An effective performance management system can thus be used to assess your employees’ behavior and learning objectives. Since tools like UnlockTalent allow you to ask anyone for feedback, you can gauge content-related goals at the team level.

5. Team collaboration must be encouraged

“Alone we can do so little; together we can do so much,” said Helen Keller.

How much an employee can achieve doesn’t matter if they cannot perform well in a team. Value creation is driven by teamwork. Therefore, organizations that concentrate on team or project goals outperform those that concentrate on individuals. Collaboration is key here. Cross-functional teams can discover the best solutions for current and forthcoming challenges. As leaders, encourage teamwork and flexible team compositions instead of departmental thinking.

6. Technology should be leveraged

You must integrate performance-related tools into your team’s daily workflow to see positive results from the performance appraisal process. Software like UnlockTalent enables individuals to keep track of their progress on the set goals, check if they are doing well on the key results, and whether they are facing any challenges and roadblocks. The “Weekly check-ins” feature of the tool is of much help here. Besides, one can give and receive feedback. The best part is you can improve your performance by identifying if your goals align with your organization’s goals. Align, Engage, Perform, Recognize, and Learn are the tool’s key benefits, reflecting its features. Reporting is also made easy at UnlockTalent with access to your team and organization’s reports.

7. Constant, self-directed learning must be promoted

Today’s high-performance management emphasizes strong self-direction and various learning opportunities, considering our UnlockTalent product features “Learn”. Learn feature enables your employees to work on their skill-building. They develop necessary knowledge and skills by enrolling in related courses. Constant self-directed learning and development have thus become the most important in today’s times. As leaders, you must remember your business grows when your employees grow.

8. Decision-making needs to be fair

To ensure ratings are fair, use different criteria to make varied types of decisions. Do not base all talent-related decisions, promotion, and compensation on your employees’ performance ratings. Managers can have 1-on-1 with their direct reports or conduct calibration sessions for performance ratings to be reasonable and unbiased.

9. An iterative approach should be taken

Annual reviews fail to give an accurate description of employee experience and performance. The working world becomes increasingly complex daily, with continuous and fast-changing circumstances. You understand that good and the right amount of data is crucial for a fair assessment. You should thus review how your reports fare on their goals every quarter. Collecting performance data around the year implies that your organization is gaining better insights into its employees’ performance and that employees are getting highly precise evaluations.

Does the future belong to you?

If and only if you adapt, the future belongs to you. Performance management systems are evolving continuously. You know that your organization and every other is different by nature. With its performance objectives, your employees must know the organization’s mission, vision, purpose, and values. They can thus align their efforts with the overarching organizational goals.

Do away with your obsolete performance management system and make room for new, updated, highly effective systems assisted by UnlockTalent experts.