Why is Modern Performance Management Digital First

Organizations that employ modern performance management approaches often rely on modern online software. Why is that? 

In this article, we’ll explore the reasons dedicated software is important to the success of your performance management strategy.

What Makes Modern Performance Management Different?

Modern performance management has evolved in three ways: 

  • An increase in frequency of feedback
  • More flexibility/adaptability throughout the year
  • An increased focus on fairness and removing bias

These changes have been positive, but they’ve also created new challenges for HR. How do you administer up to 20 times more points of feedback? How do you push updates to your process in real-time and keep everyone on the same page? How do you aggregate and analyze performance data to root out bias?

The Challenge of Increasing Feedback

One of the biggest shifts in modern performance management has been the increase in feedback. Whether it’s quarterly check-ins, project-based reviews, formal 1-on-1s, or continuous feedback, most modern strategies involve an increase in the points of feedback an employee receives. According to MIT Sloan, 68% of 1,800 global leaders agreed that ongoing feedback conversations have a positive impact on individual performance.

GE’s struggle to save feedback

GE recently made the switch to annual “summary conversations.” However for these conversations to be effective, managers and employees needed to be having feedback conversations throughout the year and saving them to review at the end of the year.

Encouraging the feedback was one challenge, but GE realized they had a whole other challenge as well. With feedback happening in so many different ways around the organization, the data was never making it to one centralized place. That’s why they turned to software. Their new feedback app allows managers to store moments of feedback wherever they happen.

Thank you notes, customer emails, thoughts about a presentation — all of it ended up in one place. This created a rich dataset for managers to pull from at the end of the year.

Why software is key to handling more frequent feedback

While having a more frequent feedback cycle may sound like a great fit for your organization, creating a more complex system without help can be daunting.

A software system can streamline away all the challenges of administering more feedback. Everything from distributing the right forms to the right people, to managing due dates and reminders, to collecting and storing performance data in useful ways can be done through software now.

Importantly, software also makes things easier for managers and employees. If the process of giving/receiving feedback is easier, you’re much more likely to get buy-in to your new performance management approach.

The Need for Greater Flexibility

One of the greatest failings of traditional performance reviews is that they were forgotten and neglected at many organizations. The questions asked often became stale or even irrelevant.

Modern performance management strategies aim to drive real outcomes for the organization, and to do that they need to keep up with the pace of change. As an organization or its goals shift the performance management strategy must adapt to stay relevant and valuable.

We’re working from home now

In 2020 when the global pandemic forced many organizations to transition to remote work, it upended performance management strategies.

There was a shift in which skills or competencies are more important. Many of the moments of feedback that organizations had just counted on happening because everyone was rubbing shoulders now needed to be formalized and scheduled.

How many organizations continued to ask employees questions that were irrelevant in a WFH world?

Why choose flexible software

Your performance management strategy has to keep up with the changes happening at the rest of your organization. 

What you’re asking of your managers and employees should always feels relevant and valuable to them, both today and in five years. A flexible digital platform allows HR to regularly update the process and seamlessly push those updates out to the entire organization. 

While the process can change, a digital platform stays the same. Employees don’t need to learn a new set of steps each time there is an update. The platform will alert them as always to the next thing they need to know.

These automatic updates make it much easier to experiment with things like different review cycles, goal-setting cadences, or feedback strategies.

Standardizing to Create Fairness

Because of the influx of data in the workplace, modern performance management has also become more fair and transparent. Employees already know that better work is rewarded, but using data to provide transparency behind reward and recognition decisions has led to more employee satisfaction and buy-in.

In looking at the future of performance management, MIT Sloan says that the reliance on subjective manager opinion is being replaced by a reliance on data. The credibility of modern performance management systems relies heavily on transparency with this data. And the easiest way to collect and categorize all this data that’s coming in much more frequently? A digital system.

General Motors’ struggle with “unfair” recognition

General Motors noticed their employees had become frustrated with what they perceived as unfair employee recognition programs. There were dozens of different programs throughout the company with recognition being given sometimes publicly and sometimes behind closed doors. 

GM revamped their system to create a uniform set of guidelines and a “social media” for feedback to be shared with anyone at any time. The key to the program’s success, according to MIT Sloan, was its transparency and consistent philosophy.

Software loves standardization and data

A fair performance management system will help alleviate employee frustration and encourage buy-in to your program from all levels. The key to achieving this is an open and transparent system with data that can be reviewed.

When the process is opaque or conducted at the whim of individuals it breeds distrust. Openness and visibility also encourages good behavior from everyone involved.

The key to accomplishing this is a single platform that is pushed across the organization with controls to ensure both compliance with the system and reviews of the data generated.

Digital-First Performance Management

Software enables performance management strategies that are more complex, adaptable and open. This kind of flexible system is key  to succeeding with modern performance management approaches, and it’s why we see most leading organizations adopting a digital platform to manage their process.

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