Let me start this piece with a tale of an encounter I had.  A couple of months ago, I had a friendly catch-up with a senior manager at one of the Fortune 500 companies. In the course of our conversation, we drifted into several work-related topics. One of the work-related issues we discussed was employee performance and, in his words, the not too exciting process of performance assessment.

At the time of our conversation, his company had just completed their performance assessment process for the year, and due to the performance rating of a particular employee, he had to prepare a performance improvement plan (PIP), which he was evidently not too pleased about. In my curiosity, I queried why this was such a frustrating task for him, being that it is a critical management responsibility that must be performed for the benefit of the employee and the organization. More so, he had been a manager for a while, and performance assessment is an annual exercise; as such, I expected he should have acclimatized to the task. His response (which I could relate to, as the same is a familiar tale amongst managers) was that the painstaking performance assessment process is such an emotional and mental drain for him and very time-consuming. To layer on the additional responsibility of taking an employee through a PIP was really frustrating.

Later on, as I reflected on our discussion, recollections of several experiences that I had in my prior places of work came rushing in. Some of the most common phrases from frustrated managers and employees that were being replayed are, “Gosh! it is that time of the year again, and I can’t wait for it to be over!” “I just wish we didn’t have to go through this every year!” “I don’t believe in this your process, so I am just doing it to tick the box.”, “You people (HR) have come with this your annual ritual again that we don’t even know what it is used for.” “You people should just allow me to do my job and leave me alone with this your performance assessment.” “I am glad I don’t have to go through that process again” (for exiting managers/employees). These flashbacks and my recent experience with my Manager friend further reinforced the belief that the current performance assessment process in some if not most companies has some significant pain points that lead to widespread dissatisfaction for both managers and employees. In many cases, the process may even be perceived as unfair and tainted with bias.

While it may be challenging to completely eliminate these pain points, we must acknowledge that every aspect of work, including the entire HR value chain, is being disrupted or will eventually be disrupted given the recent COVID-19 pandemic-inspired disruptions, fast-paced technology proliferation, and the dynamically changing world of work. As such, this is an auspicious time that creates an opportunity for companies to reevaluate and make necessary readjustments to their performance assessment process to ensure it is still relevant and purpose-fit to drive the desired business outcomes and promote a positive employee experience.

In the new and emerging work paradigm, work and the way work is done will change – hybrid working will become the norm with technology platforms driving collaboration. Benefits models and elements will change – employee wellness/mental health and child/dependent care related issues will become primary considerations. Team formations and dynamics will change – distributed teams will become prevalent; digital visibility will compete with physical visibility. Skillsets required for performance by both managers and employees will change – technology fluency, adaptability, resilience, critical thinking will become premium, and employee wellbeing will become a priority.  In fact, what constitutes work deliverables and how it is measured will significantly change with more focus on work output rather than place and time spent doing work and all the attendant niceties. Amid this wholesale change, the critical question is – will the current ‘performance assessment process’ still deliver on expected results? Very doubtful! Therefore, it follows that the way we measure and assess employees’ performance should change if companies must achieve their desired results.

In my previous places of employment, the performance assessment exercise took about five months every year – from obtaining employees’ input, preparing managers and the entire workforce, conducting the assessment sessions, finalizing and sharing the results with managers, and then providing feedback to the employees. In essence, so many workhours and emotions are expended on this exercise. The question to ask at this point is – can it be done differently? In my view, I will say Yes.

The performance assessment for most companies is conducted at the end of a performance cycle (annually). The outcomes are lagging indicators of performance that do not necessarily provide the employees with the instant activity-related feedback and coaching necessary to drive performance improvement. While periodic feedback mechanisms may have been inculcated into these processes in some companies, their effectiveness remains questionable. Broadly speaking, companies conduct performance assessment for the following reasons:

• to provide feedback to employees on their performance, highlighting their strengths and development opportunities;
• to have a basis for driving productivity and behavior change; and
• to obtain data for management action on salary, training, and future job assignments.

Taking into cognizance the above objectives, while also factoring in the changes that have now significantly impacted the world of work, companies need to consider the below points as they evolve a new future-fit performance assessment system:

• Technology: Companies should leverage technology and the emerging Artificial Intelligence (AI) to access and collate real-time performance data (for targeted and prompt feedback, coaching/mentoring to drive performance improvement and other developmental opportunities); simplify the assessment process; make it more administratively friendly to both managers and employees. This will further minimize potential biases and improve transparency. With the ease of technology, it may be worth considering a process in which employees’ activities/tasks are assessed individually in real-time and the results aggregated across the board to obtain an average assessment rating if required.

• Diversity and Distributed Teams: Work is becoming more hybrid and distributed, the diversity of our workforce is expanding, and employees’ expectations are evolving with the demand for more control, autonomy, and flexibility. In designing a performance assessment system, companies need to take these changing dynamics into consideration to ensure an assessment process that recognizes the increasing scope of diversity (without any form of discrimination), emerging skills, and the changing dynamics in employees expectations so that a purpose-fit assessment process is developed; one that will measure the relevant dimensions required to achieve the desired business outcomes and employee experience. Having a performance assessment process that is perceived as creating division and tossing employees against each other rather than recognizing these diversities and pulling employees together to drive teamwork and deliver excellent work output is unlikely to stand the test of the new wave of work.

• Physical Visibility versus Digital Visibility and Availability: For many organizations, physical visibility plays a significant role in influencing performance perception in their current performance assessment process. As an employee then, I was told that visibility is critical, so I must put in the effort to accentuate my visibility if I must do well and advance in the organization. This paradigm of focusing on physical visibility and allowing same to impact performance assessment has to shift as digital visibility and availability become more relevant. Hence, the focus should be on work output, value creation, and behaviors that drive productivity and employees’ wellbeing.

Whatever model of the performance assessment system that a company adopts, considering the above recommendations, will assist in delivering a system that is purpose and future-fit and ultimately positions the company for success in the emerging world of work.