Over the last year, we’ve seen the employee performance management landscape evolve like never before. That’s evidenced by the fact that performance management is becoming a ubiquitous term, but what does it even mean? Is it the next in a long line of business buzzwords, joining the likes of employee engagement and workplace culture?
Employee Engagement Trends. Those were the topics of our top performing posts in 2016 and 2017, proving that the term still resonates with throngs of managers, company leaders, and HR professionals. While performance management software has helped drive the evolution of employee engagement, there’s so much more to the relationship between managers and employees besides that one outcome.
Performance Management is how we’re working together as teams and managing people. We can let the term slip into the meaningless buzzwords bucket, or we can rally around it and commit to building authentic work relationships and nurturing employee development and growth — not merely to produce positive business outcomes, but because that’s the impact we want to have on the world.
Global employee engagement remains ridiculously low, and productivity is at a standstill. So more and more organizations are adopting best HR practices of ongoing conversations, employee recognition, and reforming their annual performance review process. If for no other reason than to improve business outcomes.
But fret not progressive business leaders! The movement to foster genuine relationships between managers and employees and to rehumanize business is gaining steam, and we can expect more in 2018. Here are some trends to look out for this year that will be redefining the future of People Operations roles and how business gets done:
Companies are always looking for ways to improve employee productivity, and they can learn from high-performing organizations. Companies like Apple, Google, and Netflix are 40% more productive than the average company by using a mix of employee performance management strategies that focus on organizational structure and trust-building.
According to research by Bain & Company, the way companies construct their teams has a major impact on productivity. Apple and Google for example, dedicate 95 percent of their top talent to key business functions, as opposed to spreading top talent across many areas.
“It took 600 Apple engineers fewer than two years to develop, debug, and deploy iOS 10,” Bain’s Michael Mankins told Fast Company. “Contrast that with 10,000 engineers at Microsoft that took more than five years to develop, debut, and ultimately retract Vista. The difference is in the way these companies chose to construct their teams.”
Mankins also pointed out that extending trust to employees improved productivity and supported employee growth and development at top companies. He said organizational rules and processes often prevent people from getting things done or improving in their role. Netflix avoids a common process issue, expense management, by trusting its employees. The company has no expense policy. Instead, it trusts employees to act responsibly.
“The company is telling employees, ‘We assume you are not here to rip off the company, and we’re not going to put in place processes that consume human capital, waste time, and zap energy,’” Mankins explains.
Look for more companies to mimic the leaders in productivity by organizing teams to improve output in critical areas, as well as eliminating some bureaucracy by trusting their employees more.
According to Deloitte’s Global Human Capital Trends report, 70% of companies are in the process of reinventing their HR performance management process. Organizations are realizing the old way of performance management no longer fits the way of business today (something we frequently cover on this blog).
Today’s workforce desires authentic relationships between employees and managers, as well as opportunities for employee development and advancement. This generation has ushered in the disruptive age of continuous performance management.
In 2018, expect more organizations to embrace continuous performance management. As Josh Bersin notes in his article, HR Technology in 2018:
Continuous performance management is possible, it works, and it can transform your company. We’re not talking about doing away with ratings, rather we are talking about building a new, ongoing process for goal setting, coaching, evaluation, and feedback.
Very few software solutions integrate all of the HR Technology tools that companies need to develop and advance their employees by checking-in continually throughout the year. Look for continuous employee performance management solutions that incorporate objective (OKR) setting and management, weekly feedback surveys, 1-on-1 meetings, and quarterly reviews.
Continuous performance management software will make it easier for managers and employees to collaboratively map out career trajectories, and to provide the coaching and mentoring that people need to become their best selves.
While much attention has been focused on improving employee engagement, organizations will also shift focus to improve employee experience. This involves a more holistic approach that follows the entire employee journey, much like companies map the entire customer journey.
Employee experience aims to provide positive touch points in work culture, technology, and physical environment. This includes equipping people to meet their goals, implementing effective employee training and development strategies, and helping them to feel more passionate and creative about their work. Organizations will design the employee experience around data on how people work, make decisions, and organize their day.
