The measurement of employee performance and productivity is extremely important to most business owners. This valuable metric allows a business to make informed decisions regarding their staff and their value to the company. Companies who lack a formal evaluation process could be missing the mark, losing revenue and failing to properly motivate their teams.
However, the upcoming millennial generation is beginning to populate the workforce. They are bringing a new set of expectations and attitudes that may shift the patterns of the traditional employee performance review. Studies show that the millennial worker seeks more autonomy and personal development and requires more regular feedback and input from management. Based on these observations, the following trends are most likely to occur in the employee performance management process…
Over the past decade, the performance review has been known to be an extremely formal process taking place once or twice a year. Managers had a set process and were required to use this evaluation as a metric for determining a salary raise, promotion or areas of improvement. Traditionally, the review process was also a one-size-fits all evaluation and wasn't exactly tailored to the role or the person.
This process has proven to be ineffective when it comes to measuring employee value and connecting them to main objectives. Today's business world offers a new dynamic where priorities change rapidly and employees are expected to ebb and flow with these shifts. Role definitions change regularly, and the expectation of work changes with it. This means that an employee's original job description might change several times prior to the performance review. The most effective way of evaluating performance during these frequent shifts is to document and measure in real-time as close to the result as possible. This means HR professionals and managers will need to be prepared to conduct evaluations on a more regular basis moving forward.
Crowd Sourcing Data Techniques
Good data is critical to the performance review of the future. Past processes required employees to report on their own work, growth and numbers—leading to inexact snapshots of their performance and a mistrust of the entire process. These reviews were very subjective and did not take into consideration feedback or performance at team meetings, brainstorming sessions or customer service interactions.
Moving forward, companies should be prepared to use technology to capture more relevant feedback. For example, many companies are trending toward the use of crowd sourcing technology. These modern applications allow companies to capture peer, manager and customer feedback in real time to offer a more well-rounded picture of the employee. This concept measures more than just numbers and allows the company to more accurately identify the best performers.
The traditional employee performance management system has been connected to pay increases. In theory, this is a logical process. If you perform well, you are compensated for your work. Contrarily, if you don't meet expectations, you should not expect to receive a reward. Salary increases have historically been determined based on this one-time appraisal and have been the focus for most employees.
However, research suggests that the anxiety surrounding this concept can actually hinder progress and block creativity and innovation. Employees become so consumed with the idea of getting a pay bump that they don't take as many calculated risks and focus only on the required metrics. In addition, research has suggested that compensation isn't even a primary motivator. Employees are more motivated by opportunities for recognition, meaningful and challenging work, and opportunities for growth. Therefore, tying compensation to performance isn't necessarily the best tactic.
In the future, employees can expect that companies will begin to focus more on rewarding a team effort. When the company does well, all employees will reap the rewards and any achievements will be viewed as a team effort. Individual financial boosts will still be attainable, but will no longer be the norm.
Trend Toward Development
Performance reviews have typically been a tool for holding employees accountable for meeting certain requirements. Employees were generally rated on a scale based on their metrics. While accountability is still an important piece of the puzzle, many organizational psychologists have pointed out that this process fosters internal competition and reduces the amount of collaboration and teamwork happening in the work environment. Similar to pervasive thoughts about compensation, worrying more about the metrics and less about development and character can be detrimental.
The future of employee performance reviews will begin to see more emphasis on how work is achieved rather than what is achieved. Principles like self-direction, resourcefulness, ability to respond to change, teamwork and reflection will be more highly valued in the performance review. It is believed that emphasis on these qualities will help employees be more aware of their own performance and work methods. It is also believed that employees will be better equipped to respond in real time to the changing demands of the customer and the market. This fosters an environment of continual improvement and focuses on the future rather than the past.
Focus on Employee Coaching
Employers are beginning to recognize the value in having coaches on staff. Executive coaches have the ability to motivate employees and help them reach their personal and professional goals. They can offer conversations on goal setting, responsibility, autonomy and work-life balance. They can also help the company's leadership focus more on what is needed in the future rather than delving out reprimands for past mistakes or shortfalls.
This solution-oriented shift can have a huge impact on a company's performance and employee morale. One of the biggest roadblocks to performance is a lack of resources or the ability to get the training needed to perform at a high level. Adding coaches to the team will help employees feel valued and able to do their work (read more about performance management and coaching at OPM.gov).
As you can see, the performance review process is extremely critical in moving an organization forward. The process is rapidly changing, and employers are beginning to recognize the value in looking forward rather than backward. You'll see more technological applications and a focus on training and development in the future.
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