Why, What and How of Performance Management

Organizational performance is a high-focus area for leaders and HR alike, considering that we are navigating highly uncertain and dynamic business environments. Employee performance management translates to organizational performance, and so enhancing employee performance is one of HR’s key concerns.

Lately, we have seen a slew of “best practices” in the performance management space- many organizations are shifting away from the traditional performance management constructs and modernizing the process, either by implementing an entirely new model of “check-ins”, or by implementing new technological systems. Either way, much of this change is being driven by new technologies.

Technology is in fact, proving to be a true game-changer when it comes to managing performance, it allows HR to implement best practices, incorporate personalized experiences, and also bring about standardization based on the important tenets of fairness and trust.

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Need for Tech-Revamping Performance Management

Technology ^has pervaded our lives like never before. Employees are used to engaging with technology for their personal tasks, be it conversing with someone or ordering groceries online. These advanced technology-led services are available at the tap of a digital device, and hence people are fast becoming accustomed to a high degree of convenience and comfort that traditional approaches cannot offer. These are the very people who work in today’s organizations, and hence they expect a similar degree of comfort and convenience when it comes to organizational processes.

Specifically, the performance management process directly impacts a person’s career advancement and professional growth, and therefore employees expect absolute fairness and transparency in the performance management process. Traditional performance reviews were highly influenced by human judgment, allowing various types of biases like recency bias, confirmation bias, etc. to creep into performance evaluation. This has resulted in many professionals looking askance at performance management, questioning the effectiveness of the process from a view of authentically evaluating human performance.

The redesign of performance management is picking up speed: 79 percent of executives rate it a high priority, up from 71 percent three years ago, with 38 percent calling the problem “very important” 2017 Global Human Capital Trends, Deloitte

Now, with a fundamental change in the ways of working, careers and learning are taking on renewed importance, and companies and people have long shifted from mere “jobs” to “work” and “careers”. Continuous learning is no longer a good-to-have, it is a must-have to sustain in an ever-changing world.

Constant change means more need to align employees’ values to the organizational values, so as to get the desired productivity and work effectiveness. Another angle that adds up to this need is the nature of employees themselves- today’s employees want to have a voice. They want more  continuous feedback, want to continuously learn and grow in their careers, and want to take on leadership challenges early-on.

How then do organizations meet these ever-increasing employee expectations, while staying on track on the organizational strategic direction? The answer lies in investing in the right HRM software for performance management. The end objective should be to make work and life more value-adding for people and equip them to be their best selves.

Giving Performance Management a Technological Twist

Contrary to popular perception, technologizing performance management is not merely about having a performance management tool in place. It is about ingraining technology-led performance processes as a way of life.

The design and experience of a Performance Management Software should start with an alignment of the individual and team vision, mission, and values with the organizational values. It should be in line with the modern ways of working, i.e., team effectiveness, collaboration, ongoing communication, continuous feedback, break-down of siloed functioning, employee development etc.

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HR must, therefore, look at the latest emerging technologies to revolutionize the fundamental Performance Management philosophy from a rigid, traditional approach to a contemporary, employee-empowering approach. Machine learning, data, and analytics, social sharing, cloud computing are some of the emerging technologies that HR should weave into Performance Management tools.

From throwing the right learning recommendations to excel in one’s role, to helping managers accurately identify high potentials by using qualitative and quantitative insights, the opportunities are immense.

How to Draw the Biggest Benefits

Both ends of the spectrum i.e. organizations and employees stand to benefit immensely from the technologization of performance management processes.

