According to a recent survey conducted by Adobe, 58 percent of people feel that performance reviews “are a needless Human Resources (HR) requirement.” Adobe, in fact, no longer has an annual performance review process and instead, has adopted an approach involving ongoing discussions between managers and employees that emphasize talent development and future productivity instead of formal ratings and rankings based on past performance.
Still, the vast majority of companies continue to persist with a backwards-looking evaluation process that is time-consuming for managers, demotivating for employees and of negligible benefit to the business as a whole. They do this because, as Adobe’s survey respondents suspected, performance reviews are more about “compliance than customer service”.
The Defensive HR Department
Focusing on past performance is an industrial-era hangover from when employees were mainly required to hit targets in easily measurable, repetitive tasks. Though most people’s jobs have evolved to be more complex and creative since then, the process and the tools used to manage their efficacy and performance in those roles have not.
In many respects, HR is still a defensive function whose role is to protect the business from its own employees. This is reflected by HR technology that is built for compliance, rather than helping managers and employees become more productive.
HR’s on-premise or enterprise resource planning systems can track performance reviews to prove a dismissal was not unfair, rank employees to justify compensation distribution and demonstrate effective people management to the board or shareholders. What they can’t do is react positively to the ever-changing demands of the modern business world and help employees and managers meaningfully improve their skills to meet the challenges of tomorrow.
Performance Management is Changing, but HR Tech is Not
These days, a company’s and individual employee’s goals can change dramatically in the time between end of year reviews. Individual roles are more specialized and require frequent skill updates, while cross-functional teams have long since replaced the siloed departments that were standard just 10 years ago. In this environment, HR’s focus on past compliance is detrimental to future development.
Forward-thinking companies are changing the performance process to focus on development and continuous feedback that makes managers and employees more productive and engaged. The success of these trailblazers will encourage other businesses from a wide range of industries to follow suit.
This new model of performance management needs help from technology, but existing HR tech vendors are not keeping up. Their services are so embedded in the world of compliance, they cannot change to support the development needs of managers and employees. Fortunately, the solution already exists.
Creating a Connected System of Productivity
One of the key issues with performance reviews is that so much of the process involves looking back to gather the data. For managers it is a huge time-investment. For employees, end-of-year feedback about an issue that occurred months beforehand is too late to be useful.
The process seems doubly inefficient when you realize that real-time, instantly-actionable performance data is already available in productivity systems like JIRA and Salesforce that are used by different teams. The problem is HR’s defensive mindset has made it difficult to integrate existing internal or ERP systems with these tools.
Dedicated performance management services like Betterworks that connect to both HR systems and the departmental productivity tools can take HR technology out of its silo. This will create a connected system of productivity that uses real-time data alongside transparent and flexible goal-tracking to drive ongoing development conversations between managers and employees.
Putting the Human Back in HR
It is time for HR to evolve from a defensive function to make a positive contribution to key business goals. This demands a shift from a performance review process based on compliance to a human-centered, development-focused experience.
Adopting new performance technology that integrates with widely-used productivity tools is a key step to ensuring everyone from employees to managers to HR can work on what matters most in order to meet today’s goals and tomorrow’s challenges.