Without talented and dedicated people, a business is little more than a great idea. While this seems obvious, companies didn’t always focus on employee performance management to stimulate growth and satisfaction as they do now. Developments in this area over the last few years have brought this truism home like never before.
Low unemployment rates and a critical need for technological skills have created a war for talent. As a result, businesses recognize that to stay competitive, they must find ways to bring out their employees’ best performance, by ensuring that they feel a sense of belonging and purpose. Increasingly, companies realize that to succeed, they must create an employee-centric culture and employ the latest performance trends, because they are able to hire, retain and develop employees.
For the last three years, our posts on employee engagement and management trends have been our top performers, showing that the term consistently resonates with managers, company leaders, and HR professionals. But employee engagement is really a metric to understand the success of your overall employee performance management strategy.
We’ve assembled this list of top trends to help you create or refine your employee performance management strategy in 2019.
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.
In 2017, Deloitte’s Global Human Capital Trends reported that 70% of companies were in the process of reinventing their HR performance management process. Just a year later,76% of companies surveyed have reinvented their performance management to be more continuous. Organizations are realizing that the old way of doing performance management no longer works (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 the future, 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 are shifting their focus to improve employee experience. Even though 83% of HR managers agree that employee experience is very important to the success of the organization, not everyone understands what employee experience is.
It is more than perks and and vacation days, as 15Five co-founder Shane Metcalf noted in his article inHR Technologist
“The employee experience is the human experience: the thoughts, feelings, emotions, decisions and overall qualitative experience that anybody has while working at a company. It’s how someone feels, the quality of their relationships and communications and the level of performance that they are supported in achieving.”
Creating a positive employee experience requires long-term commitment, and in many cases, a mindset shift that cascades from the C-suite down. Instead of focusing on how to get the most out of employees, leaders instead consider how they can help employees be their best. This means equipping people to meet their goals, implementing effective employee training and development strategies, and helping employees feel more passionate and creative about their work. It takes into account how to design work culture, technology, and the physical environment.
The employee experience 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, it will be an indispensable aspect of running a business.
According to the 2018 Deloitte Global Human Capital Trends report, 84% of leaders surveyed said analytics was one of the most important trends. Why? As companies try to improve their ability to lead people, they are relying on data to provide insights that can help with issues like productivity and employee engagement.
Regardless of how well-meaning a company’s performance intentions, analytics can show what a company’s results really are. This can be a very useful mirror, particularly when companies want to tackle issues like diversity and pay equity.
HR is investing heavily in the area of people analytics, Deloitte reported, with more than 70% of respondents saying they are currently in the middle of major projects that will help them integrate data in their decision making. Much of the people analytics will be fueled by AI and robotics, the Deloitte report said. AI will become an HR helpmate, identifying and interacting with recruiting candidates and helping employees explore career options.
As companies can collect more and better data on turnover, team interaction, wellbeing, and employee feedback, managers can make more informed decisions and improve the overall 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.
Employee training software also puts staff in control of their development so that they can add to their skillset with on-demand content. Training software 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.
As we venture into this new year, the key distinction for performance management strategy is a focus on the whole employee. This ranges from physical, emotional, and mental well-being to facilitating their personal and professional development.
Continuous performance management will be the focus as more companies embrace a more agile and data-driven approach to helping their people succeed. People analytics tools and other HR technology that supports performance management will help managers be more involved in every aspect of the employee lifecycle.
As more organizations integrate employee performance management trends and adopt best HR practices of ongoing conversations, employee recognition, and reforming their annual performance review process, managers will build authentic work relationships and nurture employee development and growth.
Ultimately, organizations won’t just produce positive business outcomes; by helping their employees realize their best selves, they will create a more positive impact for customers, managers, investors, and for the world at large.
David Mizne is Communications Manager at 15Five, continuous performance management software that includes weekly check-ins, objectives (OKR) tracking, peer recognition, 1-on-1s, and 360 reviews. David’s articles have also appeared on The Next Web & The Economist. Follow him @davidmizne.