1. Helps realize shared outcomes: The work environment is no longer single-dimensional i.e. about individual contributions. Today, collaboration and group work are an intrinsic part of organizational functioning. Accordingly, the performance management process should factor in shared contributions and shared outcomes, which is best done using tech tools that allow for shared goal-setting and evaluations. Moreover, the focus should be not just on retrospective evaluation of past outcomes, but on presently ongoing and future endeavors.
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2. Data aids transparency: With technology-led Performance Management Software, HR and business managers need not worry about snap judgments and biases in evaluating performance outcomes. With the right performance management system, managers can have access to real, hardcore data that they can analyze and insight, thereby making the process more transparent and fair. This reduces the chances of human biases altering employees’ career outcomes, thereby fostering trust. Also, data-led insights help the organization gain an objective view of performance highs and lows so that they can make the most of high potentials and high performers. It encourages transparency and fairness so that employees feel valued and engaged.
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3. Enables continuous feedback: Modern-age employees (especially millennials), wish to constantly stay informed and involved in the organizational proceedings, and they actively seek inputs to propel forward their careers. Continuous feedback is critical to engage such employees. Technology can be the transforming tool to build that feedback loop into the performance management process. For example, the constant connectivity with cloud and social allows for anywhere, anytime communication and access. Technology is thus, the key to unlocking employee potential in the modern work milieu.
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4. Simplifies manager interventions: The right tools can help managers carry out a host of performance management activities easily, right from drafting SMART goals, communicating them with various stakeholders, to seeking performance review inputs from the concerned stakeholders. An HCM or performance management reduces the amount of time and effort that managers spend on the Performance Management process. Managers can now spend more time on value-adding interactions such as face-to-face employee discussions, rather than getting lost in a load of paperwork.
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5. Encourages employee participation: The employee experience is the cornerstone of employee engagement, and technology helps deliver an outstanding employee experience by placing power in employees’ hands. Self-service modules like goal-setting, goal updates, and 360 degrees feedback are great ways to involve and engage employees in the performance process, making them active stakeholders.
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6. Better coaching and mentoring: Employee data and manager data can help HR create the right coaching or mentoring dyads/teams, thereby encouraging a culture of conversation and coaching.

These are just some of the many advantages of digging talent technologies in the Performance Management Space. A number of statistics prove that organizations and leaders are mostly in favor of revamping performance management the technology way. It is not a question of “if”, but “when”.

Only 34% of leaders believe the current performance management approaches are highly effective at helping employees rapidly adapt to change  Accenture Strategy

Ready for a Technology Makeover?

While many business and HR leaders may be convinced about the dire need to technologize performance management, questions still abound on the readiness of the HR organization to instate this change. No change is pleasant, teething challenges and mindset resistance make it difficult to implement and sustain for the better. Many companies which have done away with the forced ranking system of Performance Management Software, have not entirely scrapped it.

Many have retained some measurements, maybe making them a tad more qualitative, intuitive and future-relevant than the rigid ones. Leave alone implementing cutting-edge technologies like machine learning, most organizations are still trying to figure out the first step i.e. getting their data ready and mature.

Managing people’s performance comes with its own sensitivities and nuances. Leaders must understand these, and assure their people that this change is for the better. Only then will people adopt and embrace the new processes and systems as a way of organizational life. And that too will take time and constant effort from the leadership and HR.

88 percent of companies took two years to gain significant traction with a new Performance Management system The NeuroLeadership Institute

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The real question that needs to be asked is not whether performance management is ready for a technology makeover, but whether the organizational processes, infrastructure and most importantly the people are ready for a technology makeover?

Retaining the Human Element

Of course, technologizing performance management does not mean that you are totally removing the human element. On the contrary it is about segregating the mundane from the enriching, so as to provide people a great experience. It is a well-known fact that managing people cannot be reduced to man-machine interactions, and that is not even the intent of marrying technology with performance management.

Technology offers us the opportunity to do exactly the opposite- enhance the quality of human interactions. HR professionals should therefore constantly assess the impact of PM technology, and keep the following key things in mind while doing so:

1. Avoid the over-engineering ratings owing to multiple data sources: Human experience, judgement and intuition are valuable assets too, and managers should learn to balance the machine-insights with their own skills to get the best performance outcomes.
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2. Prevent over-mechanization of processes: The con with too much technology is that everything becomes impersonal, and that’s definitely not what people like. Coaching over a mobile app, performance reviews through video-chat, and virtually crowd-sourced feedback etc. When designing the new PMS, make sure to make way for human interventions such as face-to-face conversations, rewards gatherings etc. to help retain the human touch.

Revolutionizing Performance Management Systems

The “how” of bringing about a performance management makeover is often more important than the “what”.

Every leader knows about the latest hot technologies that are helping build the so-called “best practices in Performance Management”. But what they may not know is whether all these technologies are actually relevant and needed for their organization.

The “how” is thus all about not succumbing to the temptation of blinding instating cloud, social, people analytics, etc., or getting into a rush to implement it all and appear “cool”. It is about having a thoughtful a selective approach of what is the true objective to technologize the Performance Management process.

