The roots of Performance Management can be traced to the early 90s when companies started to link their employees, teams and departmental goals with executive management’s objectives to improve operational performance. The drive to establish this link birthed several concepts including the OKRs – an acronym for Objectives and Key Results – which helped large organizations accomplish aggressive goals.
A recent Deloitte research revealed that the top priority of over 75% of HR executives is a holistic restructuring of performance management systems with 38% categorizing this under the ‘very important’ section of the quadrant. Also, 90% of companies that have redesigned performance management acknowledged direct improvement in employee engagement and 83% noticed significant improvement in the quality of conversations between employees and managers.
Effective performance management system must also become dynamic and evolve quickly enough to manage an evolving workforce dominated by employees that demand a process that acknowledges and supports their individual needs and talents as well as promotes a sense of purpose on the back of clear expectations and real-time feedback.
Deloitte did a complete overhaul of their performance management system by reframing the reviews to focus more on what the leader would do with each team member in future rather than how they would rate them for their tasks. In addition, it was established that accurate feedback was achieved when certain questions were asked differently i.e. the conversations were moved away from the skills of the appraisees to the intentions and future actions of the appraiser.
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