Traditional performance management can be traced back to a model of job performance that originated with Frederick Tailor more than a century ago in which work is broken down into discrete tasks to optimize performance and productivity. Taylor’s “scientific management” model assumes that job performance follows the normal distribution, meaning that the performance of most employees clusters around the average with a smaller number performing at the top and bottom of the distribution.
In the last several decades the nature of work has gone major change.
In the last several decades the nature of work has gone major change. At one end of the spectrum, many jobs have evolved to require greater expertise, more judgment, better problem solving and increased responsibility. There is an emerging recognition that performance at this end of the job spectrum may not always be normally distributed so that a relatively small proportion of high performers are responsible for a high proportion of output.6
Where performance is described by such a Pareto distribution, trying to make fine gradations of employees in the middle of performance is a waste of effort.
More recently at the other end of the spectrum many jobs have become tethered to a live digital platform that closely regulates employee activities, monitors performance, and provides feedback and motivational communication on a continual basis. Such “platform-mediated work” is becoming a central feature where work is managed by computer, such as in transportation, financial services and call centers.
This divergence in the nature of work more than ever supports the notion of strategic performance management, i.e., that performance management must be tailored to particular jobs and organizational environments. For example, companies like Google7 are focusing more identifying and rewarding the top performers rather than distinguishing between performers in the middle of the distribution.
Another major change in the workplace is technological, with a vast increase in the volume of data available to track employee performance in real-time.
Another major change in the workplace is technological, with a vast increase in the volume of data available to track employee performance in real-time. Performance management is becoming more analytical and driven by real-time data, with numerous potential benefits such as less forms and bureaucracy, the ease of multi-source input and flexibility in goal setting, reduced bias, greater legal defensibility and more targeted employee development.
Concurrent with the growing ease with which the work process can be monitored technologically, the ratio of employee to managers has doubled in recent years, according to the CEB8.
Millennials in particular, used to continuous feedback from on-line sources such as social media and consumer ratings, find traditional performance management unhelpful.
Overlaid on top of all of these changes the workforce itself has been evolving in the last decades with one major change being the ubiquitous penetration of digital technology into all aspects of life. Millennials in particular, used to continuous feedback from on-line sources such as social media and consumer ratings, find traditional performance management unhelpful. They not only expect ongoing feedback on the job, but have an urge to control and organize their work based on feedback.
….continued in Performance Management 2018: Where Do We Go From Here?
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6. Ahead of the curve: The future of performance management, Boris Ewenstein, Bryan Hancock and Asmus Komm, McKinsey Quarterly May 2016.
7. Performance management – success stories from Adobe & GE, Keka, Bhaswati Bhattacharyya Jan 29, 2017.
8. Why big business is falling out of love with the annual performance review, Washington Post, Lillian Cunningham and Jena McGregor, August 17, 2015.