Performance Management: Evolving Unevenly for the Hybrid Work
August 23rd, 2022
We reviewed more than 20 recent academic, business, and news articles and reports on performance management (PM) to understand the state of the current conversation. We limited our review to the past 12 months, as we conducted a literature review on this same topic last year.
This short article summarizes what we found:
- 4 major themes from the literature
- 5 critical articles we think you should explore
- A complete list of the articles we reviewed
From the literature we reviewed, we identified 4 major themes that reflect the current state of performance management, including how some organizations are changing it and where it is headed:
- Performance management is starting to look more like performance development
- Connections are becoming integral to performance management
- Continuous performance management is here to stay
- Organizations are unsure about how to move ahead
Performance management is starting to look more like performance development
Recent literature highlights the need for organizations to adjust their performance management (PM) practices to help individuals and teams perform effectively in a remote or hybrid environment. One approach suggested in the literature is to make career growth and development an integral part of PM. Recent findings reveal that growth and advancement opportunities are a leading cause of ongoing attrition. For example, McKinsey & Company found that employees leave when uncaring leaders don’t provide career development.
Another approach suggested in the literature is to provide clarity around organizational goals and ensure alignment through transparency and access to information. By being clear about desired outcomes, organizations can make sure employees are setting appropriate and achievable goals.
Connection is becoming integral to performance management
Recent literature, including our own, shows that the connection between the manager and employee has emerged as a critical factor for enabling performance in a hybrid work world. The role of manager-employee relationships in motivating and engaging employees has been highlighted by many in the past.
We also found articles that talk about the role of connections that employees have with their colleagues, leaders, and the organization in driving collaboration and, thus, enabling performance in a remote or hybrid work environment. The literature stresses the need for organizations to be intentional about fostering these connections, for example, by implementing performance management practices that encourage relationship-building.
Continuous performance management is here to stay
The pandemic accelerated the trend toward adopting a continuous approach to PM. We identified articles that shared examples of companies that eliminated or suspended the annual performance review and started conducting frequent check-ins and providing real-time feedback once they shifted to remote work.
The literature stresses the importance of communicating and providing development resources to employees in real time in a hybrid work environment, because of its positive impact on employee engagement. It also helps managers gain greater insight into their employees’ work and better meet their needs. Continuous feedback and employee check-ins are an integral part of this approach.
Organizations are unsure about how to move ahead
Quite a few articles covered companies returning to or updating practices around performance ratings and annual reviews to identify low-performers and areas of low productivity—practices that had been paused or replaced with frequent check-ins during the pandemic. In these cases, the practices are in addition to (rather than replace) the frequent check-ins and feedback practices adopted during the pandemic.
One explanation for the re-adoption of these practices is rising inflation and slow growth in some industries, resulting in the need to freeze hiring, cut the workforce, and reduce costs. As some companies double down on productivity and cost-cutting measures, it remains to be seen whether the frequent feedback and check-in process set during the pandemic will stay in the mix.
5 articles you should explore
From the literature we reviewed, 5 articles (listed below) in particular represent the 4 themes above and contain valuable and intriguing information.
“When teams feel connected, they tend to get more work done and do it faster… Social capital matters to an organization’s performance.”
This article highlights the vital role connections play in employee productivity and knowledge gain. Based on data collected in early 2022, the study shines light on the state of social capital, how it declined during the pandemic, and how companies can build it back.
“Giving equal weight to financial outcomes and development underscores the importance of learning and growth.”
This article highlights the importance of cross-silo collaboration for employee performance and development, especially in sales organizations, and how current PM practices discourage it. The authors describe the common mistakes that undermine collaboration and provide steps companies can take to counter them.
“The biggest impact from performance conversations is often what happens after the review. Too often, nothing happens: The review is an isolated annual event and therefore has little real impact.”
This article is timely and informative, especially as some companies begin re-adopting annual and bi-annual performance reviews. It walks through the do’s and don’t’s of an effective review, highlighting the need to accompany it with ongoing feedback on progress towards goals and coaching for professional growth and development.
