Uncertain times call for a more agile approach to performance management

There is convincing evidence that an effective performance management system—which covers performance goals and objectives, evaluation and feedback, development goals, and rewards—generates a wide range of positive returns to the business and is best for employees’ skills development and career growth. However, traditional performance management approaches are proving too rigid for uncertain and highly dynamic contexts. Based on recent literature, we identify four key factors in setting up a successful performance management system in uncertain times:

• Managers as skillful coaches Employees need to receive clarity around their work priorities, but also around the areas they should improve and develop. Leaders and managers must continue to hone their coaching skills and their ability to give meaningful feedback, and they must keep enabling individual autonomy.
• Increasing role of technology Performance management software can make individual and organizational goals more transparent, allow companies to track real-time feedback from multiple sources, and collect employee data that can help generate new insights into high performers and the context in which they thrive. However, as with any sensitive employee data, companies should be mindful of the potential loss of confidentiality of the review process and be vigilant about what is written in performance reviews.
• Intensifying link between performance management and employee experience Allowing employees to participate in setting personal goals aligned with organizational strategy, and having regular conversations focused on employee development rather than on the evaluation of past behavior, are two key elements for turning performance management into a positive employee experience.
• Being mindful of proximity bias When evaluating performance and thinking of development opportunities for their employees, leaders need to ensure that employees who decide to work from home are not penalized compared to those who are more often at the office.

For more details, see Latest Trends in Performance Management: A Literature Review of Innovative Ideas