The future of performance evaluations - Challenges & industry overview

Performance evaluation has for several decades been a topic of conversation in CXO meetings and boardrooms. Fast forward to 2021, a significant portion of our digitally enabled workforce has adapted to working from home; organizations have accelerated the adoption of hybrid collaboration tools for a flexible and productive workforce. One thing is for sure, the pandemic has taught us that we are resilient, several of the roles can effectively be delivered from anywhere, and more importantly, the world has become a level playing ground. This begs the question: how many organizations invest time looking at their performance management process with a fresh lens?

The last 12 months have seen a dramatic shift of human behavior in embracing new ways of living, working, collaborating, and delivering in the backdrop of the pandemic. As the vaccine roll-out strategy gains momentum, organizations are taking the stance of people first strategy not bringing the workforce back in a hurry, and millions of people continue to work from home. Imagine the lifestyle changes that this has resulted in from the way we shop, socialize, and entertain. The need for personalization and recommendation engines has crept into our lives to simplify our needs. 

However, this has not seen a shift in the way we are evaluating our employees.  Are we ready to operate in a hybrid environment where some employees will continue to work remotely while others will be at the workplace?  Are our managers equipped to embrace this change and remove the bias that may creep into a hybrid model?

Here are four dimensions of how the future of performance evaluation needs to evolve for organizations to stay relevant:

• Culture of trust – The traditional hierarchy of in-person meetings is mostly a thing of the past. Several studies indicate that productivity has increased working from home. It is essential for the organization to base the performance evaluation culture on outcomes rather than other dimensions of time and initiatives. Adoption of a “trust” based culture is important to drive loyalty.
• Empathy – The ‘human element’ has come to the forefront of managers and coworkers understanding their colleagues' diverse needs.  Moving a traditional workday into blending personal and professional needs requires support from all dimensions. Research has shown that mental well-being is the need of the hour, and an organization that accepts and promotes this understanding will stand out to its employees.
• Collaborative feedback – Moving away from a manager-driven performance culture to a team/peer-based feedback is the need of the hour. The elements of what defines performance are seen through the lens of several team members, and the ability to thrive in a collaborative manner to deliver work will be the secret sauce of a new-age performance culture. It is like a swarm of bees that need to collaborate to feed the shared goals and objectives. The process of feedback and the manager's role has to pivot – being like an aggregator model – and focus on ‘how’ they are accomplished through a manager-enabled - peer evaluation process.
• Ongoing vs. once a year – Frequency of performance feedback is an essential aspect as we think of learning from the past. The organization's culture plays an integral part in feedback – some organizations prefer radical candor while others prefer a sandwich approach to feedback. The frequency and medium need to be aligned with the culture. Another aspect is to shift to an informal process to ensure that the objective of performance evolution is more developmental than punitive. 

2021 and beyond will be defining to the ecosystem on the agility of the organizations to change legacy processes and make sure that employees feel integrated through the culture of feedback and recognition. The need for pivoting to an agile, informal, and peer-based model is a bold but necessary step!

Disclaimer- ‘The views and opinions expressed in the article are those of the author and do not reflect the organization’s practices that he is part of.’