Performance Management in 2021
Over the last few years, there have been many changes in the workplace. This includes the ditching of traditional annual performance reviews. This should come as no surprise since assessing employees once a year simply does not work (for more details, you can look at our previous articles on the problems of traditional performance management here, here and here). Nowadays, employees want feedback more than once a year. They want the opportunity to learn and develop in real-time.
In this article, we will outline two major drivers of change in performance management over the last few years and some strategies to consider in 2021.
Driving Changes in Performance Management
1) New generations want an increase in feedback and responsibility
Performance reviews in most instances are dreaded by employees. Younger generations are starting to populate the workforce, and they expect an increase in the amount of feedback from their managers. In fact, 60% of Generation Z wants multiple check-ins a week or daily if possible. The traditional annual performance review is not sufficient for these self-growth-seeking employees. If your organization is still doing an annual or bi-annual review, it may be time to consider more frequent check-ins. Remember that these younger generations will make up the majority of your workforce in the next decade, with Millennials and Generation Z presently already making up over one third of the working workforce. These employees are ready to receive feedback and are willing to work hard to gain more responsibility in their jobs. One study found that 76% of Generation Z stated that they are willing (and ready) to start from the bottom - they expect and want their hard work to be recognized in order to gain more responsibility and opportunities to excel in their careers.
2) Switch to remote work
In 2020 (and for most of the foreseeable first few months of 2021), almost all organizations have had to adapt to their primarily remote workplace. These changes have caused a strain on managers and employees to adjust to a new normal and adapt to changing communication and accountability models. The good news is that for many seasoned remote workers, an increase in productivity has been noted. In fact, 77% of remote employees stated they’re more productive when working from home. While the change in remote work has required remote work policies to be created & adapted and new communication models to be created, remote work can be engaging and productive for employees. Check out our guidebook on best practices in remote work.
With these driving changes in the workplace, performance management should be tweaked accordingly. Talent leaders need to remember that performance management is not static. It is constantly evolving and forcing the workplace to change with it. Below we list some strategies managers can use to ensure success in managing performance in 2021.
Performance Management Strategies in 2021
1) Implement continuous performance management
While performance reviews are dreaded, they are an important part of most employees' year. They act as a resetting point as a new working year begins, as well as the opportunity to address any outstanding issues and/or promotion/ career development opportunities. However, performance reviews should be supplemented with continuous feedback. Employees are starting to value continuous feedback as it allows them to develop and improve weekly. In fact, more than 33% of workers still want more regular feedback meetings with their managers that are beyond the annual performance reviews.
Moreover, these frequent feedback meetings contribute to building a trusting relationship between managers and employees. A study done by Harvard Business Review showed that only about 42% of employees trust their boss. Having frequent conversations about performance and goals is the best way that managers can show employees that they care about their future and development. More importantly, managers are able to address performance problems in real-time. A coach doesn’t wait until the end of the game to address his player's mistakes. Rather, the coach lets the players know their mistakes as they are playing. Managers should do the same.
Important note: if your organization is switching to a continuous performance management model, ensure that you have the right tools to document and track performance (and goals). There are many different continuous performance management solutions in the market (like Pavestep), each with their own unique angles and twerks. If you want continuous performance management programs/solution to succeed, make sure that the solution is intuitive and doesn't burden your employees' day-to-day.
2) Allow for flexible work
Many employees want to continue with some form of remote work post-pandemic. Having a choice of work environment and location is now a key factor for many current employees and job seekers. And companies have acknowledged their employees' desire for flexible work. A Gartner survey found that 80% of company leaders plan to allow employees to work remotely at least part of the time after the pandemic, and 47% will allow employees to work from home full-time. With remote work here to stay, solid remote work policies, remote friendly performance management practices, and communication models need to be created.
For some resources on remote work, feel free to check out our other articles:
3) Revisit goals more than once-a-year
Due to the changes that can take place in the industry (for example, the immediate switch to remote work in 2020), objectives need to be easily adaptable so that employees can meet them. Goal setting is a large part of performance management and it's also very important to keep employees engaged and accountable. To guarantee that employees’ goals are attainable, goals should be revisited throughout the project/ year and be adapted as needed. (Check out our previous article on how to ensure that your employees are meeting their objectives for more details).
4) Include mentorship programs
Mentorship can have a big effect on the performance of a firm and its success. Mentorship can come in many different forms; for example, a high performer on the team may be paired with a lower performer, or a director report may be paired with their direct manager or another manager in the firm. Mentorship can encompass many activities such as coaching employees on how to meet their goals, career development, or general support and guidance throughout employees' careers. There is a demand for mentorship, particularly around personal growth and development. One study found that 74% of employees felt they were not achieving their full potential at work due to a lack of development activities. Mentorship programs are one place to help support the growth of an employees. Other ideas include team-training groups, courses, and of course one-on-one meetings.
What are your thoughts? How is your organization adapting to the changes in performance management? Let us know!