Performance management continues to be a thorn in the side of workers, despite extensive efforts by employers and technology vendors to improve the process. That’s just one of the findings highlighted in a new report from Bersin, Deloitte Consulting.
The report, titled “Performance Management Solutions: Market Primer” consolidates research from two studies—one focused on the practice side of performance management, the other on the technology side. Together, they paint a picture of employers and solution providers attempting to reinvent the dreaded practice, which achieved a net promoter score of -60 in the Bersin High-Impact Performance Management study.
“If you had a product with a net promoter score of -60, you’d probably kill it; you wouldn’t even try to improve it, but killing performance management is not an option because it can provide a lot of value,” says Kathi Enderes, vice president, talent and workforce research leader in Bersin’s San Francisco office.
Adopting names like “check-ins” or “total performance,” organizations and technology vendors have attempted to improve perceptions of the process by distancing themselves from the term “performance management.” Such efforts have largely fallen flat, says Enderes.
“Rebranding without changing how you do it is not effective because you’re changing the name, but not what people don’t like about it, which is that it is too infrequent, too subjective, and just not value-added,” says Enderes.
The report highlights three essential activities Bersin has identified as inherent to performance-management solutions:
Goal Management: In lower-performing performance management environments, goal management is typically a once-a-year, forward-looking process where goals are set and possibly shared with a direct manager, but then forgotten until they are revisited six or 12 months later, according to Matthew Shannon, senior research analyst, solution provider markets in Bersin’s Philadelphia office. With the aid of technology, high-performing organizations turn goal management into a future-focused activity in which individuals develop short- and long-term goals that align with specific organizational objectives and can be course-corrected in real time.
Multi-Source Feedback: No matter how hard we try to be impartial, bias is implicit in everyone and it negatively impacts the performance review process, according to Enderes. The solution lies in removing bias from the process, not the person. While low-performing organizations tend to embrace practices that unwittingly embed bias in the process—such as having a single manager own the entire feedback process—high-performing ones utilize multiple sources of feedback, creating a holistic picture of an employee’s performance. Technology supports the process through automatic “nudges” to collect feedback from peers, direct reports, and other internal stakeholders at critical points in projects.
Performance Evaluation: Many employees dread the annual review because it’s a highly subjective process. Not only is it often the only feedback they’ve received all year, it proves exceedingly difficult for managers, peers, and the employee themselves to recall an entire year’s worth of contributions. While there’s been a great deal of discussion around getting rid of the annual review, most organizations still use them in some form. According to Shannon, technology can help organizations create more objective and relevant reviews by capturing data throughout the year, providing tangible examples of performance in real-time. Advanced tools, like natural language processing, can extract meaning and themes from the data, while analysis of specific projects helps ensure more accurate ratings.
“The challenge,” Enderes says, “lies in making performance management a more value-added process, so that people feel it is supporting the business and their ability to improve their performance.”