The Future of Performance Management

What is currently missing in the way overall employee performance is being managed?

The main ingredient missing in the way overall employee performance is being managed is ongoing constructive feedback. This is where leaders can have the biggest impact on their employee’s development. Provide feedback when they have done a good job and when they need some additional guidance or direction. Too often, managers will wait until they are upset or fed up with an employee’s behavior or performance before addressing it. Employees are taken aback and surprised and ultimately lose trust and respect for their managers when this happens. We don’t manage our children this way, so why manage our employees this way? Not to say treat your employees as your children, but rather use positive reinforcement to sustain the behavior and performance you desire to see and redirect at the moment to avoid ongoing mistakes or poor performance.

Given that a company’s workforce now has a significant proportion of virtual and freelance workers, how should performance management include them?

Performance management of a virtual workforce certainly takes more effort by managers. Since you do not have the luxury of face-time or in-person engagement, making a concerted effort to reach out on a regular basis and build a trusting relationship will be key to the success of the team. When possible, this should be done through phone calls and video conferences to help build interpersonal relationships. Virtual management will continue to be a way of doing business, and managers who learn how to manage their virtual staff seamlessly will be successful.

What are employees, managers, and decision-makers looking for to make performance management more effective?

Employees, managers, and decision-makers are looking to make performance management less subjective and link it directly to individual performance. These efforts will help make performance management more effective, equitable and fair amongst all employees. Using core competencies, measurable S.M.A.R.T. goals and ongoing feedback will help ensure performance management is no longer viewed as a task, but rather a conversation between managers and their employees with a financial reward directly linked to acknowledging the success of the employee for the performance year. Elimination of rating scales should also be considered to help make performance management more effective. Rating scales are not a motivator. Employees are more savvy and know some managers will use ratings as a crutch for not providing supportive and constructive feedback that can truly help an employee develop in their career.

What are some of the new things being introduced in Performance Management that are working/not working?

Some new things being introduced in performance management are the elimination of rating scales and ongoing feedback. Managers should be prepared to discuss good and poor performance at the moment, and not wait until an annual review to let employees know how they are performing. This process was stressful for both the managers and the employee. However, providing ongoing feedback, and no longer depending on rating scales to send a message to employees, helps make the process smoother and flow like a coaching conversation and not a dreaded task by both parties. By the time there is a formal performance discussion, the employee knows exactly where they stand. Additionally, the manager has less stress in preparing for the discussion because it is just formalizing what has already been discussed throughout the year.

If not periodic appraisals, then what & how?

The successful way to manage performance is by providing ongoing and consistent feedback as well as coaching. Employees want feedback, and not just when there is a performance issue. This is not to say you have to micromanage, but rather coach and provide guidance on a regular basis. Some organizations have moved away from the mid-year and annual review process and now provide feedback and merit increases throughout the year based on performance or the completion of a major project. This may be the way of the future in rewarding individual and team performance. Why wait for a formal process? Recognize and reward your staff along the way and throughout the year to help keep them motivated, engaged and retained. This is the true “pay for performance” method employees will start to expect as more millennials and Gen Z enter the workforce. This group of employees want recognition at the moment and do not want to wait for it. The companies who are targeting millennials are already putting this into practice and having much success.