With the rise of remote and hybrid work, human resource (HR) leaders must leverage the emerging technology trends and business tools that are reshaping performance management.
Performance management aims to monitor and improve employee performance per business objectives and goals. There are organisational performance management systems, such as:
- The Balanced Scorecard (BSC). You should use leading and lagging indicators to understand whether you’re accomplishing your goals and on the right track to accomplish future goals. 88% of BSC users say it is extremely or very useful in helping them achieve their goals.
- Management by Objectives (MBO). You should create business objectives (usually two to six), which are used as guidelines for creating individual employee objectives.
- Budget-driven business plans. Your budget and spending go to the projects and programs that deliver results. This is a less commonly used performance management system, but it works for some.
In addition, there are personnel performance management systems such as:
- Objectives and Key Results (OKR). Each individual has objectives (usually three to five) and key results that are linked to business goals. This is a hierarchical system, so when employees achieve their objectives, managers should achieve theirs, and so on.
- HR review-driven systems. This framework measures performance-unrelated objectives, such as whether an individual is developing a specific skill or fitting in with a team.
Arijana Koskarova, CEO and founder of Creative Hub, said: “Without having performance management implemented in the organisation, you won’t be able to give clear feedback. Your employees won’t know what is expected from them, how their performance will be measured or what they need to achieve in order to move to the next level.”
HR leaders must adapt their performance management strategies to welcome employee assistance programs (EPAs), artificial intelligence (AI), performance management software, and upskilling and reskilling programs.
Let’s delve deeper into four technology trends reshaping performance management:
Employee Assistant Programs (EAPs)
A third of managers feel out of their depth supporting their team with mental health concerns, highlighting the importance of investing in Employee Assistant Programs (EPAs).
EAPs offer 24/7 confidential counselling and support services for mental health and personal issues. They aim to help employees deal with problems that might negatively impact their work performance or wellbeing.
Here’s why employee wellbeing and mental health are important parts of performance management:
- Burnout and mental health problems affect work performance and employee retention.
- Happy employees are 12% more productive at work than unhappy employees.
- Younger generations, such as Gen Z, value workplaces that promote better mental health.
With almost three-quarters of the workforce expected to work remotely by 2025, businesses should partner with an EAP that has a mobile app or offers online support, such as LifeWorks or AXA Health.
In addition to EPAs, businesses can also introduce:
- Wellness initiatives such as fitness challenges, mindfulness workshops, and healthy eating programs.
- Stress management programs that give employees the techniques and resources to manage stress.
Artificial Intelligence
AI used to be a bit of a buzzword. Now, it is transforming multiple industries and job sectors including performance management.
AI is reshaping the future of performance management because it can gather and analyse vast amounts of helpful data, allowing businesses to gain a deeper understanding of employee performance and engagement.
Here are some of the benefits that AI brings to performance management:
- It improves goal and objective accuracy. AI can flag managers when employees seem overloaded with work and suggest goal adjustments.
- Data can spot things early. AI can spot signs of employee burnout early, which allows for timely interventions to improve wellbeing and retention.
- It helps create personalised employee development plans. AI can recognise each employee’s strengths, weaknesses, and development areas. It can then make personalised goals, learning opportunities, and career paths.
Businesses can enhance their performance management strategies by leveraging AI tools such as Cogito and Humantic AI.
Performance Management Software
Technology is rapidly transforming the world of performance management, making it more efficient and transparent. Manual processes can’t keep up, so dedicated performance management softwares such as BambooHR and Lattice are needed.
Performance management software can streamline goal setting, track progress, provide feedback, and conduct evaluations.
Here are some benefits of using performance management software:
- Automation. Software automates tasks like feedback gathering, goal tracking, and reporting. This saves time and resources.
- Real-time insights. The software gives managers instant access to performance data, allowing them to track an employee’s progress toward goals and identify areas for improvement.
- Improved feedback. The traditional annual performance review is gradually being replaced by continuous feedback. Software facilitates effective communication, fosters two-way feedback, and aligns goals.
- Data-driven decision-making. Software efficiently analyses performance data and can make informed decisions about employee performance and development.
- Everything is in one place. HR managers can use one software and dashboard to track the performance and engagement of all their employees, even those working from home.
Tallys Moreth, HR professional and adjunct professor, said: “When seeking performance management software, it’s essential to view it not just as a product but as a service. Opt for a vendor with a documented history of delivering top-notch software coupled with high customer satisfaction.”
Upskilling and Reskilling
While upskilling and reskilling isn’t exactly a new trend, a recent survey found that 41% of HR leaders plan to invest more in learning and development (L&D). This is to prepare employees for new roles and teach them new skills as technology transforms jobs.
Here are some of the benefits of upskilling and reskilling employees:
- Bridges the skills gap. It prepares employees as rapidly advancing technology reshapes industries and demands new skill sets.
- Increases employee retention. 70% of employees want to leave because they see no future advancement in their current role. Training employees to develop more skills shows commitment to their growth, leading to lower turnover.
- Increases return on investment (ROI). 66% of employers see a return on investment through upskilling and reskilling employees within one year.
- Reduces the need to hire new talent. HR managers and recruiters won’t need to interview and train as many new workers.
Businesses that don’t prioritise upskilling and reskilling in 2024 and beyond risk falling behind their competitors, as their workforce will be unprepared for the demands of future job roles.
Key Takeaways
- Employee Assistance Programs improve performance and retention by taking wellbeing into consideration.
- AI improves goal and objective accuracy, stopping employees for being overloaded with work or missing deadlines.
- Upskilling and reskilling helps employees prepare to perform well in new roles that require new skills.
- Performance management software helps HR managers streamline the process and communicate better, resulting in better performing employees.
In summary, technology plays a massive part in the future of performance management and other business operations. HR managers must ensure their performance management strategy aligns with business goals and prioritises employee development.
Author: Neve Wilkinson – Content writer and outreach specialist, Solvid
Photo credit: Jonathan Borba
