From HR People + Strategy
The business value of traditional performance management models is collapsing. Instead of clarifying expectations and building morale, legacy annual appraisal models of performance management can alienate talented and typical employees alike. While personal and enterprise tools and technologies for performance enhancement have radically improved; performance management systems have not.
Recognizing these realities, growing numbers of companies are tying performance management more closely to operational success and less closely to their operations’ calendar. This shift—toward making performance management more business-value relevant—is having a dramatic effect on how human capital is managed in the enterprise. Findings from the 2019 Performance Management Global Executive Study and Research Project, sponsored by McKinsey & Company, identifies five key facets of smart investment in performance assessment, accountability, and capability:
1. On-Demand Feedback
Formal feedback processes have typically been periodic, perfunctory, and problematic. Continuousness is now becoming king. Just as people rely on Google Maps or Waze to manage real-time expectations around travel, employees need to be able to manage real-time expectations around work.
Performance management tools and platforms should facilitate ongoing feedback on individuals’ progress, growth, and development opportunities. Feedback will increasingly be automated, customized, visualized, and communicated in different ways. Executives must determine how best to define the feedback experience for their workforce. Culture will matter more. Senior management must develop shared perspectives on performance management’s purpose in their organization.