Performance management (PM) can be an unpopular topic at every level of the workforce. Mention “performance evaluation” or “performance reviews” in any meeting and watch the collective eye-roll as people think of the dreaded year-end process, full of bureaucratic activities like ratings and form-filling reviews, often with lackluster results.
At the end of the day, people want to improve their performance when needed. And when performance management is not a separate administrative process focused on ratings, reviews, or forms, it can enable people to do their best work.
Our research on High-Impact Performance Management found that high-performing organizations use technology to embed performance activities in the flow of work. Whether an organization approaches PM continuously (e.g., frequent check-ins and feedback) or traditionally (e.g., annual review), the PM technology market offers advanced capabilities to improve process execution and create a better workforce experience.
Workforce Expectations Are Changing
Performance management can be a highly emotional issue. With a Net Promoter Score® (NPS®) of negative-60, it’s clear that poor experiences with PM generate strong opinions. In low-performing organizations, PM is often an episodic, subjective, and confusing process. It can also be manual and unorganized, with individuals and managers frantically updating goals and performance retrospectives before the year-end review timeline.
Perhaps the greatest catalyst for considering changes to PM technology can be attributed to the changes taking place in the workforce. As organizational hierarchies become flatter and work is increasingly done in teams, old models of hierarchical, top-down performance management become obsolete—but the ability to manage performance in teams becomes vitally important.
The composition of the workforce has expanded to support longer careers and include different types of workers (e.g., off-payroll). Yet, with all these changes, PM has not adjusted to meet these new needs. As the nature of work continues to change, technology solutions can help enable organizations to stay ahead of meeting emerging needs and embed performance activities in the flow of work—where the work happens.
New Names, Same Capabilities
The negative perception of performance management has spilled into the solution provider market. Many solution providers have tried to avoid mentioning “performance” in their solution’s name altogether, leaving potential customers confused about what capabilities are offered. How can a company looking for option in PM solutions accurately evaluate providers when the vendors don’t even list themselves as performance management?
As part of our study of PM solutions, only 54 percent of providers surveyed use the term “performance” in the title of their solution offering, leaving the remainder of the market positioning themselves with various branding terms (see Figure 1). Despite the different naming conventions, all solutions covered in the study used the word “performance” in the description of their solution.
Figure 1: Commonly Used Names and Descriptions of Rebranded Solutions
Source: Bersin, Deloitte Consulting LLP, 2019.
Many technology solution providers are positioning their offerings as forward-looking solutions that assist workers in taking the next step in their development, describing the solutions with words like talent, people, career, enablement, and success—rather than performance management. Buyers should look at how a solution can support goal management, multisource feedback, and performance evaluation, and determine how the solutions’ capabilities fit within their organization’s needs.
The Market of PM Capabilities
Today’s PM market offers a range of capabilities that support the various approaches to performance management. Figure 2 shows an explanation of capabilities in two categories: workforce-centric and process-centric.
Figure 2: Performance Managements Capabilities Explained
Source: Bersin™, Deloitte Consulting LLP, 2019.
Workforce-centric capabilities are designed to directly enhance the individual’s experience. With capabilities like on-demand performance summaries, individuals can gain a greater sense of their strengths and weaknesses by looking at a consolidated overview of past feedback. Activity nudges remind people to complete performance-related activities as part of their regular work—instead of in addition to it.
Other capabilities, like bias reduction and peer collaboration, help people improve their work. For example, bias reduction aims to help people identify sources of potential bias as they communicate feedback. Peer collaboration support connects colleagues with similar goals to support social learning—one of the key drivers of outcomes, according to our research. These new technology-enabled capabilities help deliver an enhanced performance experience through simplified information, strategic reminders, and data-based recommendations.
Process-centric capabilities help further streamline and facilitate process execution of PM activities. From performance filters for quickly sifting through individual achievements to customizable preferences for goal visibility, these capabilities can bring greater transparency to PM.
In addition to widely available advanced capabilities, next-generation capabilities such as automatic goal updates based on integrated systems (e.g., sales management platforms) and feedback suggestions based on stakeholder interactions offer greater efficiency to execute PM activities. Taking advantage of multiple capabilities can improve the experience and the process and yield better outcomes.
Aligning Technology with Organizational Readiness
Performance management solutions will likely continue to change rapidly to meet market demand. There is no better time for organizations to keep an eye on capabilities that can improve their workforce experience. The most important consideration when evaluating an organization’s approach to PM is the organizational readiness to adopt new technologies. Technology changes occur much faster than organizational changes, and the best approaches are purpose-driven.
With effective adoption of performance management solutions, an organization can provide a better experience for its workforce while delivering greater transparency and efficiency in the process. That is an achievement that, collectively, everyone can embrace.
Bersin members can access our full market research on performance management solutions, which includes a market primer, findings for buyers, capabilities and differentiators, and vendor profiles. Explore our Performance Management Market Navigator, which serves as a guide to help organizations understand the current availability of solution capabilities and where to find them. The Performance Management Solutions Capabilities Checklists and Evaluation is another valuable tool for assessing current capabilities and evaluating new ones.
1 Seven Top Findings for Enabling Performance in the Flow of Work, Bersin, Deloitte Consulting, LLP / Kathi Enderes, PhD, and Matthew Deruntz, 2018.
2 (1) The “Net Promoter Score” (NPS®) is based on the fundamental perspective that every company’s customers can be divided into three categories: promoters, passives and detractors. Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.; (2) Seven Top Findings for Enabling Performance in the Flow of Work, Bersin, Deloitte Consulting LLP / Kathi Enderes, PhD, and Matthew Deruntz, 2018.
3Performance Management Solutions Providers research, Bersin Deloitte Consulting, LLP, 2019.