Feature
The business of employee performance is evolving, driven by ongoing changes in both workforce and workplace, and companies are increasingly turning to technology as an enabler of their performance management strategies.
With reason. Modern tools do far more than automate the employee performance management process. They have democratized the process, added layers of value with data aggregation for insights and analysis, and shifted the center of gravity of performance management from HR and managers to functions, teams and individuals.
Let’s take a look at the role of modern performance management systems in team enablement, growth and development.
A Tech-Enabled Evolution
Traditional performance appraisals have long been arbitrary, one-time, backward-focused and directly linked to increments. That’s no longer the norm.
Since about 2000, companies have been gradually giving up traditional performance appraisal systems in favor of more learning and development-focused efforts. The field has evolved from appraisals to assessments to evaluations and now, to management.
Marcus Mossberger, future of work strategist at software platform Infor, said the concept of performance management has morphed into a valuable, ongoing dialogue with the workforce. And as our need for expanded data collection and aggregation expanded over the past few years, new technology enabled that expansion and allowed for the ensuing discussions to occur anytime, anywhere.
While leaders today may still be working to better understand the importance of these interactions, Mossberger believes that current labor shortages will force the issue in the next decade.
Related Article: How to Create a 360-Degree Feedback Process That Actually Helps
Enhancing the Employee Experience
Performance management seems to have already hit its stride in progressive organizations as an opportunity for innovation and employee retention, and a tool for creating a differentiated employee experience.
Global IT consultancy TCS, recognized by the Top Employer Institute as the number one Top Employer in the United States, Europe and Asia Pacific in 2022, has over half a million employees worldwide. Its focus on innovating performance management systems contributes greatly to that success.
TCS moved to a continuous feedback-based performance management process in 2017 and formalized it as the “Feedback to Feedforward” model in 2021. Managed via a collaborative cloud-based platform, the model provides all stakeholders with a holistic view of individual performance in alignment with organizational priorities.
The system allows employees to carry out self-directed improvement at any time, while managers can access descriptive and diagnostic insights as well as sentiment and predictive analytics. These early performance indicators and predictors help design more practical development plans for ongoing course correction.
Related Article: AI Is Changing Learning & Development. Here's How
From Top Down to Bottom Up
Keeping pace with a world of highly agile work practices — people working on multiple projects with multiple leaders, and lots of gig workers throughout the company — needs a new breed of tools, wrote Josh Bersin. “We’ve moved from a world of ‘top-down’ performance management to ‘continuous performance management’ to what I’d call ‘team-led or manager enabled’ performance tools.”
Modern performance management tools enable change in several major areas:
- From one-time to ongoing: No longer a drain on the time of the manager or the spirit of the “managed,” annual stack ranking methods have mostly given way to continuous evaluations and check-ins, coupled with practical and employee-specific improvement plans.
At a functional level, technology has made it faster and easier to capture both data and conversations for use in important (read compensation and promotion) decisions down the line. But more importantly, said Mossberger, technology enables continuous performance engagement, so managers and employees can have short, meaningful interactions, including peer feedback, on an ongoing basis. By reducing the administrative burden, better technology makes people more apt to participate in a meaningful performance management endeavor. - From singular measurement to holistic evaluation: Arbitrary measurement that only looks backward rather than increasing or improving anything for the future is futile. Evaluations today have evolved from a narrow concept of “productivity measurement” to a more holistic notion of performance management, including goal management, check-ins, feedback, alignment and coaching paradigms across personal and professional development fronts.
These multiple interactions and check-ins are made possible via an array of functionalities including pulses and surveys, feedback forms, quizzes and even gamification. - From a one-way top-down to a multi-directional approach: Modern performance management involves all stakeholders and includes elements of self-appraisal and bi-directional coaching.
- From silos to collaboration: Performance management today is a coherent, connected and collective process that ties back to business, function, team and individual goals and contexts.
Automated tools help make instant connections between diverse, multi-system data points to present a holistic picture in a user-friendly manner. - From rigid and opaque to agile: Performance management systems today are designed to be flexible, responsive, reflective, collective and transparent, providing all stakeholders instant and real-time access and enabling self-directed rather than manager-imposed action.
The culmination of the process is a summary of ongoing efforts rather than a mystery score unveiled at year-end. Modern tools keep highly sensitive employee data secure while giving controlled access to each stakeholder based on their credentials.
Related Article: How Gamification at Work Fits Into Learning & Development
Must-have Capabilities of Performance Management Platforms
In the current world of work, technology must do more than automate and bring in efficiency, said Pooja Chawla Sanghavi, the global head of performance management and R&R at TCS. It should also facilitate informed decision-making through intelligent analytics, mass personalization of the performance experience through the use of AI and cloud platforms, as well as be agile enough to support the ever-evolving nature of business — and thereby the ever-changing performance management models.
Mossberger added that modern platforms should also be able to pull and aggregate data from a wide variety of HCM and non-HCM sources to identify individual and organizational trends and present a comprehensive analysis.
Equally important, he said, is a simple, intuitive interface to make the interaction quick and easy and drive adoption across teams.
He also sees AI as an increasingly common element in technology platforms, to nudge individuals and managers at the right moments in the journey to improve performance, productivity and experience.
Key Considerations for Choosing the Right Performance Management Platform
Like with all technology, performance management presents a problem of plenty. Choosing the right platform is important because business needs are increasingly dynamic and functionalities can become obsolete quickly.
Chawla Sanghavi said the selection of any technology should depend on the company’s performance management model, which itself must be aligned with the organization's vision and strategy. This is critical because performance management influences the organizational culture from the standpoint of what behaviors are encouraged and how an employee gets recognized and rewarded. The key to success, she said, is cultural transformation backed by technology-led innovation.
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Her three go-to considerations before investing in performance management platforms are:
Is the technology future-focused?
It must align with current organizational needs and cater to foreseeable future needs in terms of scalability and adaptability, along with technological & performance management process innovations.
Are user experience and diversity capabilities at the core of the system?
Performance management is one of the most important platforms because it is used by each employee of the organization. Ensuring an excellent user experience while meeting the accessibility needs of diverse users is critical, especially for large or global enterprises. These unique diversity needs include but are not limited to differences in geographies, cultures & languages, specially-abled employees, gig or part-time employees, etc.
Is the platform capable of generating insights and supporting multi-level integrations?
The performance management process is interlinked with other functions such as training and rewards. The platform must therefore be capable of providing seamless integration and information flow across the board. Additionally, automated and intelligent insights can immensely support the organization in making data-driven decisions and foreseeing trends through predictive analytics.
Mossberger added that HR leaders should also ask themselves about the planned role of generative AI in their performance management processes. As the technology gets better at proactively collecting and aggregating data across the HCM system such as goal attainment, previous performance data, compliance data, training and development data, employee relations data, etc., he believes generative AI will lead and enable the next iteration of performance management platforms.
An AI-powered functionality capable of writing draft performance reviews for managers tops Mossberger’s wishlist for must-have capabilities. Managers can then add their perspective and focus on having a meaningful conversation with their direct reports.
He’d also like to see further simplification of data aggregation from disparate systems so that most of the subjectivity can be removed from the feedback process.
Finally, Mossberger added, future performance management systems, powered by AI, should have the ability to better and more effectively quantify the performance of knowledge workers.
