Performance management is changing and big companies including Accenture, Microsoft and General Electric are revamping their performance management in a bid to improve company culture and workplace productivity. The latest trends in performance management are moving away from ranking employees based on their past performance and instead are focusing on supporting employees so that they can achieve their future goals.
Here are the five latest performance management trends according to recent research and industry specialists:
Aligning Objectives Upwards Commonly companies decide and set goals from the top down. The problem with this system is that often objectives are not directly relevant to a team or an individual employee as opposed to their manager and they have little influence over the achievement of the objective.
The new approach of aligning objectives upwards advocates giving employees the responsibility to decide their own objectives which support the organisation’s strategic goals. This gives employees autonomy over their goals and means they are more likely to be committed to achieving them, as well as helping them to understand how they contribute to the company’s overall performance.
Companies like Microsoft and Deloitte are opting to shift the focus away from these annual reviews and implement regular, informal chats between managers and individual employees. This means that managers can keep up to speed with challenges employees are facing throughout the year.
In-The-Moment Feedback Typically managers leave most of their feedback for the annual review, but new performance management trends say it’s better to feedback to employees straight away. Figures from Performance Management: Research Report 2015 show that 70% of employees feel feedback gives them better insight into how to improve their performance at work.
Feedback from managers to staff should be both constructive and positive. It could involve looking at a way of working that hasn’t produced results and discussing a new strategy, or it could simply be giving an employee a pat on the back for a good piece of work.
Decoupling Reward For many companies, performance ratings and pay reviews have gone hand in hand. However, research has shown that linking these together actually has a negative effect on performance and can be hugely demotivating for employees.
Decoupling performance reviews and rewards could be a step forward. It’s thought that performance reviews and rating will be more honest if pay reviews are completed at a different time of the year. Pay reviews should also take into account other factors, such as the company’s overall performance, market rate and changes in job role or responsibilities.
Simplification Performance management systems have long been criticised by managers for being too complicated and this has led to a ‘tickbox mentality’ where managers are just completing paperwork as opposed to truly supporting employees.
Managers should spend time not completing long forms but engaging in valuable discussions with employees to help them progress in the company and achieve their goals.
Stuart Hearn has 20 years experience in the HR sector. As CEO of Clear Review, a performance management software for small and medium sized businesses, he has his finger on the pulse of all the latest performance management trends.