There is perhaps no topic more misunderstood and maligned in digital age HCM than how best to appraise employee performance. In 2020, HR executives find themselves in the unenviable position of not only having to navigate the rough and murky waters of digitalization, but a steady stream of buzzwordy and often contradictory surveys, corporate press releases and thought leadership proclamations on the matter.
Are you an immature organization? Time to evolve! Stack rankings – not useful! Not implementing OKRs? What about an agile framework? You should be! Hierarchical structures? Obsolete! 360-degree feedback? The only feedback…
Etc., etc., etc.
Our experience as a global HCM software company has provided us with valuable insight into the evolution of talent management in organizations of all shapes and sizes. And while many thought leaders would have you believe that your only option is to evolve your performance management models or face extinction, the reality is not so black and white, but rather a mishmashed blend of gray. What we have learned in our 15 years of dedicated service is that there exists a diverse spectrum of performance management methodologies, with most of our customers deploying – and preferring – a mixture of both traditional and modern frameworks.
And although priorities, culture and strategy tend to diverge across this spectrum, most macro performance management goals are generally the same:
Evolve, progress and create tangible value in performance management.
Treading Carefully in the Face of Change
While there is far from unanimity when it comes to defining the elements of an ideal performance management methodology, most executives agree that the paradigm for performance management is shifting. A number of important events have occured that have led to an increased scrutiny on how employee performance is evaluated, and, in turn, calls for substantive change.
Notably, there has been a significant shift in workforce demographics and preferences over the last 10 years.
As reported by HR Drive, employers are struggling to manage a labor force that now stretches across four unique generations, from Baby Boomers to Gen Z. Whereas one generation may be partial to career development and flexibility, another could just as easily prefer a challenging work environment with competitive pay. Coinciding with this evolution in preferences, we find a market landscape that is not only prone to rapid advances in technology, but one in which there exists a very real shortage of qualified talent.
Companies have been forced to adjust processes to meet the needs of a diversified, empowered and tech-driven labor force. As described in detail by Harvard Business Review, organizations from big tech (e.g., Adobe, Dell, Microsoft, etc.) to the professional services firms (e.g., Deloitte, Accenture, PwC, etc.) have all modified their employee appraisal frameworks in ways that even 10 years ago would have been considered radical.
And while these changes – from removing rankings to dropping reviews altogether – have led to mostly positive results, there exists a hard truth that the headlines often ignore:
Most organizations are not Adobe.
Nor are most companies on par from a resource/cultural perspective with Dell, Microsoft, PwC, Deloitte or Accenture. The harsh reality of performance management is that organizations, should they choose to evolve at all, must be allowed to do so at their own pace. Square pegs simply don’t fit into round holes, and it is for this reason that we here at Avature decline to adhere to the methodology-specific doctrines so prevalent in HCM thought leadership today. What works for one organization is specific to that organization’s culture, leadership and years of accumulated experience – i.e., qualities that should be respected given the long-term investment of resources and time.
While the end goal for certain organizations may be the agile model so often discussed, it is a goal that must advance in incremental stages, or it won’t advance at all.
Steering Clear of the Performance Management Technology Trap
There is no one size fits all methodology when it comes to performance management.
All organizations – even those using similar frameworks – have unique performance management needs. In fact, perhaps the only thing more perilous than not having any performance management framework, is trying to shift to a modern model prematurely. While most executives understand that performance management is due for a makeover (i.e., Mercer reports that only two percent of companies believe their performance management frameworks actually deliver value), it’s a grave and time-consuming error for organizations to simply attempt to imitate whatever practices happen to be trending in the business press.
As technology continues to advance at a rapid pace in both performance management and HCM generally, there is a disheartening tendency for organizations of all shapes and sizes to develop an overreliance on solutions. That is to say, although there are many talent management platforms available that offer exceptional user experiences with powerful functionalities, technology alone cannot, and will not, shift culture. Organizations that fail to recognize the importance of employee behavior/buy-in when moving to a modern performance management model are likely to find themselves in the precarious position of trying to adapt their company culture to a solution, rather than adapting a dynamic solution to their unique company culture.
This is known as the “technology trap,” and once you’re stuck in it, it is quite difficult to work your way out.
The role of a performance management solution in the digital age is to empower and enable an organization to implement the framework of their choice. It is only with a “culture before solution” mentality that organizations can succeed in aligning their leadership and labor force to the degree necessary to generate tangible value from their performance management solution, and avoid the pitfalls of a misguided dependence on technology.
How Does Avature Help Its Customers ?
With over 650 clients, including 110 of the Fortune 500, describing Avature’s customer base as “diverse” would be an understatement.
From companies looking to go digital for the first time, to those in need of robust customization and sustained adaptation, we have seen it all and we have built it all. As the cornerstone of all things Avature, our focus on flexibility plays a key role in how we help our customers not only manifest the solutions they envision, but reach their full talent management potential.
In this regard, a recent “evolution” success story immediately jumps to mind – Pontoon.
A HR outsourcing company and a global business unit of The Adecco Group, Pontoon was operating with an international labor force extending to 35 countries and numbering in the thousands at the time of our initial collaboration. Pontoon was keen to further expand their global reach, and yet, with a disjointed and paper-based approach to their performance management framework, there was no effective mechanism to track or engage employees on a global scale.
Together, Pontoon and Avature were able to build and deploy an innovative core platform capable of providing management with an in-depth view of employee profiles all over the world. Pontoon is now empowered to not only digitally manage their essential strategic talent management processes (such as performance management, succession planning and internal mobility), but to do so through a platform that improves data collection, optimizes cross-team communication, and reduces the burden of time-consuming administrative tasks.
In working with our talent management experts, Pontoon took their very first steps towards performance management modernity, and, perhaps most importantly, did so at their own pace.
Performance management is changing, and Avature is here to support our clients with a flexible approach. Whether in need of a robust out-of-the-box solution, or the ability to customize and configure with a specific framework in mind, Avature is uniquely positioned to provide clients with innovation and tailored stakeholder experiences as they look to evolve and further development into performance management in the digital age.