The concept is gaining traction and has shown to improve employee involvement and employer brand commitment. Organizations such as Facebook, Google, LinkedIn, Ralph Lauren, Adobe, and Airbnb have made employee experience a key part of their employee development strategy. Look for more companies to do the same.
People analytics will no longer be a nice-to-have part of the HR performance management toolkit. It will be an indispensable aspect of running a business.
According to a Bersin by Deloitte report, more than two-thirds of companies are now using an analytics platform, and organizations are investing in this data in a major way. As Bersin explains, “Employee-related data is just as important or more important than customer data, because it tells you the secrets of how to manage your business better.”
As companies can collect data on turnover, performance rating, team interaction, wellbeing, and employee feedback, managers can make more informed decisions and improve the employee experience.
Personalization has become a key part of creating a delightful customer experience, and organizations will use the same approach in their performance management efforts. A one-size-fits-all management approach can’t bring out the best in employees because every employee is different.
Workforces are more diverse than ever, with teams consisting of people from various generations, backgrounds, cultures and locations–with the increasing prevalence of remote work arrangements. (About 43% of Americans spend some time working remotely, a four percentage point increase from four years earlier.)
Relying on individual data as well as feedback conversations provides managers the tools for tailoring their performance management system, curating employee development strategies and customizing other aspects of work for each individual employee. For example, Eric Lesser and Maria-Paz Barrientos of IBM write about how personalizing the work environment can make a difference in their article in Workforce:
Some employees are fine working in open, collaborative spaces; others are distracted. Giving employees options where they work, depending on the task, can affect short-term productivity and longer-term engagement.
In the coming year, more managers will change their management strategy to take a personalized approach to motivating individuals to help them meet their performance goals, which in turn will boosts team performance.
According to Gallup, 87% of Millennials cite access to professional development and career growth opportunities as the most important factor in a job.
Look for companies to respond to this need by providing more employee training and development opportunities, but not the traditional kind. Organizations are moving toward micro-learning, which are short, informal, self-directed and mobile-optimized content on single topics. These can be brief videos, webinars, podcasts, or even games that provide learning materials in an easy-to-absorb format.
These employee development methods put staff in control of their development so that they can add to their skillset with on-demand content. It makes learning more continuous and engaging.
There will also be a social aspect to this type of training, with the growth of platforms such as Slack, which allow employees to quickly share ideas. Learning and development content will continue to spread organically through these employee networks.
When you allow employees to do what they do best, it makes your team more innovative and productive. Research shows that 60% of employees want the ability do what they do best, regardless of their role. They are driven by purpose and managers who actively promote their development.
What does this mean? The end of traditional job roles.
Companies will move to what’s called “job crafting,” which are job roles built around an employee’s strengths and interests. Tom Haak, founder and director of The HR Trend Institute, describes how it works in his article, The End of Static Jobs:
When there is an assignment, there is a process to look at the capabilities (qualitative and quantitative) required for this specific assignment. The wishes, needs and capabilities of people connected to the organization are known, or captured as part of the process… Teams are not built of people with specific fixed jobs, but of people who have specific skills that are needed to deliver the assignment.
Of course, this shift will rely on organizations using two of the employee performance management trends mentioned earlier—(#4) people analytics and (#5) individualized support—to understand the specific capabilities and desires of employees.
Performance management has undergone a dramatic shift in recent years, and organizations are starting to get a hold of what works best for them. Or rather, what helps their employee become their best, for themselves and the company. And as new performance management tools enter the market, they’re helping to reinvent global HR initiatives every year.
Continuous performance management will be the focus of 2018. People analytics tools and other HR Tech will allow managers to be present every week, month and year of the employee lifecycle. This will lead to increased business growth, recruitment, and onboarding, and less of the employee lifecycle that everyone hates… terminations and exit interviews.
David Mizne is Marketing Communications Manager at 15Five, continuous performance management software that includes weekly check-ins, objectives (OKR) tracking, peer recognition, 1-on-1s, and reviews. David’s articles have appeared on The Next Web & TalentCulture. Follow him @davidmizne.
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