“To win in the marketplace, you must first win in the workplace.”
- Douglas Conant, Former President & CEO of Campbell Soup Company
With millennials set to dominate the workforce, companies have to reckon with the strong wind of demographic change to win in the workplace. By 2020, millennials are expected to comprise 50 percent of the global workforce, and by 2025, this number will be 75 percent.
More importantly, here is a telling revelation on millennials' approach to work: phased over the next 10 years, millennials will leave their current employers, and only 16 percent are expected to continue in their present organizations.1 Purpose, openness, transparency, collaboration, inclusiveness and flexibility are the Millennial expectations that will shape corporate cultures.
This has unleashed a transformative era of culture, attitudes, business models and work practices. An example of this sweeping transformation can be seen at the offices of a leading North American bank. The shift began as technology employees joined cross-functional product-development teams to make the bank more customer-focused. The business team learned lessons of agility from their IT colleagues while IT learned the nuances of customer needs from the business team. The bank now thinks of performance management in terms of teams and not individuals.
Human Resources (HR) departments are thus compelled to create an ecosystem in which 'employee experience' rules. The first casualty of such an environment is the traditional process of performance review. HR teams are moving away from a rules- and planning-based approach toward a simpler and faster model driven by feedback from participants.
With speed as the new currency of business, rapid innovation is a strategic imperative for most companies — and not just a subset. To get the most of this opportune moment, organizations turn to HR functions to drive higher values.
The innovation-filled HR technology landscape is, at present, a USD 15 Billion market2 — and growing rapidly. Companies are developing new-gen HR systems in recruitment, social media analytics, talent assessment, online learning and other core systems. These systems are transforming cultural paradigms in people management. Specifically, in the area of performance management, the ownership of developing careers is shifting to employees.
Technology-enabled Cultural Shift
It is interesting to note how performance reviews are viewed in general, especially by millennials. There is a near-unanimous opinion that the traditional cookie-cutter approach to performance management will not work. Both frequency and quality of feedback are important to millennials. Nuanced and individualized talent engagement conversations are what employees demand. Managers, on the other hand, look for accurate and real-time information, and the tools to enable such dialogues.
In an attempt to move away from an event-driven, 'five conversations' a year approach to a model of ongoing dialogue, Johnson & Johnson offered its businesses the chance to participate in a three-month-long experiment. They tried out a new continual-feedback process using a customized app with which employees, peers and managers could exchange comments in real time. At the end of three months, 46 percent of managers in the pilot group had joined in and exchanged 3,000 pieces of feedback.
A technology-driven environment led by platforms, tools and apps enables supervisors to engage in constructive discussions and feedback with team members at any time. Technology now allows crowdsourced goal-setting, where team members collaborate and set their customized objectives throughout the year. With real-time visibility into each other's progress, colleagues offer support toward achieving the goals. The result is seamless working between networked teams.
Accurate data and insights are crucial to a technology-driven approach to performance reviews. Analytical and automation tools can consolidate and extract insights from crowdsourced performance data (structured and unstructured) in real time. This provides the openness, collaboration and learning-driven growth that millennials seek.
The right insights can be extracted to decide on rewards, promotions and other career progression measures. It increases the trust factor, enhances social connection in organizations and enables credible coaching and developmental feedback.
When organizations add machine learning and Artificial Intelligence (AI), it further improves the quality of data for better business outcomes. Just the right recipe for all employees, and especially for millennials. In short, technology has paved the way for continuous conversations, which, in turn, promotes engagement in the performance review process.
Agility in Reviews
A performance review process has multiple stakeholders with different expectations. Managers need simple and practical tools to engage with their team members and provide clear goals that align with the company's strategy. Employees need intuitive interfaces for soliciting both feedback and guidance on their performance as a logical step to career growth. HR looks for powerful dashboards to stay informed, and automated processes to allow flexibility in performance management tools.
An agile and technology-driven performance review will, therefore, have to include:
Quick and straightforward goal-creation using the right criteria
Tools to link goals of matrixed teams; easy updating and visibility into the progress of individuals and teams
Workflow clarity that enables shared understanding of goals and measurement
Tools to give, receive and request feedback from anyone in the organization
Ability to call for 'check-in' conversations for direct discussions between employees and managers regarding expectations, feedback and career planning
Creation of individualized review processes with speed and ease-of-use
Mobile applications that allow peers and managers to set, share and collaborate on goals online
Intuitive interfaces and self-serve features for faster adoption by users
Consolidation and delivery of real-time feedback, even in matrixed environments
Direct view on progress of performance processes through versatile dashboards
Integration with productivity tools (such as Slack and Outlook) to incorporate performance into everyday work
Learning and Coaching
Proactive coaching should be a natural follow-up to transparent evaluation and motivating feedback. Real-time survey systems, data and sentiment analysis software, and Organizational Network Analysis tools should come together to achieve this objective seamlessly.
Incorporating learning tools into the performance and development cycle will complete the last-mile growth loop of the 'performance experience.' New micro-learning platforms and Learning Management Systems combined with AI-driven recommendations can be smart performance support systems. Including a self-serve option that allows employees to publish and share learning content will further enhance the experience.
Minneapolis-based Cargill Inc. has deployed an 'Everyday Performance Management' system for their 155,000 employees worldwide. It incorporates daily encouragement and feedback into on-the-job conversations. Managers give forward-looking feedback, and the company has achieved measurable improvements. Adidas transformed its monolithic performance review to a monthly 'feedback loop' that includes the customer experience factor.
Performance is an ongoing activity. And that is why technology-enabled performance management is the future of workplaces. It provides the holistic integration and perspectives required for better talent decisions. It sets the right foundation for meaningful, continuous and engaged conversations between employees and managers. Ultimately, businesses look to enthuse their people in performing their inspired best — and it is such conversations that will have true relevance and impact in boosting the growth, capabilities and revenues of both individuals and organizations.