Time to gear up for a fresh year, 2016 is almost over! As we step into 2017, it would be wise to reflect and analyse the outcome of all the initiatives that we took. Some of them may have succeeded while others outright failed. No matter what the outcome, there is always an element of learning..
How is 2017 going to be any different?
According to a recent report by PwC, it is estimated that millennials will continue to dominate the workplace and by 2020 almost 50% of the workplace will consist of millennials. Around 24% have already taken over leadership roles as well. These individuals have adapted to technological advancements much faster than their previous generations.
These past 2-3 years have seen a lot of changes take place in the work environment. 65% of the millennials felt that rigid hierarchies are responsible for their failure to contribute. This has given rise to concepts like Holocracy (some large organisations are opting for flat hierarchies.) Strict timings have been replaced by flexible working hours as well as work-from-home options. While previous generations valued payscale and stability, millennials are looking for higher job satisfaction. They do not mind hopping from one job to another if their desires are not met.
Impact on Performance Management Processes
In the coming year, companies will have to rethink some of the old techniques of performance management that have been in use. Millennials are not compatible with traditional modes of performance management. For them, paper based annual reviews are akin to dinosaurs and need to be made extinct!
Companies that use traditional performance management are already facing problems due to its inefficiency. This technique encouraged goal setting across the entire organisation at the start of every year. Employee performance was measured annually by their level of achievement of these goals. Instead of focusing on enhancing employee performance, it was primarily used to determine compensation. By 2017, these practices will not be able to retain top talent of the organisation.
Thus, many a team are already turning towards Agile Performance Management which provides a more collaborative and development oriented environment.
Agile management incorporates the best practices from traditional management and adds some of its. Thus it’s able to provide a more dynamic and efficient framework. It is able to strike a chord with millennials due to the similarity in opinion about how companies should operate. Both are based on the belief that in this fast paced environment, technology needs to play a crucial role. What was once globally accepted procedure, need not be the most efficient one today.
For example, objectives and goal setting cannot be a rigid one-time activity for the organisation. There should be scope for keeping goals flexible so that they can modified in case of changes in the circumstances. For example Google or LinkedIn’s goal setting framework i.e Objectives and Key Results, popularly known as OKRs. They acknowledge that different levels of the department have different goals but to succeed as a whole, they need to be tied together.
Another important factor is flow of information. There needs to be a continuous flow of real-time information throughout the organisation. 360 degree feedback is one of the most popular agile techniques that can foster a culture of continuous improvement. It helps managers to significantly reduce the gap between goal setting and performance evaluations. Individuals are able to request as well as give feedback to (and from) all the key stakeholders of the organisation.
Necessity of tools to better manage performance:
As old philosophies are replaced by newer and popular management styles, so should the tools and procedures. You cannot expect to build skyscrapers with technology that is decades old. You need to use advanced machinery if you hope to compete with other construction companies. Similarly, if you are adapting to a new management philosophy, you need to use tools that are more compatible with it.
Cutting edge performance management tools are now available that support agile philosophy. Such tools make the entire process transparent so that employees are able to see how their efforts are aligned with company goals. The management too is able to maximise efficiency and minimise efforts.
How does your company intend to tackle performance management issues in 2017?
