Performance Management in a “Social” World – What Needs to Change?

By Niranjana Harikumar
21/1/2013

The workplace landscape has undergone a sea change over the past few decades.  The employee-employer relationship has also transitioned, with corresponding shifts in performance expectations. From an era of “equal pay for equal work,” the organizational paradigm shifted to “pay for performance” a few decades back. Similarly, from an overarching focus on a year-end “performance appraisal” process, there has been a shift to a more holistic approach of “performance management”. Beyond organizational buzz words of “balanced scorecard,” “management by objectives,”“Hoshin Kanri” and other methodologies, the process of performance management has gradually become less top-driven and more collaborative. This dovetails with the changes in the employee demographic as Baby Boomers gradually exit the system and Gen Xers and Gen Yers become the vast majority.

The challenge for organizations, therefore, is to tailor our existing approach towards performance management to make our workplaces future-ready and to cater to the unique and unprecedented expectations of the Gen Y employees.

Performance Management: What Will No Longer Work

• Performance Management as an Annual “Event”

For a generation that has grown up in a feedback and media-intensive environment, annual performance feedback and performance appraisal “events” will no longer be acceptable. In their daily lives, Gen Y receives instant “likes” and “comments” for their status messages. The expectation from the workplace will be no different – Gen Y will expect instant informal feedback as well as ongoing year-round dialogue rather than a formal, annual event. Performance management will become real-time. It will help employees and teams make real-time adjustments to their work on the ground and enable continuous improvement.

• Performance Planning as a Top-down “Cascade” Process

Most accepted management systems incorporate top-down performance planning that happens at the beginning of the financial year where Key Result Areas (KRAs) are cascaded level by level in a top-down manner. Thus, outcome measures at the topmost, senior management levels gradually get converted into activity measures for the lower, junior most levels. Therefore, the visibility of the junior most executive to the overall organizational or strategic goals usually remains limited at best, in these systems. There is an overall feeling of acute helplessness as one is handed over goals and metrics for execution through the year.

The performance management system of the future will give much greater autonomy to the employee down the line, thus increasing accountability and buy-in. Goals will increasingly be collaboratively defined by employees across the organizational hierarchy rather than top-driven. Employees will talk about performance goals and their impact on the organization’s purpose and strategic goals. They will together come up with action plans and make commitments for the future.

• One to Many Performance Appraisal

The norm in performance management has been of a supervisor who “manages” the performance of multiple employees and “conducts” their annual performance appraisal. In the days to come, performance appraisal will become the organizational equivalent of a Facebook page where feedback is given and received by all the team members, irrespective of their position in the hierarchy, on an ongoing basis. Thus, the responsibility of a performance appraisal will no longer rest with one individual – it will increasingly become more and more collective and reciprocal. An ongoing, iterative approach to performance feedback and appraisal will become the norm.

• Performance Feedback Focused on Negatives, Rather than Positives

Traditional performance appraisals treat positive feedback as a mere formality with negative, “developmental” feedback often being given much greater emphasis. The employee of the future will expect regular pats on the back, like the ubiquitous social network “like” on an ongoing basis. Therefore, the focus will no longer be on “appraising” or “evaluating” performance but on “nurturing” it.

• Form-filling and Lengthy Approval Processes

Most large organizations have archaic and bureaucratic performance review cycles that are extremely user-unfriendly. These often involve intensive documentation, multiple approvals and administrative processes, thus making it a dreaded bureaucratic mess that brings in very little value when compared to the effort it demands. Tomorrow’s employees are unlikely to have patience for these multiple layers of form-filling and approvals. The performance management system of the future may reside in Google Hangouts or in social network like informal interfaces. It may well use online voting mechanisms, polling features, live commenting and feedback rather than administrative processes.

• Individualistic goals and KRAs

In an increasingly collaborative organizational ecosystem, individual goals will no longer be defined in black and white. Employee goals will be interdependent rather than independent. Therefore, collective goals will become the norm rather than individualistic goals.

• Secrecy and Confidentiality

Most organizations treat the performance management process with utmost confidentiality and secrecy. The new paradigm of performance management will be of open, candid feedback and transparent communication that removes the veils of secrecy.

What Could the Performance Management System of the Future Look Like

The performance management of the future is likely to be far more “social” and “community-driven.” It may well rest in a social media interface that incorporates familiar Facebook-like features. There already exists social performance management platforms such as Rypple powered work.com, WorkSimple (getworksimple.com) and SuccessFactors(successfactors.com) which incorporate many of these features. Several organizations such as Facebook, Sunrun, LinkedIn and Spotify have abandoned traditional performance management approaches in favour of more “social” performance management models.

These “social” performance management systems could incorporate features such as the following:

• Real-time interactive micro-feedback from team members to encourage continuous improvement
• Social recognition systems incorporating badges and points systems
• Participative goal-setting and distribution of responsibility amongst employees and teams
• Ever-evolving real-time goals that will help organizations stay one step ahead of change
• Real-time visibility and visualization of performance against agreed goals and targets along with trends thus enabling course-correction
• Greater gamification to encourage productive competition and collaboration
• Community-driven performance appraisal

Social performance management systems, hence, will support a collaborative, empowered and real-time focus on performance improvement and employee development. Social goals will evolve and change in real time. Individual and team performance in alignment to these goals will be monitored and actioned upon real-time. Teams will be able to rally around these collaborative goals and foster continuous improvement, feedback and recognition. The responsibility of employee coaching will no longer rest solely on the shoulders of the supervisor – but instead will become a collaborative process where employees ask for and receive support across the organization’s network.

Moving to a “social” performance management approach is a step that is likely to be welcomed by the Gen Yers and Gen Xers who thrive in social and community-driven environments. A significant challenge in migrating to such a system may, however, lie in breaking traditional mindsets, especially of older employees who may be less familiar with social interfaces. These employees may be uncomfortable with the transparency and immediacy of such a system. A simple performance management interface that is based on a portal that they are already familiar with navigating (such as Facebook) may help ease adoption.

With the break-neck pace at which business is evolving today, organizations no longer have the time to wait for traditional performance management approaches to help them set goals and course-correct on an annual or semi-annual basis. The employee of the future will also have very different expectations from the workplace. The new paradigm of performance management will be about creating an environment that helps employees collaboratively set goals for themselves, give and receive real-time feedback and reshape approaches to ensure success. The opportunity of “social” performance management approaches lies in unlocking the power of collective action and in creating a self-regulating system where employees manage their own performance within an empowered and collaborative environment.

Niranjana Harikumar is an organizational development consultant who has consulted with several organizations in the areas of talent management, leadership development and employer brand management.