The Future of Performance Management Is Not Just about Technology

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The future of work is here. Smart technologies augment our work—or replace it, if we’re not careful. Five generations of employees now work together almost seamlessly, and the entire world can serve as a talent marketplace, with new collaboration platforms and the range of the talent spectrum providing work to organizations. New technologies are disrupting business models across all industries, and we are increasingly challenged to turn assumptions about legacy processes upside-down.

Current project management approaches were built for an industrial, top-down, controlled environment in which organizations ruled and workers were at the mercy of these big brothers (and, less often, sisters). In my blog on our performance management research findings, I covered the confusion and frustration organizations have experienced in searching for the perfect performance management process.

Time for Disruption

Many organizations are aware that most performance management approaches take too much time and provide too little value to individuals, teams, and leaders. The quest for a perfect approach has been going strong for years. Still, our 2018 High-Impact Performance Management survey indicates that a mere 7 percent of organizations operate at the highest level of what we call performance management maturity—a set of approaches that create organizational and individual value. Simply redesigning processes does not result in the necessary changes. What does it take to be successful in this new world of work? Our research identifies four factors that can drive the value organizations are looking for:

  • Culture and purpose play a critical role in optimizing performance management. High-performing organizations focus on growth and progress and aspire to instill a sense of progress in their employees. Creating a culture of trust, inclusion, and accountability is paramount.
  • Individuals and teams are the key drivers of performance. They exchange real-time, multifaceted, effective feedback and learning with each other in the flow of work.
  • Human-centered leadership behaviors and practices augment and enable workers to heighten performance. Authenticity, appropriate risk-taking, and advanced coaching skills characterize the leadership toolkit in a mature organization.
  • Data and technology can serve as critical enablers of performance management, even as they threaten to upend the world of work. Technology allows companies to seamlessly embed performance management into the flow of work, transforming performance management from historically oriented audits to real-time work assessments. Predictive and prescriptive advanced data analytics support teams and individuals in adjusting their performance as they go—but only if the environment is ready. Technology alone can be counter-productive, making people more overwhelmed, stressed, and less productive.

Four Levels of Performance Management

In our High Impact Performance Management study[1], we have identified four levels of maturity:

  • Controlling and bureaucratic. The performance approach of Level 1 organizations is compliance-focused and competitive, with too much emphasis placed on a rating. HR pushes hard for completion of forms and processes that create limited value for leaders and individuals. Feedback and improvement actions are not a priority, and technology is used only to automate and track the completion of required steps. Level 1 maturity is a one-size-fits-all, backward-looking model that no one enjoys.
  • Provisional and inconsistent. At Level 2, HR starts to listen and try new approaches to address workforce and leader concerns. The focus shifts from rating people to empowering them, but often lacks adequate support to foster growth. Leaders offer encouragement and recognition, but may not have the required business focus. Though organizations at Level 2 recognize the importance of feedback, they may not take the appropriate follow-up actions.
  • Human-centered and personalized. Level 3 organizations use effective performance management practices. Driven by business leaders and supported by HR, these companies foster collaboration to enable more advanced learning support and encourage individuals and teams to give and receive frequent feedback. Leaders—as the owners of this process—are strong supporters of the workforce. This level was the ultimate destination just five years ago. Now, the power has shifted to the workforce.
  • Intrinsic and seamless: At Level 4, performance management activities are indistinguishable from work itself, but evident in all outcomes. Individuals and teams are the drivers of performance, with leaders creating conditions for success. Technology is a strong enabler and provides real-time data and insights on performance and development. Organizations at this level provide work-integrated nudges and support mechanisms to further embed these activities into the fabric of the organization—but only if they are used strategically to make work itself better.

What’s Next?

In the new world of work, performance management must become part of the work itself—culturally intrinsic and seamlessly embedded. Organizations that accomplish this can hope to interrupt the never-ending cycle of reinvention and finally break a decade-long productivity slump.

Take action now—understand where your organization stands on the journey to a new paradigm.

Bersin’s Performance Management Maturity Model is now available. For more information, visit Bersin.com.

 

[1] The Performance Management Maturity Model, Bersin, Deloitte Consulting LLP / Kathi Enderes, PhD, and Matt Deruntz, 2018.

Kathi Enderes

Kathi leads talent and workforce research for Bersin, enabling organizations to transform work and the worker experience for increased organizational performance. With over 20 years of global human capital experience from management consulting with IBM, PwC, and EY, and as a talent management leader in large complex organizations, she specializes in talent strategies, talent development and management, performance management, and change management. Kathi holds a doctorate in mathematics and a master’s degree in mathematics from the University of Vienna, Austria.

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