“The annual appraisal still plays an important role in the performance management process. It’s just not the only process anymore.”
This article explains continuous performance management and why it is important for organizations to adopt it. It then shows how companies can get it right and some the ways to incorporate it into the talent strategy.
“It may be hard to imagine abandoning decades of tradition and big investments in old-fashioned performance reviews, but the world of work has changed. How we measure employee performance needs to keep up with the lightning-fast speed of change.”
This article examines how traditional ways of reviewing performance fail, as they often focus on whether an employee was able to meet their annual goals and are based on infrequent feedback and meetings. Instead, the author suggests organizations move towards measuring performance by collecting frequent quantitative performance data.
The current literature covers many emerging trends and provides information on how companies are adapting their PM practices. However, we found it lacks insights into the specific practices that impact employee performance in a hybrid work environment and how organizations can start to adopt them.
Complete List of Reviewed Articles
- “How to Conduct a Great Performance Review”, Frank V. Cespedes, Harvard Business Review, 2022.
- “Performance management outlook 2023: The shift towards performance enablement”, Mohamed Ameen, Talent Management, 2022.
- “6 ways to ensure your team achieves corporate goals”, Andrew Kenney, FM Magazine, 2022.
- “Performance Management Shouldn’t Kill Collaboration”, Heidi K. Gardner and Ivan Matviak, Harvard Business Review, 2022.
- “Mark Zuckerberg braces Meta employees for ‘intense period’”, Alex Heath and David Pierce, The Verge, 2022.
- “Proof versus potential: Why women must work harder to move up”, Katie Bishop, BBC, 2022.
- “Women Aren’t Promoted Because Managers Underestimate Their Potential”, Kelly Shue, Yale Insights, 2021.
- “Why it may be time to ditch annual performance reviews”, Arden Madsen, Fast Company, 2022.
- “The Importance Of Performance Management”, Arijana Koskarova, Forbes, 2022.
- “Performance reviews aren't dead – they just need a shakeup”, Amanda Woodard, HRD, 2022.
- “Dump Traditional Reviews to Better Measure Performance”, Amy Leschke-Kahle, MIT Sloan Management Review, 2022.
- Gone for now, or gone for good? How to play the new talent game and win back workers, Aaron De Smet, Bonnie Dowling, Marino Mugayar-Baldocchi, and Bill Schaninger, McKinsey, 2022.
- “Goldman Sachs is bringing back its infamous performance reviews, but experts say it’s a poor management strategy: ‘Exemplary leaders are not going to give up on low performers’”, Aman Kidwai, Fortune, 2022.
- “Google CEO tells employees productivity and focus must improve, launches ‘Simplicity Sprint’ to gather employee feedback on efficiency”, Jennifer Elias, CNBC, 2022.
- Network effects: How to rebuild social capital and improve corporate performance, Taylor Lauricella, John Parsons, Bill Schaninger, and Brooke Weddle, McKinsey, 2022.
- “Performance Development in a Remote or Hybrid Workplace”, MIT Human Resource, 2022.
- “Redesigning performance management for a hybrid workplace”, Kat Boogaard, Culture Amp, 2022.
- “6 Ways to Make Performance Reviews More Fair”, Paola Cecchi-Dimeglio, Harvard Business Review, 2022.
- The Great Attrition is making hiring harder. Are you searching the right talent pools?, Aaron De Smet, Bonnie Dowling, Bryan Hancock, and Bill Schaninger, McKinsey, 2022.
- “The three C’s of effective performance management”, Ian White, People Matters, 2022.
- “Top Three Trends In Performance Management In 2022”, Jessica Kriegel, Forbes, 2022.
- “Five Lessons In Building A Hybrid Workplace For The Future Of Work”, Jeanne Meister, Forbes, 2022.
- “Why Organizations Are Adopting Continuous Performance Management”, Lars Hyland, Training Industry, 2021.