PM: A Year in Review

PM in hybrid work is no longer a copy and paste of what it was pre-pandemic.¹ To get a grasp on what organizations are doing (or not doing) for PM, we looked at more than 60 academic and business articles and reports around PM for this literature review. This article summarizes:

• 4 major themes
• Hidden gems we found among the lit reviewed
• 5 critical articles that caught our attention
• 5 additional articles to check out if you have time

Major Themes

The pandemic has changed how people work. However, PM practices haven’t kept pace. The specific themes that emerged from the literature are as follows:

• Hybrid PM requires orgs to rethink culture and bias
• Managers need to tackle PM with empathy
• PM tech can play a crucial role in helping teams perform
• Orgs are approaching PM with an assortment of strategies

The following sections take a closer look at these 4 themes.

Hybrid PM requires orgs to rethink culture & bias

Leaders are worried about a lot of things in hybrid work—and culture is one of them.² We found many articles explaining how matching an org’s in-office culture to a hybrid work environment doesn’t work: This includes PM discussions. Orgs that are aware of this have implemented frequent performance feedback discussions³ since the start of the pandemic. They’ve also matched feedback conversations to the comfort and needs of the employees.⁴

Historically, PM has favored people in the office more than remote workers due to proximity bias.⁵While this bias may have been reduced when most people worked remotely, as employers bring people back to the office, the potential for this bias to resurface increases. If, as some expect,⁶ majority populations return to the office for more days per week than women or underrepresented minorities, it’s likely those majority populations will reap the benefits of proximity bias. Orgs need to proactively design for and address this situation.

In addition, during the pandemic, a concept known as “the intensive margin” has become more popular: It describes caregivers who are holding the same roles—but working fewer hours, declining assignments, or deciding against a promotion or new job due to childcare demands. Several articles highlight the gap in how rewards and opportunities for groups who’ve been experiencing the intensive margin is likely to have longer-lasting effects than the pandemic itself.⁷ This is again something orgs have to address as they look to retain the upward mobility of women and underrepresented populations (who are more likely to experience “the intensive margin”).

Managers need to tackle PM with empathy

As we rub our eyes and try to emerge from the pandemic, one thing is certain: We’re burned out. As Adam Grant described it,

People are languishing.⁸

Managers are shapeshifting into empathetic supporters and burnout alert buttons for their teams, while feeling everything but prepared for that new role.⁹ The resurgence of empathy as a management competency is due to the blurring lines between personal and work lives. The hardships brought on by the pandemic and social injustices have forced more personal conversations: Managers have had to be examples of vulnerability, while also creating psychologically safe environments.¹⁰

PM tech can play a crucial role in helping hybrid teams perform

Withstanding the turbulence since March 2020 has meant teams needed to reform in different locations, persisting through hardships, normalizing ambiguity, and striving to perform. To enable teams in these more digital environments, orgs have:

• Positioned PM tech to support the definition and measurement of employee performance¹¹
• Leveraged PM tech to give power to employees to create their own goals¹²

With a ton of PM tech out there, orgs should be mindful of issues such as whether the tech is removing bias, and providing further clarity and power to workers. Employee tracking doesn’t necessarily equal more productivity.¹³ The asynchronous nature of hybrid work highlights the “how” work gets done as being less important than the “what” gets accomplished.

Orgs are approaching PM with an assortment of strategies

It’s a mixed bag when it comes to what orgs have been doing with PM during the pandemic as reflected in Figure 1 below:¹⁴

Many orgs:

• Redefined high-performance competencies¹⁵
• Focused more on behaviors than outcomes
• Adopted new or enhanced PM platforms during the pandemic¹⁶

Some orgs kept the ratings for the very highest and very lowest performers, but focused less on the ratings for those in the middle of the pack. Those with high ratings have been recognized for motivation and retention purposes. Managers have had development conversations with lower performers whose lagging was seen as less to do with an employee’s abilities ¹⁷ and more with the circumstances surrounding them.

In terms of employee-directed goals, it’s been common to see employees creating their own PM processes,¹⁸ while multi-rater assessments have become the popular new kids on the block¹⁹ — especially for companies with self-managed work teams for which there’s no formal boss.

Hidden Gems

Among the lit we reviewed, we found the following 3 hidden gems to share with you:

1. Recognition and rewards matter in hybrid work.

An employee’s desire to be recognized and rewarded increases in times of disruption, such as the pandemic. We came across evidence that extrinsic motivators are more important in hybrid work,²⁰ and can positively impact morale and retention.

2. PM tracking needs to meet the ethical needs of hybrid work.

Performance tracking platforms have increased in popularity since the start of hybrid work. We came across a few intriguing pieces that highlight the importance of ethics and the risks of these integrated platforms.

When it comes to performance tracking, orgs must be careful not to erode employee trust, morale, or wellbeing. Strategies for this include enforcement of rules and regulations for which employees can remain in the driver’s seat and authorize use of their data.²¹ Tech that monitors employee performance can easily move into manipulation and “Big Brother” oversight, and should be closely monitored.

