What does 2019 have in store for performance management?
2018 was another year of a major evolution in performance management and, as we predicted in our performance management trends of 2018 article, organisations across all business sectors have continued to move away from traditional annual appraisals, striving for a simpler, more effective performance management system that is ongoing throughout the year.
As we look towards 2019, we have highlighted five performance management trends that organisations will be focusing on over the next year, based on our discussions with industry analysts, HR leaders and academics, as well as our own customers.
1. Employee Wellbeing Will Become Part of Performance Discussions
Stress and anxiety are debilitating in the workplace and, unfortunately, these issues are a bigger problem than ever. One study found that a third of UK workers suffer from anxiety, depression or stress. The same survey showed that 40% of employees have either taken time off work or asked for their workload to be reduced due to their mental health.
As Josh Bersin has stated, “Wellbeing is still a big part of HR. It’s not surprising that productivity is suffering when stress levels are high; employees feel overwhelmed and they’re getting less work done. We’re losing approximately £42 billion a year because of stress at work, much of which manifests itself in presenteeism.”
Detecting and addressing mental health issues early on is increasingly key when it comes to keeping employees performing at their best. Forward-thinking companies are waking up to the fact that mental health issues play a serious role in terms of performance and productivity — the issues of wellbeing and employee performance go hand in hand.
Organisations such as Clydesdale & Yorkshire Banking Group have begun including wellbeing questions within their regular manager-and-employee coaching conversations in order to ensure that potential mental health and workplace stress issues are spotted and addressed early on. This is in line with recommendations from Deloitte’s 2018 Global Human Capital Trends report, which emphasises the need for organisations to be social enterprises, rather than simply business enterprises.
Not only are businesses starting to take this seriously, but employees now have expectations in this area and are becoming more vocal — we are holding businesses to account when it comes to wellbeing, and we expect them to put measures in place to promote healthy, clear minds.
As we approach a new decade, care for employee mental health and wellbeing will be one of the biggest performance management trends to watch out for, with employers putting programmes in place relating to financial wellness, mental health wellness, mindfulness and stress management.
2. Feedback will Need to Be Supported By Regular Coaching Conversations
Over recent years, the performance management debate has focused heavily on the importance of frequent, real-time feedback. However, the quantity of feedback is not a silver bullet that will magically produce a workforce of engaged and productive employees. If companies want to achieve genuine performance gains, frequent feedback needs to be accompanied by regular coaching conversations, during which the manager and employee step back and reflect on the feedback that has been given, using it to discover strengths and highlight areas for development.
This is a well established technique for sports professionals at the top of their game. I was recently at an event where the head of one of the British Olympic squads talked about how scheduling regular time to pause and reflect on feedback and recent performance had helped them achieve continual marginal gains that led them to win multiple Olympic gold medals.
At work, such coaching conversations allow an individual to address and develop in terms of personal and professional development. The performance management trend towards coaching conversations and continuous learning has been driven in part by the increasing recognition of the power of growth mindset and continuous learning, something that Microsoft CEO Satya Nadella has heavily pushed at Microsoft with resounding success.
3. Performance Management will become “Meaningful” and “Human”
One of the major criticisms of performance appraisals or performance reviews is that they are contrived and not authentic. They are too focused on box ticking and measuring annual objectives and competencies and don’t feel relevant to employees’ day-to-day work lives.
This is changing rapidly and the number one objective that HR professionals are now telling us they want to achieve for their performance management system is for managers and employees to have more meaningful conversations about performance and development.
Embedding a culture of regular, authentic performance conversations is easier said than done, however, we’ve worked with well over 100 organisations over the last two years who have managed to achieve this. From this experience we’ve learned that the most successful organisations have done 5 things:
- Started with ‘Why’ — emphasised the personal benefits for employees and managers in having meaningful coaching conversations
- Used experiential training to prepare managers for having honest conversations
- Provided a clear framework for having conversations with suggested coaching questions and prompts
- Used specialist performance management technology to reinforce the framework, provide visibility, build new habits and change behaviours (read more on this here)
- Created accountability and led by example from the top of the organisation
4. Performance Management Will Focus on How to Make Employees and Managers More Effective
Over the past few years, HR has been primarily concerned with employee engagement — and for good reason. Highly engaged employees are loyal employees who will go the extra mile to get their work done. As a result, employee engagement technology has grown significantly recently.
However, as we move into 2019, analysts including Josh Bersin have predicted that we will see a new trend — the optimisation of productivity and performance, on both an individual and team basis. In other words, now that we have measured engagement, it is time to take action and improve it with the aim of making employees more productive.
According to Gallup, the biggest factor in terms of employee engagement is an employee’s manager. With this in mind, performance management and performance management technology will need to focus more on supporting and empowering people managers to be more effective, and enabling employees to bring their best selves to work. This, combined with wellbeing initiatives, will play a vital role in boosting employee productivity.
5. Artificial Intelligence (AI) will Arrive in Performance Management
AI is already having a big impact in recruitment and learning — there has been a significant innovation in tech within these areas. In 2019, attention will turn to AI within performance management.
For organisations who have made the move to continuous conversations and feedback, we can start to use AI to draw out themes from large amounts of qualitative data being gathered from feedback, goals and conversations. We can then go a step further and use software to coach employees and managers in real-time based on the feedback being received, and perhaps even predict future high performers based on patterns, the content of feedback that is requested and received, and goals being set and achieved.
At the heart of AI in HR is improved people decisions, and the growth of AI in HR will ultimately provide unbiased data that will guide decisions such as who to promote, and offer insight into who requires additional training to enable better performance while combating workplace bias.
All of these trends are currently in the early stages of development, but we’ll start to see them come to fruition during 2019, and the potential is truly exciting.