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future of performance management

Ahead of the curve: The future of performance management

The evolving nature of work has led to employees creating value in ways that outdated performance management systems struggle to capture.

Indeed, the proliferation of modern performance management software is driving transformational change throughout every single contemporary industry.

But the challenge is, and has always been, what employee data is actually helpful when monitoring performance?

How are businesses taking new tools and applying them to their workforces? And is the future of work likely to throw up some unexpected practices?

But the challenge is, and has always been, what employee data is actually helpful when monitoring performance?

Side stepping the average

Large organisations with complex team structures and varied roles often have trouble discovering which employees provide an outsized contribution.

Rather than delve into the average performance of a cohort, some companies are choosing to focus specifically on individuals who lie outside the average, at both the high and low end of performance.

By sidestepping the average performance, businesses find it easier to differentiate and nurture those struggling to maintain a standard and potentially streamline convoluted processes, as well as reward and empower those who are outperforming.

This saves companies time, as trying to determine who among the average is marginally better or worse fails to meaningfully improve performance or inform managers.

High quality data, regularly

The collection of performance-related data has, until recently, been an imperfect and cumbersome task.

Particularly as companies scale and staff numbers expand, collecting and maintaining accurate data becomes unwieldy and difficult.

From manager ratings to employees self-reporting, the information itself rarely gives executives a clear insight into how well or badly their people are performing across an organisation.

But as applications and performance management systems become more intuitive and mobile, the quality of data available offers unprecedented understanding into employee behaviour.

The introduction of real-time, crowdsourcing data via new performance management software, means companies can receive rolling feedback from meeting to problem-solving sessions, completed projects to launches, and campaigns.

The introduction of real-time performance management systems via mobile are more likely to be used by staff, giving managers and team leaders an easier and more convenient time capturing feedback as it happens.

As a result, large organisations experience much more transparent insights into staff effectiveness and transparency as well as a more agile approach. The ability to react quickly to performance issues allows the business to harness and perpetuate performance excellence and ultimately drive the organisation forward.

Unlinking evaluation and compensation

Where once employee pay grades were established on the basis of performance evaluation, now companies are increasingly flipping that notion on its head.

Looking to behavioural economics as a guide, they are acknowledging managers often reverse engineer ratings in order to solidify their preferred compensation distributions.

This leads to narrow or skewed performance criteria that fails to accurately capture which employees are outperforming others.

Additionally, from a cultural perspective, should employees worry excessively about small negative shifts in ratings, their performance is much more likely to disappoint.

Forget backward looking

Rather than an annual discussion around performance and goals, performance management software enables the rolling collection of employee data.

This kind of analytics allows managers to act on fact-based performance and do away with backward-looking evaluations.

Aside from the benefits for employees who know they receive attention, frequent development discussions also give managers the capacity to learn what skills are broadly missing in a workforce as well as what skills are possibly misplaced.

Interrogating your company’s performance data using a suite of modern tools is likely to enable managers to retrain, retain and empower your existing staff and give you unprecedented insight into the ways and whys of how your company operates.