3. Where’s HR in all of this?

HR teams are becoming increasingly removed from monitoring performance and team dynamics—something HR had already been struggling with, but was exacerbated by the pandemic. Through the democratization of PM processes like peer feedback and employee-created goals, HR is taking a seat at the strategy table for PM (instead of the administration table) where they are serving as consultants who tie PM value to business needs.²²

In hybrid work, managers are the PM pilots of their teams and HR is air traffic control—ready to support when needed, maintaining accountability to cultural values, and clearing the runway of obstacles.

What Caught Our Attention

Of the literature we reviewed, 5 critical articles stood out to us. We learned from their perspectives and hope you can as well.

What Does It Mean to Be a Manager Today?

Brian Kropp, Alexia Cambon & Sara Clark

This article describes a new era of management in which effective managers of the future will be those who focus and build relationships around how employees feel (via empathy) and manage visibility on what they’re doing.

"When interactions become primarily virtual, managers can no longer rely on what they see to manage performance, and when relationships become more emotional, they can no longer limit the relationship to the sphere of work."

Highlights:

• Reports higher levels of performance and inclusion as an outcome of empathy-based management
• Emphasizes the development of internal manager support groups to provide a safe space in which to practice empathy
• Affirms that reorganization of teams increases a manager's capacity and time to have intentional conversations with employees
• States that capabilities of managers are evolving to require more complex (emotion-based) competencies for which trust and fairness are integral

Rethinking Performance Management for Post-Pandemic Success

Michael Schrage

With hybrid work, this article argues that performance data and analytics are the nonnegotiable nutrients that give strength to the relationship happening between an employee and the org, while providing visible insights into the org’s limitations and strengths.

"High-performance management depends on high-performance measurement. The digital future of one depends on the digital future of the other."

Highlights:

• Describes how COVID-induced remote work really exposes orgs and leaders to what little insights they have on their employees
• Argues that real-time performance and people analytics are indicators which can assist in PM decisions that are accurate, transparent, and fair
• Offers strategies to position PM dashboards as insight providers that are prescriptive and descriptive
• Acknowledges that digital accountability platforms must reflect the coexistence of blurred work and home lives to ensure validity and remove bias in measurements

Talent management challenges during COVID-19 and beyond: Performance management to the rescue

Herman Aguinis & Jing Burgi-Tian

This journal article suggests that the scattered features of PM's potential are best when brought together in a strategic, relevant, and intentional way.

" … Implementing evidence-based performance management practices can not only help address pandemic-related talent management challenges but also allow organizations to thrive after the pandemic is over."

Highlights:

• Defines performance management as future-driven, ongoing, and aligned with org goals
• Describes how evidence-based PM can be a life raft for orgs to use during unprecedented transitions like the COVID-19 pandemic
• Maintains that PM, while evolving, still fulfills a strategic, developmental, and documentary need
• Recommends using evidence-based PM techniques, such as measuring results, in addition to behaviors, measuring adaptive performance, and using multi-rater processes

Are Peer Reviews the Future of Performance Evaluations?

Alessandro Di Fiore & Marcio Souza

This article talks about the diversification of sources within performance feedback, in which peers help provide managers with a fuller view of their employee’s work and interactions.

"The opportunity to create a socially-based feedback system feels even more urgent during the COVID-19 crisis, since many people are working remotely and without the same level of daily interactions with managers."

Highlights:

• Provides an overview of socially focused feedback as part of the PM process
• States that peer feedback is intended to help capture performance and behavior among remote employees who are less visible to their managers
• Explains that aggregated feedback assists managers in focusing their development conversations
• Advises that crowdsourcing techniques for PM must consider who’s giving the feedback, what categories they’re assessing, when it’s given, and how (anonymous? weighted?)

How Do You Evaluate Performance During a Pandemic?

Lori Nishiura Mackenzie, JoAnne Wehner & Sofia Kennedy

This article highlights the need for continuous awareness and accountability—both individually and on a team level—together with empathy and compassion to dismantle bias in hybrid work.

"Figuring out how to evaluate and reward employees fairly is hard even in the best of times. In this crisis, managers are facing a trifecta of conditions that make the task even harder because they’re likely to give rise to increased bias."

Highlights:

• Emphasizes that managers should use empathy when balancing rewarding high performers and coaching / developing lower performers
• Argues that, during times of crisis, managers are likely using their “fast-thinking” brains, which increases the chance of bias
• Explains that implicit preference for those working in-person is increasing PM bias in hybrid workplaces
• Recommends managers become crystal clear on evaluation criteria, combing for any unintended consequences, and “monitoring” other managers to ensure consistency and equity

Additional Articles to Check Out:

1. “Technology Can Ease Hybrid Work’s Performance Management Woes," SHRM, D. Zielinski, 2021.
2. “What Psychological Safety Looks Like in a Hybrid Workplace," Harvard Business Review, A. Edmondson & M. Mortensen, 2021.
3. “How One Company Worked to Root Out Bias from Performance Reviews," Harvard Business Review, J.C. Williams et al., 2021.
4. “How to Do Performance Reviews – Remotely," Harvard Business Review, R. Knight, 2020.
5. “Trust Is Key For Performance Management When Working Remotely," Forbes.com, A. Gaskell, 2020.

