The 'great resignation', the change to a hybrid work environment, the threat of burnout, and the constant fluctuation of external scenarios call for much more sensitive and well thought through practices for organisations. This holds valid for performance management too.

Industry experts say the paradigm shift caused by the pandemic has put even more thrust on the need to rethink the purpose and value of performance management programmes.

Performance management has traditionally been a rigid system, seeing employees meet their managers once or twice a year. This approach, however, no longer works in today’s fast-paced work environment - as the coronavirus pandemic has proved. In fact, the crisis has accelerated the need for an approach that is flexible, agile, continuous, and development oriented.

“With the new working models, it has become challenging to ensure that everyone is aligned with the company's overarching culture and philosophy. Thus, there is a need to re-engineer the performance management system around the core values of the organisation. This will not only help drive high performance in complex and dynamic working models but also enhance the overall employee engagement,” says Shruti Tandon, Director – People Enablement, Nagarro, a global leader in digital engineering.

Over the years, performance management had evolved into a structured, mostly limited to mid/annual exercise, linked to pre-set goals and objectives. However, Covid compelled businesses to alter long term business strategy, revise goals and adopt innovative and creative measures to survive, thrive and grow, by overcoming challenges in an unpredictable situation.  

“In a post-pandemic world, largely dominated by accelerated digitisation and hybrid work culture, it is important to revitalise performance management to include dynamic smart goals, real-time performance feedback, qualitative dialogue, more frequent conversations on performance, with an emphasis on key competencies and behaviors such as imagination, empathy and pace,” says Suma P.N., Director HR, Otis India, the world’s leading manufacturer and maintainer of elevators, escalators and moving walkways.

“While every employee is responsible for his/her own growth and development, new age managers and leaders must work together to create an enabling, safe work environment, built on mutual trust and respect, enriched with progressive opportunities, allowing teams to excel and individuals to perform and contribute to their fullest potential,” she adds. 

Ritu Moitra, Chief Human Resource Officer at sleep and comfort solutions provider Duroflex, says the inter-linkages within the organisation are more strongly pronounced now, be it between individual and teams or functions. “One has to see performance management as an enabler to overall organisational strategy and not as a reward programme. Performance management needs to become the go ritual; quarterly has already become like long-term planning,” she adds.

Tandon says going forward, individual-level empowerment and balance will be more important than ever before.

“Collaboration, constant communication, culture of learning, and mentoring will become the future mandate of high-performing workplaces. These concepts existed pre-pandemic, but they have now become essential to keep pace with the dynamic and virtual environment,” she adds.

Remote working means many managers feel they don’t have good visibility into employees’ performance as cues from working in physical proximity do not exist in the distributed set up. Likewise, employees may feel more anxious about being evaluated.

“Therefore, there is a need to rethink performance management, which will now be a real-time, integrated, and continuous process. Its focus would be on committing to a culture of continuous feedback, with emphasis on core value-based conversations for retrospection, goal, and expectation setting for performance improvement,” Tandon adds.

Another important spotlight put forth by the pandemic is employee health and well-being. Tandon says employee engagement, well-being, and performance are intertwined, and performance management systems, now and post-COVID, will need to integrate strategies for monitoring and measuring workplace well-being.

Trends that will shape the future of performance management  

Digitisation and data-driven design are the top trends that will shape the future of performance management in the post-pandemic world.

With the rise of hybrid work and employees operating from a variety of devices and environments, digitally enabled personalised employee experience will play a major role in the coming time. “The challenge is to make employees feel connected and valued by elevating digital employee experience at all the touchpoints of a performance management initiative,” says Tandon.

Secondly, she adds, the shift towards a data-driven approach with more frequent feedback, check-ins, and other metrics will also remain key. Real-time feedback and committing to a culture of feedback for continuous self-development is another major influential trend.

“At Nagarro, we have recently launched a tool called 'Anytime feedback'. Colleagues can leverage this tool to share real-time feedback, non-anonymously to anyone in the organisation.The feedback is in congruence with our core values and can be a praise or a suggestion to help fellow Nagarrians to grow. Appropriately timed and worded, feedback is a powerful tool, particularly in improving performance and we truly believe that the power of real-time feedback is immense as it can help in driving high-performance culture. As we move forward, annual performance review will lose its significance and continuous feedback will become the focus of performance management efforts,” says Tandon.

Suma of Otis India says understanding of dynamic smart goals, real-time performance feedback and development conversations are key for success.  She adds that in a VUCA world, the following trends will shape the future of performance management: 

• Evolving hybrid work models, fluid teams, and collaborative working styles taking center-stage.
• Inclusive and diverse work culture, supporting every individual’s need to feel a strong sense of purpose and belonging while choosing an organizational role or responsibility.
• Technology driven, fast track work processes and systems, to keep abreast of the dynamic and volatile business environments, triggered due to massive digitization efforts across sectors/industries.