If we asked more organizations what they would associate the label “performance management” with, we would certainly get very different answers. Indeed, traditional systems are often traced back to year-end review , while continuous performance management or agile performance management is a general approach that organizations use to achieve their goals while maintaining a strong element of flexibility.
Next-generation performance management systems differ from those of the past in terms of their purpose, the paradigms underlying “work by objectives,” and the practices by which they take shape in the day-to-day.
The purpose is clearly to create a strong connection between business goals and priorities, clarify expectations and expected outcomes, and support people and teams to grow and perform at their best through frequent check-ins and feedback.
But what are the new paradigms of performance?
We have identified 4: Agility, Development, Business mind and Accountability.
Agility.
Innovation, speed, flexibility and sudden changes in priorities. The process reflects the pace of companies in the present: fast-paced, constantly changing and driven by the value to be brought to the customer, as well as geared toward constant redefinition of goals and priorities throughout the year. Constraints and bureaucratic aspects are minimized and simplified because the value is in the “conversations” and not in the formal aspects: time is invested usefully because greater effectiveness and efficiency are generated from it. Finally, the tools become increasingly user-friendly, help people learn and manage their performance better, and are often built in a way that makes the user experience not only enjoyable but also compelling.
Development.
The emphasis is on the future rather than the past, the focus is on goal setting, expectation clarification, and performance development related to the challenges of the coming months. The manager wears the coach’s garb to facilitate performance on short-to-medium-term activities, supports people in defining their Key Results, and uses frequent and immediate feedback to correct, channel efforts, and stimulate skill growth as well. The underlying idea, moreover, is that everyone can be brought to a higher level of performance. The performance management system is not just for managers, the organization’s talent or a select few, but creates value for each person within it.
Business mind.
Ownership of the performance process is clearly in the hands of line functions (not HR). The system loses in “formality” but gains in usefulness because it becomes owned by the business and helps the business perform. The model is tailored and not “one-size-fits-all,” because it is modeled in a sartorial style with and for the people themselves, who are thus able to synchronize it with the natural cycle of work. The management of the system becomes integrated in the day by day, and not in an extemporaneous moment at the end of the year or end of the semester, entering into continuous management, in which the Team plans, coordinates and compares qualitative and quantitative results. As it becomes an integral part of the business, the process is perceived as part of the job, not “something extra to do for HR” whose usefulness is continually questioned.
Accountability.
We talk about widespread responsibility. The balance between roles changes and more symmetry is established in the Manager-Collaborator relationship. There is a shift from unidirectionality to balance, from the passivity of the individual to the development of mutual responsibility for performance. The most obvious transformation concerns precisely this relationship: the manager is required to exercise trust, to give fewer directives and to be a coach, acting in a logic of service and coaching from the sidelines. On the other hand, people are required to take more of a leading role, sense of responsibility and capacity for self-development, growth and motivation, even according to their own desires. We ask actors to run at the same speed and contribute to results in the same way, that is, to be accountable to 360 degrees on performance. In this context, a third actor comes into play: the Team. In fact, the new systems are much more oriented to the Team dimension (of function or project), which, in this context, “gets ahead” and becomes a key element of performance, having in it a role as a primary actor.
What about dimensions? What are the performance factors being “talked about”?
Another paradigm is the what, or dimensions. They have not changed, although the way we interpret them has changed. Goals, skills and motivation remain the concepts from which to start.
From annual MBOs(Management by Objectives) reserved for a few, OKRs(Objective and Key Results) are gaining ground as a method of declining not only the “goals” but also the strategy to achieve them. The culture of management and operational KPIs and project performance is growing. Today, goal management meets people’s great need to better organize their work, which is why task management tools are becoming increasingly successful: in addition to being the “home” of goals, they facilitate project management activities and cross-functional vision.
The Team is the cornerstone for performance and competency development, the responsibility for which is no longer confined only to the role of the manager. In fact, 360° and qualitative peer-to-peer feedback is growing. The manager-always in the role of coach-is in charge of goal setting related to competency development, enhancing the strengths approach.
Motivation is a dimension that has become increasingly important, especially in the post-pandemic era. Therefore, it becomes critical to bring this topic to the conversation table. The focus shifts from role satisfaction to an engagement dimension, that is, how much people feel ownership of their goals and fully engaged at work. Moreover, rather than career ambition-understood as a “traditional” and linear career-it is essential to understand what people are motivated by (what their levers are), also embracing the idea of circular careers(squiggly careers). Finally, there is growing interest in people’s energy level, or mood, which can be “measured” through pulse surveys or dynamic flow surveys (an expression of the perceived relationship between challenges and resources).
