According to last year’s study conducted across 140 countries by Gallup, employee performance is adding to significant overheads globally. It indicated that employee disengagement results in productivity losses of more than $500 billion every year and nearly 87% of the global workforce is either not engaged or completely disengaged. 

In order to prevent such losses, businesses need to move away from traditional performance reviews and leverage a cutting-edge approach in the same. But before we do that, we first need to understand the performance issues and how can we better solve them.

Driving away from the traditional approach: What needs to change and how?

Performance issues are primarily the gaps between the desired performance and the actual performance of an employee. Therefore, the first step becomes identifying the skill gap. Corrective actions have to be taken thereafter. Now, in a traditional setup, the process of data generation and gathering is very slow. Much of the valuable data comes very late, i.e. during quarterly or yearly performance reports and assessments. However, for more effective results, the data gathering needs to be done more proactively.

This is one of the main reasons why traditional ‘performance review systems’ are proving themselves to be largely unproductive. Many organizations have already moved towards a continuous improvement process by incorporating tech-driven feedback and development tools. Since data is proving itself to be a holy grail for HR processes, business organizations are simultaneously hiring experts in data analytics and specialized roles are being created to mine more data. 

There are numerous methodologies that can be employed for data gathering and analysis. Some of them include:

i. 360-degree Reviews

ii. Initiating Competency Framework

iii. Benchmarking

iv. In-house Data Collection Tools

v. Insights provided by Third-Party Applications

The best approach is to utilize at least three of these methodologies simultaneously. Not only will it give you different perspectives on the issue, but will also provide you superior insights about what the real issues and what are their root causes. 

Also, irrespective of the fast pace of the market, competitive environment, and the changing need of talent, one must not wait to give feedback at the end of the year and expect an employee to improve instantly. This will only hamper employee progress and ultimately affect the company’s overall performance. The continuous and timely feedback process, on the other hand, helps the workforce to become more engaged. It simultaneously gives them a sense of belonging. They can sense that their organization cares about them and is investing its resources to help them grow. It also enables them to see a clear career path for themselves in any organization. 

An overhaul in a performance review, however, needs to be done carefully. You must consider these alternatives while doing so:

1. Proactive Performance Assessment: A daily check on performance is must. Wherever possible, give daily feedbacks wherever they can be given. A clear goal sheet must be provided to employees to get complete clarity on their deliverables. And this must happen right from the Day 1. KPIs are the best sources to use in order to identify skill gaps.
2. Bricks make a house: In the demanding and fast-paced work environment, it is suggested to align performance goals with a vision. These performance goals must include the business’ vision and mission for a year, which then breaks down to monthly and weekly milestones. Managers must communicate and collaborate with their teams more proactively. Doing so will ensure that employees don’t have to wait for a complete quarter to get feedbacks/assessments on their work progress.
3. Leverage Advanced HR Technologies: Today’s AI-driven smart HR tools have eliminated the need of providing feedbacks physically and have dramatically accelerated the process altogether. These tools can be used where an instant feedback has to be given. The project milestone and employee productivity can also be measured and seen on a real-time basis by the manager and the employee using such systems.
4. Prepare the Future Leaders: Managers are ideally those people that a subordinate must aspire to become. They provide valuable know-how, help an employee overcome his or her difficulties, and serve as a pathfinder during crucial moments. So, managers – who play an integral role to a company’s future – should be rewarded appropriately for grooming their subordinates. This approach will help them become the future leaders that design their own reward programmes, conduct career architectures, and will shift the onus of resource development from HR to directly the immediate manager.

Performance issues are often very specific and hence the solutions must be tailor-made according to the organisation’s individual challenges and requirements. But the common thread here is identifying the gaps at the right time, with the right data, and by taking the right steps for the desired course correction. Feedbacks, and especially proactive feedbacks are important in this scenario. However, feedbacks alone cannot help an employee to groom until and unless it is further backed with the preferred support system and management. 

In general, four profiles that will attract maximum salary allocation in 2019 include technical skill trade, IT, engineering, and marketing. Indians are set to receive the highest appraisal next year in the Asia Pacific – surging ahead of all other countries with an average salary increment of 10%. This is a good news after the uncertainty triggered by demonetization and GST affected this year’s appraisal cycle. Businesses, similarly, are experiencing more favourable market conditions as Sensex continues to make yet another bull run and is expected to give us another all-time high. 

Perhaps, this might as well be the best time to adopt the cutting-edge approach in performance management. It will help all stakeholders to extract greater value with existing resources and equip your business with a competitive edge, benefitting everyone including your employees, your organization, and the broader market.