Big Brands Shaping 2023 Performance Management Trends
Performance management isn’t something you’re supposed to set and forget. It’s supposed to be an ever-evolving process as you figure out what works for your organization, and what doesn’t.
But, figuring out what needs to change can be hard, especially when you settle into a routine and your employees know what to expect. It can help to see how other companies are tackling modern performance management if you’re ready for a change to your system.
Many of the companies we have featured on our blog have changed things over the years. The biggest companies seem to be leading the way in performance management trends.
Here are the top performance management trends of 2023. Many of these trends show up at big-name companies that pay attention to their performance management process.
Custom Performance Management Processes
Google has always been progressive when it comes to its performance management system. Their previous system featured things like 360-degree feedback, check-ins, and annual surveys. They have always focused on supporting employees to reach their fullest potential, but they have taken that support to a whole new level.
Google has more recently developed a program they call Googler Reviews and Development (GRAD). This program focuses on creating a customized process for employees to help them do the best work of their careers. Google built the system instead of relying on an out-of-the-box system designed with another organization in mind.
The GRAD system includes:
- The continuation of frequent check-ins and feedback, but with a slight change. At least one of the check-ins will focus on learning and career development.
- Their existing merit-based incentive program has new opportunities. These include bi-annual promotions with a focus on internal mobility.
- A new rating scale that reflects the fact that most employees at Google are high performers and need to know more than whether they’re on track or not.
You can follow this performance management trend at your own company by thinking outside the box. Don’t be afraid to tweak your system, even if your idea has never happened before. In 2023 and beyond, it’s all about customizing your performance management process for you and your employees.
Many companies have been incorporating 360-degree reviews into their performance management process. It has been part of Netflix's process too, but over the years, the process has become more transparent.
At first, they conducted anonymous 360-degree reviews. Now, the company focuses on face-to-face feedback.
This highlights one performance management trend. Companies are offering more transparency throughout the feedback process.
At first, they conducted anonymous 360-degree reviews. Now, feedback happens face-to-face.
That means transparency from employees, but it also means transparency from those at the top. A performance management system that prioritizes transparency invites more meaningful conversations. These conversations focus on performance, growth, and expectations. They also build trust. Employees in high-trust environments are 75% more engaged than their peers who work in low-trust workplaces.
When integrating more transparency in your process, take a page from Netflix’s playbook and do it slowly. The concept of full transparency can be scary for employees who aren’t used to it. Steady increases in transparency get everyone on board without overwhelming them.
Engagement First, Ratings and Measurements Second
The Deloitte method of asking four simple questions on their review form was revolutionary. They were revolutionary because managers already knew the answers to the questions. It was a way to spend less time gathering more information. They can measure this information over time and use it for promotion and compensation decisions.
That said, these structured reviews aren't the only way they do performance management at Deloitte. They give team leaders the ability to manage their teams, and in 2023, engagement is becoming more and more important.
Companies and workers are working together to face challenges and define a boundaryless world. To do that, they need constant employee engagement. Conversations are now about qualitative topics instead of quantitative ones. This ensures teams take a big-picture view of goals, professional development, and performance.
That doesn’t mean ratings and measurements aren’t important. They are, but the focus is on making sure employees engage with the performance management process.
How that materializes at your organization will depend on your unique needs. Customizing a process that works for you is a performance management trend too. That means finding unique ways to invite feedback and encourage dialog among employees and managers.
More Relaxed, More Flexible Process
Annual performance reviews have been the gold standard for decades, but the process is extremely rigid. It can take a long time, it's usually uncomfortably formal, and the process is almost always one-sided.
Microsoft wanted to break away from the rigid, structured nature of annual reviews. They wanted to focus on the future rather than the past performance of employees.
The modern Microsoft performance management process utilizes a journal for each employee. This journal includes the performance review and goals. With the journal, both employees and managers can create and share their versions.
What makes this process so unique is the fact that they don’t have to fill out all the components of their journal ahead of a performance review. Managers and employees can meet, even if they haven't set up new goals, or scheduled a formal performance review.
If you like the idea of flexible reviews, relax your requirements ahead of check-ins and reviews. Give employees and managers the tools they need to conduct successful meetings. You should also give them the freedom to decide what they need ahead of those meetings.
Focused on the Future
There isn’t a lot we know about Apple’s performance management process. We know they use 360 reviews and cascading goals, and now we know it also includes a focus on the future.
With help from three or four different executives, employees can dig into their strengths and weaknesses. The goal is to understand and improve the areas where they excel and where they are falling short to discover how they can be more productive.
There is also a focus on results—not effort. During the review process, management and employees talk about what they’ve done. They also talk about what they can do in the future.
Create a review process that doesn’t get hung up on past performance. Instead, use past performance to support the future performance of employees.
Looking for more performance management trends from top companies? Check out some of PerformYard's articles that include:
- GE performance management features an app called PD@GE. It supports more frequent, meaningful conversations between managers and employees.
- Facebook utilizes real-time feedback. It helps employees and managers understand performance ahead of an appraisal. This minimizes uncertainty and ambiguity.
- Asana invests in employee growth. They treat managers like coaches and empower employees to make their own professional decisions in the future.
- Things change fast at Tesla. The Tesla360 summary survey gave way to more traditional annual reviews in the name of a more streamlined, lean approach.
- Uber has one system of reviews for its drivers and a separate system for regular employees. The system for full-time employees involves positive reinforcement and constructive advice.