To stay competitive, organisations need to adapt and respond quickly to changing business needs, and to optimise new opportunities. This high level of volatility within the commercial marketplace has resulted in the traditional inflexible yearly goal setting cycle becoming increasingly ineffective.
Performance Management processes at organisations now display clear signs of an increasing agility within the goal setting process, enabling them to better incorporate changing needs. It is increasingly common for goals to be replaced or adjusted during the year if they are no longer deemed relevant to organisational objectives. 94% of participants say they consistently re-align goals during the year in response to changing business needs.
Driving seat
Alongside this we see increasing ownership by the employees of their objectives. No longer are they subjected to a passive and formal process that they feel unable to control or influence, but instead are being put in the ‘driving seat’ for goal setting, which can then be evaluated on a regular basis. Employees were found to be active at consistently providing input for their individual annual goals (92% of participants).
Articulate the wider corporate vision
To enable employees to have greater autonomy in setting their own objectives, they will need to know clearly what is expected of them. To provide this clarity leaders are now, more than ever, required to be able to articulate the wider corporate vision, showing how the work of each employee relates to the company’s overall mission. Employees who understand the bigger picture, and deliver work that meets expectations, will be more engaged, and can find themselves able to operate more independently and effectively.
Learning and improvement process
Employees who are in the ‘driving seat’ tend to be more engaged and committed, and require less guidance when defining goals with their manager, which frees managers to spend greater time growing their groups and also focusing on more strategic activities. Once the benefits to managers and employees are clearly demonstrated, then Performance Management ceases to be an administrative burden and becomes part of a continuous learning and improvement process.
Transparancy
Clearly related to this shift is the increasing transparency of both the employee’s and their managers’ goals. This happens in 89% of the participating companies, with the majority of the Top Employers doing it on a consistent basis. This gives employees a clearer insight into how their contributions impact the bigger picture, and how they relate to those of other employees. Transparency can also provide clarity around individual objectives and priorities.
Motivated employees
One participant, a global professional services firm, has clearly defined responsibilities for employees, supervisors and internal career counsellors to set objectives and assess employee outcomes. Their goal is to develop a culture wherein leaders create and communicate a compelling and inspiring vision to ensure high quality Performance Management, which in turn leads to engaged and motivated employees.
Holistic approach
The move from annual event to continuous appraisal, with the employee taking ownership for their development, is a trend within most Top Employers. One best practice example, from a multinational FMCG business, has a high rating for employees saying that their immediate manager regularly talks to them about their progress and the quality of their work. The business takes a holistic approach to the development plan incorporating personal profile, career development, skills development, as well as current year performance. This gives the employees employees a clear understanding of how their performance is evaluated. Potential is assessed by looking at factors such as judgement, drive and influence. Overall the employees described this business as having ‘an improving performance culture’.
Four key trends
‘Performance culture as a foundation’ is one of the four key trends we have identified in our Performance Management report. These four Key Trends are shaping the future of Performance Management, influencing the approach of many global businesses.
Each trend underlines a growing move towards performance being seen as an on-going process of learning and improvement rather than an annual assessment of an individual’s contribution and progress.
Download the full Performance Management report to learn all about the current trends and how organisations deal with these trends in their business processes.
