It is that time of the year where employees get busy filling their performance sheets. Managers sit down with them for a conversation about the same and ratings are allocated on the basis of the assessment. Since the world has been facing an unprecedented crisis, it has challenged us to do a lot of things differently this year — some that were unimaginable before the crisis struck but are very much possible today.
Performance management is also an area that has debated a lot of change, however, the same has been slow to come by. Just like a lot of other changes, this is a good time to realign our performance management strategies to make it more realistic and effective. Before we discuss what must change, we need to understand why this change is required? What are the contextual changes that demand us to relook our current strategy?
Work – As the crisis set in and all organisations hustled to build an all remote work environment. Many people had to take up things they have never done before, perform roles beyond their designated set of responsibilities. This fluid nature of the workforce will become a norm and as one individual works under multiple managers and different teams, we would be required to rethink who assesses performance and how.
Workplace – The traditional workplace is set to transform. We are moving towards a future that will be seeing a hybrid workplace emerge. Only a few will be required to be in the office all the time, for most people a mix of work from home and work from the office will be the norm. As the workplace evolves, methods of collaboration will also change. The objectivity towards assessing individual performance will become sharper.
Work is the means to an end for many of the millennials and for the Gen Z population, work is quickly becoming a means to an end. The gig economy is the biggest outcome of this phenomenon. Talented people will do part-time jobs to pay their bills so they can simultaneously explore their entrepreneurial spirit or their passion. One set of rules of management for performance will therefore not apply to everyone.
Following are some of the changes that will redefine the appraisal systems:
Traditional goals will become redundant – The individual goal sheets will reflect greater flexibility. Measures of performance too would undergo change. The new reality performance will be assessed on the outcome and not simply based on the task at mid-management levels. We will have to train managers to think of the bigger picture rather than just what occupies their calendar and bandwidth, taking greater accountability of how one’s role has an impact on larger goals of the organisation. This will become crucial at all levels below senior leadership as well.
Continuous feedforward conversations – The meaning of the short-term and long-term has undergone considerable change as the uncertainty of the business environment increases and agility becomes essential. One cannot wait for the end of the year to give feedback on what went wrong. The conversation, therefore, needs to be feed-forward continuously to help employees navigate the unchartered territories well and have adequate opportunity to align their performance to the evolving expectations.
Innovation will become a key metric for everyone – We have to make space for innovation. If we are too focused on achievements — sometimes, we run the risk of small achievements being held up high and the bigger picture being lost. This change will enable people not just to think of short term gains but building more long term sustainable advantage in their respective roles
As we move further into the future, few other trends will take over the PMS landscape are mentioned below:
Frequency- The frequency of assessment will continue to increase — they will move to being monthly and eventually weekly or let’s say activity-based (especially in a matrix structure especially). The complexity of managing a process where performance is assessed so frequently will be solved by technology and mobile will play an important role therein. HR leaders will be at the forefront of heralding this change.
Matrix- There is a scope for a lot of science and research to build around the area of assessing performance in a matrix reporting structure. Like the fluidity of an employee in the organisation increases — the matrix in the future will not just be restricted to the leadership teams, but will find its place at every level in the organisation. The HR function will be responsible to make this happen both from a change and process standpoint.
Hyper customised performance management
The biggest challenge for performance and rewards professionals will be to customise and break-up the assessment plan for several individuals. The basis of such customisation will be:
a) Nature of job– Different assessment plans for full-time employees, part-time employees, temporary workforce, consultants and gig workers etc.
b) Goals and aspirations- Not everyone may want to be a people manager, not everyone may want to grow at the same speed. For different people, their job will have a different meaning and purpose — the PMS of the future will need to account for this.
c) Risk goals– No matter which role you are in, goals related to management and mitigation of risks will become essential at every level.
A lot has already been done by organisations but the coming times are interesting and hold many challenges for HR professionals to develop and align the performance systems with the changing times.
— The author is chief people, operations, and customer services officer, Aviva Life Insurance
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