As we near the end of another decade, we can observe several latest trends in performance management. Organizations are getting increasingly focused on employee well-being. They are willing to alter the old practices of employee performance management and want to try new things. HR professionals are also waking up to the changes in the performance management domain and interested in taking up a performance management course that can augment their learning and helps them stay ahead of others in the HR domain.

Performance management as a vertical is seeing a host of changes. A recent study from Mercer concludes that 50 percent of employers are planning to change their approach to performance management in the next one and a half years. Out of these, 48 percent of employers are planning to make drastic changes to their performance management systems. 67 percent of those say that the changes need to be revolutionary in nature in order to make a real impact. This is happening because companies are realising that their processes of evaluation of employees are not just traditional, they are obsolete to an extent.

Organizations believe that there are fundamental changes required in the performance management practices of companies if they want to build a culture of high performance. This is also critical if they want to stay relevant in the minds of current and future employees.

In the quest for making relevant changes to the performance management domain, companies need to adapt to the key trends in this domain. Some of the main trends are listed below –

1. Continuous Evaluation Instead of Annual Appraisal

One of the biggest changes will be in the frequency of performance appraisal. The current structure of annual appraisal misses out on the big picture. Instead of this, there should be continuous dialogue between the organization and the employees. This will drive the employees to improve themselves on a regular basis. It will also provide them with immediate feedback on a job well done and motivate them. Continuity in the evaluation will also foster an environment of constructive feedback which will create a productive atmosphere in the organization.

2. Do Not Label Employees

The appraisal system of today tries to label employees by their rankings. The rankings stick to the employees for the rest of the year and affect not only their morale but also the perception of people who work with them. The ranking process can be done away with and instead of that a holistic assessment process can be brought in.

3. Evolution of Performance Appraisal as a Motivator

In an effort to closely link the values of the organization, a company must enable the employee to give their best performance instead of trying to force-fit them. This should become a mantra for the company and applicable in a continuous manner.

4. Create an Environment of Learning

One of the key features of a productive environment is the ability of the employees to learn and unlearn. As new technology replaces the old, the old ways of working should also be replaced along with old ways of thinking. Organizations need to continuously encourage the employee to keep learning and adapting. To make learning a continuous process, managers must also become teachers. As mentors to their team, they can motivate them and become their soundboard when required. This will foster an environment of trust as well as decrease attrition since employees will be able to share with each other in a more positive manner.

5. One Size Does Not Fit All

To get effective results out of a performance management system, the company must strive to assess employees as per their job requirements. Not all employees should be rated on the same scale. Instead, different subsets of employees should be assessed differently.

According to a report from Deloitte, revamp of performance management is a primary focus of 79% of top HR executives. They want to make performance dialogue more meaningful than it is currently, for their organizations.

Companies need to provide a framework to the managers in the organization to get effective 360-degree feedback from the employees. A 360-degree evaluation will allow for feedback not only for the employee but also for the organization from the eyes of the employee. They should also minimise unnecessary processes and hierarchy to ensure that the feedback reaches the right ears. All these steps will make the overall employee experience better.

It is vital that an organization works towards making the experience of its employees holistic and performance-driven. The performance should be rewarded on time and improved ahead of time. Companies need to take cognizance of the fact that this is an employee-driven market. The best talent will come only when the organization makes an honest effort in becoming an employer that appreciates a good performance.