For that, HR leaders must first define the objective. Here is what HR leaders and business leaders should dwell upon to master the “how” of performance management tech transformation.

Define the objective: Leaders must clearly outline what they will achieve by technologizing performance management. Is it better efficiencies? Or do they wish to build a more collaborative culture? Or do they want better-engaged employees? Decide on the core primary objective/s and build the system and process centered on it.

Partner with the right software provider: To cash in upon the sudden craze for Performance Management software, a number of enabling vendors and partners have mushroomed in the market. It is important to select the right partner in this technological transformation journey. This means ensuring the right capabilities, the same vision, common outcomes, acceptable (and not acceptable) ways of working, and terms of support and ongoing association. It is about deep diving into the minute features, because this can greatly alter the user experience.
For example, at ClayHR, the Performance Review application is all about focusing on what really matters i.e. keeping employees happy and growing.  Here is a look at the key features that have made this possible:

1. Template libraries: Managers should be able to easily choose from performance goals and feedback templates depending on who their team members are, such as employees from sales, developers, business analysts, etc. Having ready templates to choose from greatly enhances Performance Management Software efficiency. ClayHR’s application also allows for customization by allowing managers to design their own unique templates for assessing specific roles and goals.
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2. Customizable Rating Scale Types: ClayHR understands that managers and leaders know best what type of assessments work well for their own organization, department, geography or team-roles, and hence allows managers to choose from a range of rating-scale types: thumbs up/down, red-yellow-green; 5-point scales, 10-point scales or anything else. They simply need to select from some options of grading templates, as visible in the system.
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3. Integration with goals: The above performance review templates are aligned with the individual goals, allowing seamless flow of information from the goal-setting module to the review-and-assessment module.
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4. Unlimited reviewers: ClayHR application incorporates the ideals of 360-degree review in the true sense- it allows managers to add an unlimited number of reviewers for an employee. Managers and leaders can now define self, peer, supervisor, and direct reporting relationships and ensure that holistic feedback is gathered, without the manual fuss.
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5. Customizable workflows: While the ClayHR Performance Management system defines certain guiding review workflows to make the process easier for reviewers, it also allows them the option to themselves define customized workflows that adapt to their processes. This means that assigning tasks and establishing deadlines is now much easier and accurately done.
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6. Individual or batch reviews: Often the most pressing complaint of business managers is the amount of time involved in carrying out performance reviews. ClayHR addresses this problem by incorporating the feature to launch performance reviews individually for people, or even in whole batches. For example, a manager is able to launch multiple reviews with a single click, for people across his or her teams, departments or other organizational pockets.
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7. Progress dashboard and results-consolidation: A single-view dashboard provides managers an at-a-glance view of where they stand in the performance review cycle at any given point in time, allowing them to be on top of the process.

These features, along with automated notifications and emails make the Performance Management process a breeze for managers and employees alike.

1. Educate the employees: Constant and clear communication is critical to ensure that employees see the benefit in the technologizing endeavor. When allied stakeholders and employees see the “What’s In It for Them” they will be more than willing to participate and even contribute to the change journey. For example, the use of robots and automation may lead some people to think that they may lose their jobs, which is scary. Leaders must reassure and support with the right resources and messaging to educate and empower their people in these times of change.
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2. Tie it in with the skills-management agenda: Performance management cannot function in silos, it is intricately related to other employee processes such as employee development and career advancement. In fact, the Performance Management Software tool should be designed to accurately capture the employee training needs, both current and future. It should also talk to the learning management system to curate and create a personalized learning experiences based on these learning needs. A good performance management system thus has a strong training management element, and HR leaders must factor this in while designing and developing the PMS system. After all, the right skills drive the desired performance levels i.e. both go hand in hand.
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3. Make it a continuous commitment: Probably the most important aspect of how to technologize talent processes like Performance Management is for leaders to make an ongoing commitment to the change. This means planning with the right resources in place to sustain the change.

Yes, the performance management revolution is here to stay for a while. Organizations are experimenting with new constructs, technologies, and tools to realize the maximum potential of their people. This is going to be an ongoing process, but it is time that organizations take the first step towards befriending technology and use it to enable and empower their people to be their best.

As mentioned in the following SHRM blog by Dan Rockwell, if you want to change people, change what they believe about themselves. Perhaps this change in today’s technology-led age starts with changing technology itself.