Performance management today is a vital tool to accelerate and promote talent development within a company. Companies today experiment with a range of performance review systems, from ones that are continuous to others that occur annually.  Companies are structuring their performance management systems in a way that boosts employee engagement and creates a positive employee experience that enables employees to perform better. 

But while companies have been innovating to create better performance review systems, the shift to a hybrid workforce has made it challenging for many. For Infobip, a global communications company, this challenge took the form of conducting performance-related meetings. “We've been doing our evaluations digitally all along, but not having one-on-one meetings is a challenge this time. They are a vital part of the assessment process, but now we do them online,” notes Faisal Wahedi, Head of People Operations – India, Sri Lanka, Bangladesh & Nepal at Infobip. But while such challenges were easy to overcome with the use of technology, the performance review systems lacked a crucial ingredient that digital tools haven’t been able to account for. That is the need for empathy in our digital processes. 

The role of empathy

Empathy is commonly defined as the ability to detect and understand other people's feelings. The World Economic Forum states that in a business context, improving empathy can reduce stress, build more positive relationships, and even boost revenues.

When it comes to embracing empathy, companies today are aware of its relevance in the modern workplace.  According to the Businessolver State of Workplace Empathy Special Report, over 87% of CEOs believe empathy is directly linked to a company’s financial performance. Not surprisingly, employees tend to stick around empathetic companies. The report showed 95% of employees are more likely to stay with an organization that empathized with their needs while 81% of employees would be willing to work longer hours for empathetic employers. 

Yet while many recognize the importance of empathy, companies struggle to make empathy a part of how they operate. The nebulous meaning of the word in a corporate context and the lack of processes designed to be empathetic can lead many to experience an ‘empathy gap’ between leaders and teams. For example, the Businessolver report noted that an overwhelming majority (91%) of CEOs say their company is empathetic, but only 68% of employees agree.  Additionally, only 45% of employees view CEOs in general as empathetic, versus 87% of CEOs.

It will be important to address this gap. “Empathy is a core behavior and should be incorporated into everything an organization does, from reaching out to potential candidates, to negotiating salary and job profiles, and onboarding and training, or allocating responsibilities or evaluating them towards the year-end,” explains Faisal. This means embedding empathy into business processes and ensuring that managers and business leaders make it a business priority. And performance management is an important function to begin the conversation. 

Building empathetic performance reviews

“Empathy would go a long way in improving and sustaining performance,” adds Dr(HC) Guruvayurappan PV, Chief Human Resources Officer, Omega Healthcare Management Services. With the tumultuous business environment, ensuring employee performance is key. 

One way to build empathy is to focus on creating human connections. “The human connection was incorporated through constant communication between manager & employee in the review process,” says Sharon Narang, HR Head, Wibmo, a PayU company. “This was done throught creating quarterly OKR's (quarterly goal setting & review meetings). This was supported by breaking individual goals into smaller, measurable milestones.”  The company made its performance system more empathetic by focusing on designing “employee centred quarterly check-ins and ensuring regular two-way conversations.” 

The impact of Covid-19 can also be felt on how companies conduct performance reviews. “Taking into consideration the impact of Covid on each employee’s life, giving allowance for any temporary slack and then assessing the performance will be a significant modification that Omega Healthcare will follow,” notes Guruvayurappan, explaining how “employees are more confident about themselves when they feel that their concerns are taken seriously. Making the process more empathetic surely improves the performance reviews. An employer’s relationship with the employee strengthens when he/she takes a genuine interest in the employee’s entire well-being. It establishes a personal connection that encourages higher performance.”

For Faisal, it meant ensuring that not all conversations were centered around productivity. “Our people-first initiatives like the ‘Employee Outreach Program’ centered around having one-to-one conversations with all our employees every quarter to check on their well-being. Or the ‘Coffee with MD’ session in which our MD meets with two employees every day to have an open talk about their concerns/challenges, at work or in their personal lives. Both of these are candid conversations, and the subject of ‘work’ is not brought up until the employee specifically requests it. The focus of these discussions is ‘feelings’ and not ‘performance’.” By adding such components to their overall performance management, companies slowly improve the marker on making businesses more empathetic.