The robots have arrived.
A 2015 report by CNBC marked the arrival of robots which will change the way the work is done. By the same year, 41 percent of companies implemented automation across multiple functions and 9 percent enterprise-wide. As a result, 83 percent of the organizations predicted emergence and demand of new jobs and skills respectively.
Fast-forward to 2019, a lot has changed in the context to the world of work. It is not only automations or machines but series of issues (see below) have reinvented the workplace and the businesses. Talent has become more than critical to any business.
Attracting and retaining has turned out to be a major obstacle in context of the new world of work. And it wouldn’t be surprising to mention that we are facing talent crisis! Adding to the woes, all major economies are facing ‘shrinking population.’ Hence, lower birth rate will create a shortage of workers, forcing companies to grow through “increased productivity and quality of labor.”
This concludes that Engagement, Productivity, and Learning will be the growth drivers for the future.
However, with the emerging world of work, the definitions and ways of ‘engagement, productivity, and learning’ have changed. For e.g. gig economy and distributed workforce, has added altogether, a different dimensions to the ways we engage and develop our employees.
How has the new word of work impacted organizational models?
With the disruption in the ways of working, organizations need to redesign themselves. According to a 2017 Deloitte Global Human Capital Trends,
Today, the concept of agile has taken over other the traditional models because an agile organization allows:
- Shared values and culture
- Transparent goals and projects
- Free flow information and feedback
- People rewarded for their skills and abilities, not position
According to the data collected, organizations have become more agile in their functioning.
The good news is, adoption of agile models have impacted the performance management of the organizations. According to the 2019 Deloitte Human Capital Trends, 54 percent organizations observed significant performance improvement when they adopted agile models.
How can Performance Management Adapt?
In a workshop conducted during the People Matters Tech HR India, 2019 Bill Pelster, Co-Founder of Bersin Academy, shared how organizations can reinvent performance management for new model of work:
Make goals relevant to business
According to Don Sull, teams with specific and ambitious goals increase achievement from 50% to 80%, and to 90% with feedback.”
Your employee’s goals should be relevant to business and should be characterized by three features:
- Frequent Up to Date
- Ambitious Stretch
- Transparent, Accountable
Also, targets must be tailored to each level to be meaningful. For e.g:
Developmental focus is critical
High-impact organizations empower individuals and teams with effective feedback and in-th flow development.
According to a report by 2018 report by Deloitte, it was found that:
Offer frequent and transparent reviews
According to Bersin’s Acdemy, organizations that revise or review goals quarterly or more are 3.5 times more likely to score in the top quartile of business performance.
Pay for performance for ‘Fair & Transparent’ rewards
According to various researches, Deloitte and McKinsey research both found that fair and transparent pay for performance is a significant driver of success. This means there must be clear goals, goals must be aligned, and goals must be relevant to the overall business (OKR methodology).
However, with evolving ways of evaluating and measuring performance, it is equally important to have more flexible, more transparent, more frequently reviewed pay practices.
(This article is based on the insights garnered from the discussion during Designing performance management at TechHR Workshop conducted during the People Matters TechHR India Conference. If you'd like to be a part of such workshops to learn from many such experts, be sure to register for TechHR Singapore Conference from Feb. 19-21, 2020 at Marina Bay Sands, Singapore. )