Manager & Lead Advisor for Performance Management
Bersin, Deloitte Consulting LLP
Vice President, Learning Research Leader
Bersin, Deloitte Consulting LLP
Vice President, Human Resources Research Leader
Bersin, Deloitte Consulting LLP
Top-performing organizations know that continuous development is critical to an engaging employee experience. Increasingly, these organizations are listening to employees, understanding individual growth aspirations, and curating a personalized experience for each of their individual employees. Managers are focusing on improving performance rather than simply assessing it at the end of the year. The new model of continuous performance management relies on frequent, two-way dialogue between managers and employees, real-time and ongoing positive and constructive feedback, dynamic goals, and an emphasis on developmental experiences.
Throughout this new model, employees actively solicit feedback and take advantage of development opportunities while their managers provide the support and tools necessary for self-reflection. This article in our Understanding Employee Experience series shows how this strategy results in a fluid and effective approach to performance management that enhances employee experience while advancing the organization’s objectives.
Employees in the Driver’s Seat
As the nature of work changes, performance management is changing in tandem. Managers and employees communicate more frequently— at least once per quarter, but preferably weekly or even daily. Goals are becoming dynamic, updated in line with employees’ projects and new responsibilities. Many organizations are focusing on development, not just accountability and goal accomplishment. As a result, employees should now have access to the development tools they need to advance and to determine whether they are still focused on the right goals.
The role of managers is changing as well. Rather than managing goal completion, they act like coaches, offering frequent feedback on employee performance on short-term goals and “feed-forward” on future development needs. Together, employees and managers should share accountability to help ensure that the company gets great performance and the employee gets clear feedback and opportunities to advance— both prerequisites for optimal employee experience.
Clear feedback and opportunities to advance are both prerequisites for optimal employee experience.
Another driver of employee experience is autonomy in driving career paths and setting goals. Outdoor clothing retailer Patagonia excels in its nimble approach to autonomy—managers still set annual goals aligned with those of the business, but they have also introduced stretch goals that align with the interests and aspirations of individual employees.
Networks of Teams Foster Crowd-Sourced Feedback
Organizational models evolve as the nature of work changes. Today, some companies use flatter organizational structures in which work is primarily performed in small networks of cross-functional teams. In this model, collaboration and communication are crucial—team leaders may oversee projects rather than employees, and those responsible for career development (sometimes called managers, coaches, or counselors) may be less directly involved in the actual day-to-day work.
In this new way of working, the people best qualified to provide continuous performance feedback are those who most closely interact with the employees: their coworkers and team members. Employees give and receive frequent, action-oriented feedback using formal and informal channels. While managers still weigh in, their opinion is no more important than that of any other team member.
The people best qualified to provide continuous performance feedback are those who most closely interact with the employees: their coworkers and team members.
Empowering Employees to Design Performance Management Processes
A good employee experience does not end with receiving frequent one-way feedback. Mature companies seek to evolve performance management by leveraging employees to help improve and reshape these processes.
Continuous performance management helps ensure that processes are more effective when they operate on the level of individual business units.
Deloitte was one of the early adopters of the continuous performance management process. In 2015, Deloitte revamped its performance management system by abolishing the rating system and incorporating bi-weekly feedback. The rationale was to respond to employee requests for agility, speed, and continuous learning in the performance management process.
Example: IBM Applies Design Thinking to Performance Management
IBM used design thinking to revamp its performance management system for the company’s 380,000 employees. Previously, the company had relied on a traditional approach: goals set at the beginning of the year, a mid-year conversation, and an end-of-year assessment. To make performance management more dynamic, IBM conducted formal workshops and asked for feedback from all employees through its internal social-media platform, garnering some 7,300 responses. When the design team introduced an initial prototype for the new systems, employees were again asked to provide feedback, which led to iterative design improvements. This approach meant the entire company was essentially co-creating the new system. Overall, IBM’s new performance management system has led to higher-quality feedback and better engagement levels, in large part because employees understood—and helped shape—the principles underlying the new system.
Top-performing companies use continuous performance management to help employees thrive at a personal level and contribute more effectively to business outcomes. Positive employee experiences can lead to positive customer experiences. From the perspective of employees, continuous performance management empowers them to own and shape their own experiences throughout their time with the organization.
- Ongoing upskilling and development, as well as the ability to continuously improve performance, are key drivers of an improved employee experience.
- Top-performing businesses provide the requisite support and structure for employees to advance.
- Continuous performance management entails more frequent dialogue between employees and managers, as well as joint accountability for employee success.
- A shift from hierarchical structures to networks of teams requires a corresponding change in performance management, one in which employees provide feedback on each other’s performance.
- Employees should take an active role in reshaping performance management processes, which can lead to greater understanding and a better employee experience.