The Digital Shift in Performance Management: What You Need to Know

Performance management, like most areas of business culture, is changing and evolving with the assistance of technology. The performance management model that is currently in place is no longer effective for organizations. While legacy systems might still be useful for things like compensation, termination, and other functional decisions in the workplace, these systems are almost obsolete in terms of actually improving employee performance or the day-to-day management of people.

Legacy systems might have their place in some functions, but they do not add measurable value to performance improvement. These outdated systems and the old “annual review” approach target employees and make people feel alienated. Even most managers don’t like sitting down for a review to tell someone how they’re doing or where they need to improve. And yet, despite the influx of technology in enterprise operations and personal daily life, it has yet to create a full shift in the performance management culture of the workplace.

Employees’ persistent complaints about performance management are still ongoing. These include rigid rules, a lack of flexibility, arbitrariness, and the inherent backward view that many organizations hold. These are what are tearing down the performance management structure within every organization, but they are all things that can be addressed and fixed.

Digital Business Means It’s Time for Change

Industries of all kinds are starting to recognize that in order to compete in today’s digital environment, they need to take a new approach to business operations. Companies are also starting to realize that this approach has to include a new method for handling performance management and creating a strong performance culture rather than simply checking metrics and marking off boxes when reviewing employee performance.

While data-driven approaches are going to be the future of most organizations when it comes to performance management, no one is going to be actively reciting numbers and expecting people to meet certain metrics or fail. The future of performance management is in flexible, continuous improvement methods and approaches that are focused on development and actually cultivating employees’ skills, as opposed to just criticizing people and telling them where to make improvements.

Feedback Makes a Difference

Feedback is offered in various ways in a performance management process. However, people also respond to feedback in different ways. Today, the effectiveness of that communication depends entirely on how it is presented and by whom, as well as how the employee who receives it acts on it.

Many organizations are looking to create a technology-focused continuous improvement approach to performance management. This can (and should) include performance-based assessments and automated coaching tools, along with self-service features and DIY solutions so that employees can help themselves in addition to being helped by the management within the organization.

Technology is changing the way that performance management culture is handled, but communication is still the key to creating an effective system within your organization.

It Takes a Village

Traditionally, companies focused performance reviews on a single employee. The idea was to keep track of each employee’s personal progress and professional development in order to ensure that they are contributing to the best of their abilities as a part of the greater team and organization. Today, however, the focus is shifting. Modern PM tools and methods focus more on the actual job skills utilized and the teams performing the work since there is very rarely a situation where an employee is truly autonomous in the workplace.

Companies like IBM are making the transition to cataloging employee skills rather than job roles and working to create more effective teams by identifying areas where people perform well and then combining them with others who have similar skills. This is a much more group-focused approach, and when you are trying to grow a business, that approach can make all the difference.

Incorporating Technology

Digital performance management tools are all about measuring people’s aptitude and ability on the job. It should also provide a resource, however, to help them get more out of the skills that they have and to develop new skills that relate to their job role or their place within the organization. Legacy systems lack interactive and engaging features, which is why they are no longer effective. New technology for performance management eliminates the traditional assessment checklist that puts employees in boxes and basically grades them on their abilities. Instead, it focuses on finding areas where people need assistance and helping them make improvements.

Organizations have realized that simply ordering people to be better at this or improve is not effective. Measuring the performance and success of employees based on a static list of criteria is not going to tell you how well they are really doing in the company. You need to utilize modern digital performance management tools to measure the success of each team member, team, and group within your organization to ensure that performance is on par.

Create a Performance Culture

One of the ways that companies are changing their approach to performance management is by simply incorporating a performance culture. By turning performance into part of the overall company culture and making it more of a focus than just a metric, it will become much more apparent to your employees that this matters. It will also help them feel less targeted and more engaged and give them the sense that you’re attempting to help them improve, not just trying to find their flaws.

You can’t measure people like you can measure functions. It just isn’t effective, and as more companies realize that, the shift in digital performance management is going to continue to revolutionize the way that people handle performance reviews and other aspects of managing employees in the workplace. You don’t necessarily have to have all the answers, so long as you know that the current methods are no longer effective and that the time for change has come. Then, you’ll be able to start putting digital PM solutions to work for your organization.