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How to Transition to the Future of Performance Management

Many employers are hesitant about making the transition to data and analytics in employee-performance assessment. Here's how to ease that problem.
How to Transition to the Future of Performance Management
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Employers continue to experience widespread employee disengagement, which has a negative impact on performance. After all, unenthusiastic workers won’t feel motivated to push themselves, and this problem may even hold other employees back.

Related: 4 Ways to Avoid the Worthless Annual Performance Review and Give Valuable Feedback

It’s no surprise, then, that employers are seeking new ways of managing their employees. A December 2016 survey from the Institute for Corporate Productivity found that 67 percent of the 244 companies participating reported that rethinking their current management practices for employee performance was on their agendas; 59 percent said feedback from employees was the motivation.

What's important here is that the big trend in performance-management assessment is the shift toward data and analytics. However, many employers are hesitant about making such a big transition.

Here are several tips on how to ease that transition to the new and improved ways of reviewing performance in the workplace:

Accept the past as the past.

To advance to the future, employers must let go of the past -- and that means evolving beyond the annual performance evaluation. Deloitte’s Human Capital Trends 2014 report found that 58 percent of the 583 executives surveyed said they believed that their current performance management approach was driving neither employee engagement nor high performance.

Simply put, it’s time for a change. Annual reviews are ineffective and need to be replaced with a more meaningful, forward-thinking approach.

Several large companies have openly abandoned reviews and aren’t looking back. For example, Adobe started performing “check-ins,” or ongoing discussions between employees and management. These offer feedback, recognize wins and set expectations that are both timely and consistent. Adobe's new strategy saved the company about 80,000 hours of its managers' time in the annual review process.

Similarly, GE holds informal “touchpoints” to update priorities with its employees. The company uses touchpoints as coaching opportunities, to provide ongoing, impactful feedback. Performance data is the cornerstone of this style of performance management.

Related: 4 Unconscious Biases That Distort Performance Reviews

Look at the benefits of data.

Before making the transition to using data in performance management, companies must understand and believe the importance of their numbers. So, how does measuring and tracking performance make an impact on the company?

Data helps keep reviews unbiased and evidence-based, empowering the leadership team with details on employee strengths and weaknesses. Without data, managers have to rely on their memories and on other supervisors’ observations. This is inaccurate and ineffective.

Alternately, performance metrics reinforce any corrective feedback being offered. For example, if a sales representative is failing to retain current clients, he or she can look at customer surveys to determine what factors lead to those clients' departures. This kind of information adds credibility and substance to a manager’s input on how employees can boost their performance.

Train managers on how to evaluate.

Managers need help when it comes to providing performance evaluations, especially as data makes its way into the workplace. Don’t expect every manager to know how to effectively communicate feedback just because he or she is tenured.  

Send managers and upper-level employees to leadership training. This way, they experience a formal development course on how to appropriately talk about performance, how to guide employees to make improvements and how to receive employee feedback.

No matter what degree the formality of the interaction, performance reviews should be positive experiences for both the employee and the manager. This doesn't mean that interactions have to be all praise. Make criticism constructive, and focus on the future and impactful changes. When management dwells on the past, employees do, too. In addition, growth happens "now" and "tomorrow," not in clinging to yesterday.

Using performance metrics, managers should compile a list of talking points that they can reinforce. This will ensure that employees have a context for the advice and are better equipped to put feedback into action.

Keep it ongoing.

When tracking real-time data, companies should be using that data on a regular basis. This empowers employees to make the right choices, in an effort to prevent any major mistakes.

In these ongoing, regularly scheduled discussions, employees should also have a voice. Encourage managers to treat these discussions like a coaching experience that is tailored to each individual. Frequent informal check-ins keep employees engaged in their performance so they won’t be surprised during their formal review.

Related: 4 Ways to Avoid the Worthless Annual Performance Review and Give Valuable Feedback

Create action plans.

What good is a review without takeaways? Train managers on how to create individualized employee development plans that keep workers growing and learning. They should evaluate employee strengths and base their action plans on those strengths.

Set clear objectives; then create development programs consisting of formal training, coaching sessions, mentoring and other educational opportunities. Break these actions into a timetable and help employees hit their mini-goals on time by tracking progress with performance metrics.

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