Managing Performance in the 21st Century

September 30, 2015

Performance management continues to be a foundational element of an organization’s talent management efforts. Generally, its purpose is to support and improve an employee’s performance – not just assess it—and represents all of the processes that managers may use to effectively lead, manage, develop, reward and assess employees.[1] Or at least it should.

Yet, the historical performance management process has been fraught with difficulties–hence the revolution that can be seen in that process today. Rather than a once-a-year event, many leading-edge companies are now viewing performance management as an ongoing series of activities, with a greater emphasis on coaching and supporting employees rather than an end of year assessment and evaluation.[2]

The Key Word is “Continuous”

Deloitte Consulting LLP’s Bersin by Deloitte research demonstrates that respondent organizations with an ongoing focus on performance management have better employee, talent, and business results. [3] In these organizations, effective performance management is a series of ongoing activities – goal-setting and revising, managing and coaching, development planning, and rewarding and recognizing – with performance appraisal events interspersed throughout.

For example, organizations which have employees revise or review their goals quarterly or more frequently tend to have stronger financial performance and are better at managing costs than those that do not[4]. Further, respondent organizations that are effective at teaching managers to coach have higher employee productivity and engagement, and better customer satisfaction and financial performance than organizations with ineffective coaches[5].

Changes in performance management thought and theory can have important ramifications for the workplace. In addition to the one-and-done approach evolving to a continuous model, performance management itself has become more data-driven, rather than relying on assumptions. In many cases, the focus has changed significantly from appraisal to development.

This change in performance management practices affects the technology solutions that underpin those activities. Performance management technology solutions should support the rapidly evolving – some would say even revolutionizing – performance management practices today.

Future-Proofing Performance Management

To help “future-proof” your performance management technology selection, consider functionality in coaching management, assessment, analytics, continuous learning, and mobile delivery. In addition, the ability to ascertain and track goal completion and to report on progress of a team is typically important to managers and HR professionals alike. Today’s performance products often provide easily understood, graphical representation of metrics that indeed matter to managers.

However, even the best technology cannot compensate for poor practices. As interest in investment in performance management technology increases, we recommend an equal investment in review of your corporate strategy and performance management practices as well[6].

[1] The Guide to Performance Management Software 2015: A Roadmap to Performance Management and the Solutions that Support It. Katherine Jones, Stacia Sherman Garr, and Sally-Ann Cooke. Bersin by Deloitte. 2015.

[2] In previous research, we found that the percentage of organizations using a coaching and development model of performance management has increased by 10 percentage points in the last several years. For more information, please see, High-Impact Performance Management: Designing a Strategy for Effectiveness, Bersin & Associates/ Stacia Sherman Garr, August 2011; also see “Evolving Performance Management,” Stacia Sherman Garr / Bersin by Deloitte, July 2015.

[3]The Performance Management Framework Evolving Performance Management to Fit the Modern Workforce. Stacia Sherman Garr. Bersin & Associates. May 2011.

[4] “High-Impact Performance Management: Using Goals to Focus the 21st-Century Workforce,” Stacia Sherman Garr / Bersin by Deloitte, December 2014.

[5] “High-Impact Performance Management: Maximizing Coaching,” Stacia Sherman Garr / Bersin & Associates, November 2011.

[6] For more information on leading performance management practices, please see the Bersin by Deloitte High Impact Performance Management series of reports.

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