Top Trends in Performance Management


The notion of performance in any sphere be it sport or corporate is an ever evolving subject. Given the current context and the future challenges that corporates will encounter, there is a need for a performance process which is in alignment with the aspirations of those who are getting evaluated and the expectations of those who are evaluating. Organizations will have to design their performance management processes and systems in such a manner that optimally leverages the capability and aspirations of their people.

“Some of the key trends that are emerging in performance management space are primarily focused on having very clear defined objectives and goals with clear linkages to the organization performance measured through profitability, growth, and enhanced shareholder value”

It also considers appraisee and appraiser to be central to the entire process. To successfully link performance management to company goals, one needs to constantly review, refine and reinvent the performance process. Some trends in this regard are:

Annual appraisal to give away to continuous feedback

Gone are the days when performance management was a once a year event. Most Indian companies still go through the traditional “annual performance cycle”. In a rapidly changing business environment, where quarterly results are being published, hence the need for evaluation of performance closely ties with quarterly results cycle.Also, with the inclusion of millennials in the workforce, who seek immediate feedback rather than wait till the commencement of performance cycle, makes quarterly appraisals and continuous feedback a key enabler in enhancing productivity and efficiency of the workforce.

Not only are the performance conversations going to happen much more frequently, but they are also likely to be focused more on feedback and mentoring rather than assessment. Frequent performance conversations are not going to help if the conversations are not focused on up-skilling your employees. The performance management process will produce motivated and engaged workforce only when they are centered on their own developmental needs. Organizations will have to address these developmental needs with right training programs, on the job projects and mentorship.

Focus on the team rather than the individual

Going forward, team performance will take precedence over individual performance. In most organizations Learning and development teams generally talk about how they have covered all the high potential employees in various training initiatives. Where organizations probably lack is to train people who need it the most i.e. our so called “solid citizens”. We are likely to find a lot of business and functional leaders complaining that people in their teams work in silos. They don’t work for the larger interest of the team. When our performance management processes are aligned to recognizing and rewarding individual performances, how we can expect people to be good team players.

In this context, it would be wise to expand the traditional performance discussions to “team performance” rather than keeping it focused only on individual performance. Growth oriented organizations are increasingly going to be constituted as a network of teams. How well these teams perform will decide the performance of the organization. In this context it is even more important to shift the conversation from the individual to the team.

AI is here to stay

Artificial Intelligence is already being used extensively for recruitment and learning. In due course AI will make inroads in performance management as well. AI can be extensively used to make sense of the unstructured data such as qualitative feedback generated by the performance management process. With the advent of integrated cloud based enterprise solutions, extensive data is getting collected, mined, contextualized and analyzed providing insightful analytics. Much of this data is unstructured in the form of feedback given and received. It is widely known that AI algorithms are increasingly becoming better at drawing insights from unstructured data. There lies the opportunity to use AI algorithms on performance management data to draw insights which would otherwise have not been possible.  AI can also help us fine tune our performance management process to suit the currently prevailing employee expectations. As we speak, some of these innovations are work in progress but are really not that far from being a reality. In the near future, AI would definitely reshape performance management. Advent of AI in performance management will provide valuable information to the organizations for agile realignment of organizational goals based on prevailing business environment and for better management of employee aspirations, engagement through real time feedback and on demand coaching.

Performance management will become more humanized

It will not be news that the business environment in the country is much more dynamic than what it was even just a few years back. Demographics of the workforce is changing rapidly with the current configuration of three generations of workforce.Naturally, ways of doing business and performance evaluation are becoming more fluid. Employees are increasingly under stress to continuously cope up with the changing environment. Several surveys conducted by leading providers of employee assistance programs to Indian organizations have indicated that there has been a significant increase in the number of employees who are severely depressed due to unmanaged work related stress.

Performance management conversations will have to increasingly include talks around employee’s well being and health. Performance management process should give an index of stress levels in the workforce and identify and deploy mitigating initiatives to manage stress, particularly in pockets where stress is high. Future performance management processes will also factor in response mechanism to handle employee stress and anxiety in a humane and non-judgmental approach.

Effective future Leaders will be those who become adept in providing continuous feedback, do consultative coaching on developmental needs and be humane in their approach.


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