Times Are Changing: The Future of Performance Management and Reviews

Performance is changing rapidly. In 2015, more big name organizations scrapped traditional

performance appraisals and restructured how their performance management processes. In 2016,

it’s expected that significant changes will continue to occur.

Amongst the performance management trailblazers were Microsoft, Adobe, Cigna, Accenture

and Others. These organizations dropped formal rankings and introduced on-going feedback

facilities and informal check-in meetings.

All four of the companies reported positive outcomes, leading the way for other companies to

embrace change.

After calculating that performance management was consuming two million hours each year

across their organization, Deloitte joined the ranks of change makers. More unexpectedly, 2015

also saw General Electric finally put their infamous “rank and yank” system to bed.

But performance management is by no means a solved issue.

How Performance Management is Changing ?

Let’s take a look at how performance management evolved in 2015.

Dropping Performance Ratings

Adobe abandoned their performance reviews in 2012, Deloitte scrapped them early in 2015 and

Accenture discontinued their use of rankings in September 2015.

Taking into account the fact that 90 percent of HR professionals don’t believe performance

ratings are effective, it’s no surprise that this is happening.

Performance ratings have been confirmed as leading to lower levels of motivation and are proven

to negatively impact performance as a result. Instead, forward-thinking companies are favoring

well-structured objectives and regular feedback for employees over outdated grading systems.

Check-in Meetings

Employees lose sleep over them, managers plough their precious time into hefty piles of

paperwork, and HR are left with a mountain of data to analyze. It’s the annual performance

meeting. Now, companies are recognizing that once-a-year meetings are inefficient and

insufficient.

Instead, companies are introducing “check-ins”, regular, informal meetings or conversations

between managers and individual employees. These check-ins allow managers to identify issues

early on, support employees over time and encourage progress.

In-the-Moment Feedback

Traditionally feedback has been stored up and kept on file all year, waiting until the annual

performance review when managers let it loose all at once.

Not only is this uncomfortable for managers and demoralizing for employees, but it digs up old

ground that often neither the manager nor the employee can fully recall.

Instead of saving feedback up, managers and co-workers are being encouraged to provide in-the moment feedback as soon as an event occurs, whether it’s positive or negative in nature. This

way employee are praised when appropriate and coached when a challenge presents itself.

Shorter-Term Objectives

In line with the abandonment of performance ratings, companies are setting more regular

objectives with shorter time frames. Yearly goals and meetings are rapidly being replaced with

more regular, informal check-ins and shorter-term objectives.

Performance is being constantly monitored, as opposed to analysed just once a year. At U.S.

company Cargill, the switch to ongoing performance discussions has resulted in 70 percent of

employees saying they feel more valued.

What Does Performance Management Look Like in 2016?

Moving into 2016, analysts are predicting that as many as half of the Fortune 500 companies will

abolish their annual performance review rankings either this year or next.

These companies will be building on the concepts introduced in 2015 and well as embracing new

performance management trends in 2016.

Online Performance Management Software and Apps

Forrester Research has predicted that a shift to the cloud and increased use of software will be a

big part of the future of performance management.

It’s thought that cloud-based HR could improve employee engagement as well as cut down on

admin time for HR teams.

Many companies are already introducing performance management software that uses the cloud.

General Electric is currently using a performance feedback app for managers and employees so

that they can request feedback and provide comments from their devices.

Increasing Impact of Social Media

We’re already seeing social media taking on a role in the recruiting sector and it looks like it will

also impact performance management.

In the future, social media interfaces will be part of the software design to make it as user friendly as possible. Software will be designed to function in real-time to allow for constant

feedback and regular updates between managers and co-workers.

More Scrutiny on Gender Bias in Performance Management

The beginning of 2016 saw some performance management analysts picking up on the existence

of gender-related bias in outdated performance management processes.

As a result, increasing emphases on ensuring performance reviews in the future are free from

bias.

One of the ways this may be tackled is through providing training for managers on best practices

when they are writing their performance reviews and ensuring they are always taking a forward looking approach.