Designing Performance Management to Work for Hybrid Work
As the pandemic begins to wane in some regions, many leaders are contemplating what’s next. It’s a complicated future. Here's a few statistics to paint the picture:
- 81 percent of employees prefer a hybrid work arrangement, or not returning to the office at all, vs. being in the office full time.
- Manager effectiveness declined substantially during the pandemic, except in terms of providing employees with autonomy and having openness to new ideas.
- Just 40 percent of managers feel comfortable working and helping their team through virtual methods.
- 80 percent of executives envision a hybrid workplace, with workers spending 20 – 80 percent of their time in the office.
Given these complications, it’s unsurprising that 68 percent of executives, according to a McKinsey survey, have said their organization has yet to communicate detailed plans to employees.
But, as someone wise once said, "time waits for no one," and droves of employees will be returning to the office with a large number in a hybrid work arrangement. Leaders need a plan for accommodating hybrid work practices, especially when it comes to performance management.
Why Focus on Performance Management?
Performance management is critical, even in the most ordinary of times. It’s one of the few talent practices that touches every single employee in the organization. It helps employees set goals, receive feedback and adjust their daily work practices. Performance assessments impact compensation, promotion and a host of other job-related opportunities.
Given the complicated path ahead, leaders must finally and fully confront questions that have been bubbling near the surface of performance management conversations for decades, such as:
- How will goals be set, managed and assessed when the work’s done without the manager physically present?
- How should managers coach and provide feedback if they’re working asynchronously with employees?
- How can managers provide fair assessments when they’re not co-located with employees?
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The Peril and Promise of Performance Management in a Hybrid World
For decades, performance management has presented significant challenges for all, but research shows it can disproportionately and negatively impact diverse populations. Consider the following data about traditional performance management:
- Women are 1.4 times more likely to receive critical subjective feedback as opposed to either positive feedback or critical objective feedback.
- Women are less likely to be rated as "superb" than men, especially in a male-dominated field.
- In several studies, Black employees were more likely to receive lower ratings, lower salaries and fewer career advancement opportunities than white employees.
In addition, many experts are suggesting that women are more likely to take up the offer of hybrid work so there's at least one other data point that is especially concerning: Before the pandemic, women who are mothers were recommended for promotion less than women without children or men, with or without children.
Yet there’s reason for hope. Many of the modern performance management practices implemented by organizations in the last few years can be adapted to address the challenges of a hybrid work environment. We don’t have to completely tear down and rebuild practices that may have only been implemented recently. But we do have to make some changes. The question is, What are they?
Related Article: Now Is the Time to Redesign the Future of Work
Adjusting Modern Performance Management for a Hybrid WorldIn a study my firm conducted on modern performance management, we found that organizations which focus on three core areas are 32 percent more likely to experience high employee engagement and 97 percent more likely to experience high organizational performance. The three Cs are: culture, clarity and capability for managers.
Within each of those Cs are additional practices (Fig. 1), such as fairness, feedback, coaching, candor, clearing barriers and goal-setting and data collection.
What can organizations do to adjust their performance management practices for a hybrid work world? Many of the existing suggestions fit nicely into the 3C model (Fig. 2). Here are four practices that organizations can use to get started:
1. Goal or objective clarity is job No. 1.
In the absence of objective criteria, assessors tend to allow gender stereotypes to fill in missing information. That means when employees are not co-located with their managers, having clear expectations becomes even more critical. While this may seem obvious, it’s not necessarily happening everywhere. According to our research, only 66% of organizations require clear objective metrics for evaluation.
Organizations need to set the expectation that goals are clear and quantifiable whenever possible. This is easier for sales and other number-heavy roles, but it is also possible in other roles. For example, a writer may have a goal of getting two reviews of her documents by her direct manager vs. the three or four reviews it may have taken the previous year. There’s a great deal of material and advice out there about how to write good goals or OKRs (objectives and key results). The key point is: This nut needs to be cracked for a hybrid world.
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2. Check-ins and alignment conversations need to happen weekly.
When casual chats are less likely to happen, it’s essential that managers and employees schedule conversations to discuss feedback and align on priorities. Our research shows that high feedback cultures have a 30 percent greater likelihood of high employee engagement and a 108 percent greater likelihood of high organizational performance. Further, research from LeanIn.org finds that when employees interact more with their managers, their performance ratings tend to be higher.
It’s critical for managers to focus on giving similar-quality feedback to everyone, as some research shows that feedback can vary by demographic status. For example, a study conducted on performance feedback received by men and women revealed 88 percent of women felt they received more critical feedback than men (59 percent). Further, the feedback tends to be less actionable, specific and business related than that given to men (i.e., “you did great” vs. “you excelled at building effective client relationships”). Furthermore, vague feedback also correlates with lower performance ratings for women, but not for men.
To address these challenges, organizations can remind managers regularly of the importance of providing similar specific feedback. They can also offer managers performance support tools to help them prepare for such conversations.
3. Broaden the pool of feedback sources.
Performance management often draws on at least four feedback sources in addition to managers: direct reports, peers, managers, and senior leaders (Fig. 3). A fifth source is also beginning to emerge: technology.
While technology can aggregate and provide the other four sources of feedback faster, it can also be used as a new feedback source when used to analyze digital exhaust, such as email, calendar or Slack data, and provide employees with new insights about their behaviors.
If your organization doesn’t already leverage a range of feedback sources, consider adding more. For example, crowdsourcing feedback can yield better performance insights by addressing issues of recency bias and also bringing in more people who may have observed performance.
One option is to weight feedback so that the reviewer indicates the amount of time they observed the employee. This could be especially important for remote work situations since overall exposure to individuals may be limited.
4. Make time to reduce bias in assessments.
Organizations need to accept that bias may exist in initial assessments and build in safeguards to reduce that potential bias. Some ways to get started include:
- Conducting performance assessments during less busy times of the year.
- Creating different opportunities to assess performance, not relying on a single period.
- Requiring managers to discuss direct reports’ performance with leaders and peers.
- Analyzing performance scores by gender and discussing potential anomalies.
Some resources also exist that can be provided to managers, such as this free bias interrupter toolkit.
Moving Forward into the Unknown
As many organizations return employees to the office this summer and fall, we’ll have to redesign talent practices to better fit a hybrid world. We need to be certain as and we do this that we aren’t unintentionally disadvantaging people through those new practices and policies.
By designing performance management practices to align with the 3C model and adjusting it to the new hybrid working world, we have the opportunity to both enable people to do their best work and have a fair shot at being recognized for it.
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About the Author
Stacia Sherman Garr is co-founder and principal analyst at RedThread Research and a thought leader on talent management, leadership, diversity and inclusion, people analytics and HR technology.