Modern Performance Management Must-Haves

Is your performance management strategy working? How do you know? Do you ask employees, people managers, or HR? Perhaps you use productivity and engagement data?

You’re not alone if you’re asking yourself those questions, according to the McKinsey article “What Employees Say Matters Most to Motivate Performance.” Many organizations are making major changes on the performance front. “Some have streamlined goal setting and formal review processes, separated performance and compensation conversations, or simply done away with ratings altogether,” the authors write. Other businesses are choosing to factor in how employees do their work, not just what they do. That method considers issues outside the worker’s control, such as company culture.

Is poor performance related to the employee or the system?

Increasingly, headlines state that companies laying off staff due to poor performance, such as Bloomberg’s “Intuit Targets Low Performers and Executives in 10% Jobs Cut” and Forbes’s “The Awful Truth About Layoffs: It’s Not Just Numbers.” The latter advises that managers may need more training in working with employees to handle performance issues.

Goal setting and feedback

The McKinsey article, based on survey responses from more 1,000 global employees, reveals that respondents felt more motivated when they had goals that were a mix of individual- and team-level aims, were clearly connected to company goals, and had a concrete level of measurement.

In the HR Director article “Are ‘Feedback Circles’ the Next Big Thing in Performance Management?,” Katie Obi, chief people officer at OneAdvanced, shares that the best performance management is based in determining relevant goals, offering coaching and training opportunities, and bestowing sound feedback in the moment.

Obi further suggests that feedback circles—getting feedback not only from one’s manager but also peers, customers, and direct reports—is an important part of self-awareness. Rather than 360-degree feedback, which may occur on a set schedule that may be months after the fact, employees can use feedback circles to get input from a respected individual whenever they want it.

Data to the rescue

In Gallup’s “2% of CHROs Think Their Performance Management System Works” article, Ben Wigert and Heather Barrett write that multiple perspectives—to include not only humans but also objective data sources—can aid performance management. “The holistic nature of this approach reduces bias inherent to manager ratings while inviting detailed feedback on aspects of performance that are difficult to measure,” they note.

Once performance management enters the realm of technology, businesses can consider artificial intelligence as an answer. Andy Roberts, executive vice president of product at software company Zensai, writes in “Balancing Human Judgment and AI in Performance Reviews” that AI “doesn’t play favorites or get swayed by emotions,” so individuals perceive it as more objective. In addition, AI can manage performance data with greater efficiency, finding patterns that help managers understand their direct reports.

AI, of course, is fallible. It also can have biases. Human managers, however, can understand extenuating circumstances that may affect team members’ performance and strive to inspire workers to do their best.

So, as Roberts notes, “Performance conversations should be based on more than metrics and serve as opportunities to motivate and connect with your direct reports.”

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