Why We Care

Performance management (PM) is critical, even in the most ordinary of times. It’s one of the few talent practices that touches every single employee in the organization. It helps employees set goals, receive feedback, and adjust their daily work practices. Performance assessments impact compensation, promotion, and a host of other job-related opportunities. Whether it’s formal, informal, carefully designed, or ad-hoc, some form of PM is happening in every organization every day.

Given the foundational nature of PM, it’s unsurprising that it significantly impacts key organizational outcomes. For example, in our Fall 2019 study of Modern Performance Management, we identified “3 Cs” that drive performance—culture, capability of managers, and clarity. In that study, orgs that scored high on:

• Culture—were 32% more likely to experience high employee engagement and 97% more likely to experience high organizational performance
• Capability of managers—were 12% more likely to experience high individual performance
• Clarity—were 28% more likely to experience high employee engagement

But we live in a different world now from 2019. Lots of articles have been written about how PM needs to change to better fit a hybrid world. We even recently wrote one—leveraging our 3Cs model from the 2019 study¹ and applying insights from how best to manage hybrid workers (see Figure 1).

But you all know—we love our data. So, while we firmly stand behind the model in Figure 1, we want current data to help us understand what’s happening with PM today—and to contrast that with what we knew about PM right before the pandemic hit.

Our Hypotheses

We have a number of hypotheses for this research—some of the primary ones include:

• The 3 Cs model will remain intact. Culture, clarity, and capability of managers will remain critical to how we should be managing performance in a hybrid world of work.
• Capability of managers will be more important. Given that employees—working in hybrid environments—are likely to be less directly exposed to some of the visible aspects of culture (offices, broader team dynamics, etc.), we think capability of managers will be more important than ever in enabling effective performance. In particular, skills such as coaching and managing difficult conversations are likely to become far more critical skills for managers.
• The importance of clarity—and specifically data—will also increase. While it seems relatively obvious that employees and managers will need to talk more about goals, progress, and adjustment, we believe there’s more to it than that. Specifically, we think that providing data-based insights to employees and managers will be key to both groups asynchronously understanding their performance and making adjustments more quickly.
• Trust in PM is at risk. Given the ad-hoc nature of many orgs’ approaches during the pandemic, we may see an increase in people not believing that their org’s PM is objective. Fairness in an org’s PM process is crucial for orgs to gain and retain their employees’ trust—otherwise, lack of employee trust can trigger turnover.
• Underrepresented minorities will have a less favorable view of PM. In our previous study, we found that women had a significantly worse perception of PM. In this current study, we’re collecting more demographic data so we’ll be able to compare different groups’ experiences more effectively.

What We’ll Research

Through this research, we’re looking to answer the following questions:

• How has PM changed prior to the start of the pandemic, in terms of philosophies, practices, and systems?
• What should managers be doing differently to supervise workers in a hybrid world? How can orgs support them?
• What broader practices and systems should orgs adjust or implement to enable PM to work more effectively in a hybrid world?
• How should orgs adjust their practices to ensure equity for underrepresented minorities?
• What are some examples of how orgs have adjusted their PM approaches?

How to Participate

We’ll be conducting this research over the next 4 months and invite you to participate in the study in the following 3 ways:

1. 1. Join the conversation. We’re conducting a roundtable on this subject on September 22, 1 pm ET. You can click here to register and join the waitlist.

1. Take the survey. We rely on responses from our community to help us provide insights to you.
2. Let us interview you. If you're working on PM at your company and are willing to talk to us about this topic for 30-45 minutes, reach out to us at [email protected] and we’ll schedule a discussion at your convenience.
3. Share your thoughts. Read our research and tell us what you think! Shoot us a note at [email protected]. Your comments make us smarter and the research better.

More Resources

You might be thinking, “Love that you’re doing this study, but I need help NOW.” No problem, we’ve got you covered with a host of RedThread resources that can help you get started:

• Designing Performance Management to Work for Hybrid Work (Free Reworked article—August 2021)
• Managing Better: Piercing the Fog of Today’s Uncertainty (Member-only article on enabling managers during the pandemic—October 2020)
  • Managing Better Infographic (Free infographic summarizing article on enabling managers during the pandemic—October 2020)
• The Double-Double Shift (Member-only article on improving PM for women during the pandemic—June 2020)
  • The Double-Double Shift Infographic (Free infographic summarizing article on improving PM for women during the pandemic—June 2020)
• Leveling the Field: Making PM Work for Women (Member-only article on improving PM for women—June 2020)
• Frontline Workers: Creating a Performance-Driven Culture (Member-only article on specific practices orgs can use to help frontline workers perform better—November 2019)
  • Frontline Workers: 7 Practices to Keep Them Engaged and Growing (Free infographic summarizing article on PM and frontline workers—November 2019)
• The Makings of Modern Performance Management (Member-only article on the 3 levers of modern PM—October 2019)
  • How Effective are Your Performance Management Practices? (Free infographic summarizing article on the 3 levers of modern PM—October 2019)