performance management practices

Changing trends in performance management practice in global context

The traditional end-of-year appraisal, designed in the 1970s, is clearly not effective anymore. Global Human Capital Trends (Nathan Sloan, Stacia Garr, Karen Pastakia, 2015) research showed that 82 percent of companies reported that performance evaluations were not worth the time. A separate study reported that 41 percent of companies found widespread manager bias, and 45 percent believed performance evaluations did not motivate employees.

Today, as companies operate as a network of teams, careers and learning are strategic and companies are shifting from “jobs to work “in their operations, The need to align goals, provide feedback and coach for performance in real-time continuous and multi directional.

Hundreds of companies-including Adobe, Dell, Microsoft, IBM, GE, Goldman sachs, New York life, Juniper Networks, and Cisco continue experimenting with new processes, and most are finding great value. The focus has shifted from talking about people to talking with people in open conversations.”Our new performance approach is focused an improving discussions, creating frequent check-ins, and creating a developmental focus, “said Amy berg, director of talent at Adidas group.(N.Sloan et.el., 2017)

A critical goal in PM experimentation is to devise ways to align it more closely with business outcomes as organizations become more team-centric, focusing just on an employee’s individual achievements to evaluating the contribution to a team and the team’s impact on driving overall business goals.

But the biggest limitation of annual reviews, the main reason more and more companies are dropping them-is this: with their heavy emphasis on financial rewards and punishments and their end –of-year structure, they hold people accountable for past behavior at the expense of improving current performance and grooming talent for the future, both of which are critical for organizations’ long-term survival. In contrast, regular conversations about performance and development change the focus to building the work force your organization needs to be competitive both today and year from now. Estimates that about 70% of multinational companies are moving, towards this model, even if they haven’t arrived quite yet. (J.Bersin, 2016)

Cisco, GE, Google have all pioneered this model. These companies have built or bought sophisticated software to understand team dynamics, evaluate group goal systems and gauge how effectively employees contribute to their teams. The goal of PM is thereby transformed from boosting an individual employee’s performance to improving the result of the team. If the team wins the employee wins. If the team wins, the company wins.

References

D.Rock,B.Jones and C.Inge,(2015),Reengineering performance management: how companies are evolving PM by beyond ratings, Neuro leadership institute.

B.Hoffman, C. Lance, B.Bynum and W.Gentry(2010) “Rater source effects are alive and well after all”, Personal psychology, 63(1), pp.119-151

J.Bersin,T.McDowel, A.Rahnema and Y.Drume, (2017), “The organization of the fyture:Arriving now”, Human Capital trends:Rewriting the rules for the digital age,Deloitte university press.

P.cappeli, A Tavis, (2016) “The performance Management revolution”, Harvard business review. (http://hbr.org/2016/10/10/the-performance-management-revoulution) accessed on 05^th Dec. 2017 on 2.30pm.