Organizations have been talking about reinventing performance management for years. The rise of hybrid work models and the increasing desire for employees to be seen as people, not just workers — makes this a critical moment to rethink the purpose and value of performance management programs. Based on key recent industry trends, here are my predictions for the future of performance management.
- Performance reviews will become project-based
Many organizations and employees alike have moved toward a project-based work model. Coupled with a rise in the shift to contingent workers, these new work models are influencing many organizations’ post pandemic planning.
In a world of project-based work, employees want leadership to evaluate their performance after each project — and they expect to regularly see the explicit link between evaluations and compensation. Assessing employee performance regularly allows for staffing and resourcing decisions as projects conclude. This shift will:
- Provide employees with feedback, evaluation and rewards based on their project-to-project performance.
- Evaluate employees based on outcomes achieved and critical feedback from peers and clients.
- Clearly define and explain how employees’ performance on each project affects their pay.
- Goals will be personal as well as professional
Goal-setting and feedback are meaningful when they help employees directly link their contributions to the organization’s goals. However, personal context is also important. In fact, 82 percent of employees polled in the Gartner 2021 EVP Employee Survey said they wanted their organization to see them as people, not just employees.
In the next evolution of performance management, HR leaders will seek to integrate personal goals, such as wellbeing and acquiring skills not directly related to their work. Fostering an environment in which employees can openly discuss these personal goals with their managers will include equipping employees with self-assessment tools to evaluate their progress against both personal and professional goals.
- Feedback and development will become more automated
Employees understand, even better than their managers, the kind of feedback and development support they need to improve their performance, but they often lack the facility to participate actively in the process.
Many organizations have increased investment in employee-productivity-monitoring technologies, especially in our hybrid world. Automated data collection and analytics around employee activities can be powerful for helping individual employees understand how they are performing and where there is room to improve. In the future, this technology will automate feedback processes and provide timely, data-based feedback to employees.
- Managers will no longer manage performance
As technology grows and employees become more proactive in day-to-day management of their own performance,the focus for managers will turn from performance management conversations to supporting employee career pathing and development. HR leaders will need to equip managers with the resources to nurture talent, tackle challenging work situations and help employees make decisions about their next projects and skills.
- Team performance management will emerge as a separate focus
As teams adjust where, when and how they collaborate in hybrid and distributed environments, team performance will emerge as a separate focus. Teams will be asked to more actively work together to track progress and improve both project-specific performance and team dynamics. Teams will need tools and resources to assess important parts of their health, such as inclusivity, cohesion, accountability and customer centricity, and to diagnose problems.
It is obvious the emerging ways of working have made it urgent for performance management practices to transform to become more human and people centered. In many cases, employees could achieve their annual performance objectives, despite the fact they could not unleash their skills and capabilities to support the organizational strategic-project agenda.
It’s time for a shift toward the concept of performance enablement instead of performance management in which organizational performance goals can be cascaded down into projects and assignments aligned to people’s skills, not their job titles.