SHIFTING PARADIGMS in PERFORMANCE MANAGEMENT
People Matters|February 2021
THE WORLD OF WORK HAS CHANGED, SO MUST THE WAY WE MANAGE EMPLOYEE PERFORMANCE AND MEASURE RESULTS
Mastufa Ahmed
It’s always the small pieces that make the big picture. Long before the pandemic, top-notch organizations were already debating the relevance of conventional performance management systems and embracing adaptive approaches that are based on a continuous process with periodic checkpoints to facilitate a transparent and merit-based evaluation of work that is employee-friendly. In fact, successful organizations around the world had steadily started replacing their traditional ranking system with innovative performance management solutions.

COVID-19 has changed everything and we have already seen the rise and acceleration of several new trends on how businesses operate. We have seen organizations remodeling themselves to adapt to the changing landscape with new processes. Organizations are already making adjustments to goal setting and ratings while communicating to their employees that they are valued and important.

Top leaders today agree that the performance management system should be reinvented and recalibrated for better aligned results especially after the COVID-19 crisis. A Gartner poll of HR leaders earlier in 2020 showed that 87 percent of HR leaders were considering changes to performance reviews. HR leaders should focus on how to make performance management more useful this year and in the years to come, the report adds.

Given the current environment, businesses must reinvent how they manage the performance of their employees that triggers the right behaviors in the remote working world, delivers on investment, and develops processes that result in desired business outcomes. HR leaders need to help prioritize what needs to get done. Managers and employees need to be very clear about what's expected because priorities for a lot of companies are shifting. Measuring results is also changing in the remote/hybrid world of work which calls for right tools and processes. It is crucial to be very clear on what metrics, goals, and results are businesscritical. Since everyone works differently, measurement should be done objectively.

So, how should organizations calibrate their productivity and performance yardsticks? What should be the key components of the new framework of continuous assessment at a time when everyone is talking about collaboration, innovation, business impact, client success, and new skills? How should you define and measure productivity amid changing business priorities? Our cover story attempts to throw light on the new paradigms of performance and productivity management in the current reality.

CREATE A PERFORMANCE MANAGEMENT CULTURE THAT IS FLEXIBLE, AND SCALABLE: DELOITTE’S JONATHAN PEARCE

COVID-19 has laid the groundwork for organizations to consider more permanent shifts to remote or hybrid workforces. Organizations will need to update and adapt their policies and practices around talent acquisition, performance management, learning and development, compensation, rewards, etc. to meet the demands of their new workforce models, says Jonathan Pearce of Deloitte

By Mastufa Ahmed

Jonathan Pearce is a Consulting Principal at Deloitte, leading the organization’s Workforce Strategies practice. He has 20 years of experience guiding clients in executing human-centric business transformation, developing talent strategies, and better aligning workforce programs to business priorities. Jonathan advises the C-Suite on large scale initiatives to unlock new enterprise value by reshaping workforces in the context of the Future of Work.

Jonathan leads the development of Deloitte’s partner ecosystem and technology assets to support workforce transformations. Previously, he served as the Chief Strategy Officer for Deloitte Tax where he initiated a program to bring to life the Future of Tax and unlock new business value through harnessing technology and human capabilities in innovative ways.

Jonathan has deep technical experience in workforce mobility from strategy through operations, to risk management and compliance. He frequently presents on the future of workforce mobility in a digitized world.

Here are the excerpts of the interview.

How do you see the longterm impact of the COVID19 pandemic on the future of work with COVID-19 triggering a massive shift in how and where work gets done?

Deloitte’s 2021 Global Human Capital Trends Report identified five trends to watch for in 2021 and the first among those is an increased focus on wellbeing. Recognizing the inextricable link among wellbeing, work, and our lives has led more organizations to think deeply about ways they can design well-being into work. COVID-19 has laid the groundwork for organizations to consider more permanent shifts to remote or hybrid workforces. Within that context, there will be an increased focus on wellbeing demonstrated by shifts in digital and physical workplaces. Organizations are investing in new technology to enable seamless collaboration across their remote, hybrid, and on-premise workers. Through all of this, organizations will need to update and adapt their policies and practices around talent acquisition, performance management, learning and development, compensation, rewards, etc. to meet the demands of their new workforce models.

Has COVID-19 crisis transformed the role of HR? How are global talent leaders envisioning their role to adapt to changing times?

The COVID-19 pandemic has created an unprecedented opportunity for HR to shape the way their enterprise competes, accesses talent, and shows up in the communities where they operate. To authentically lead, HR leaders need to reimagine their role, the outcomes they deliver, and how they operate by:

• Sensing the community, market, and their workforce to shift to be a social enterprise.

• Driving record speed innovation and agility through workforce development

• Extending the enterprise with a partnership ecosystem.

• Owning a complete and accurate view of “all-in” labor cost for the total workforce

• Orchestrating the workforce experience to be inclusive of all talent and invigorate teaming and productivity.

• Forecasting new and future capabilities and enabling continuous learning.

• Reimagining work across the enterprise and in HR with digitalization and automation.

• Leaping to a fit-for-purpose HR Operating Model to suit the enterprise.

• Advancing the workplace to enable workforce collaboration.

How do you see the impact of COVID-19 on performance assessment and productivity management? Are organizations shifting the needle on performance management amid this uncertainty?

The societal disruption of 2020 has brought about new and complex challenges for performance management, which necessitate a more flexible ongoing approach to meet organizational and individual needs. The challenge is what was visible in terms of performance and productivity (eg. seeing someone in the workplace) has become invisible. The answer is in doubling down on a pre-COVID-19 trend of making sure performance and productivity measures are focused on outcomes, not inputs. The new business and social imperative is to create and maintain a performance management culture that is ongoing, flexible, and scalable, as well as ensures the right performance measures and methods of evaluation are being used to help individuals grow while doing meaningful work. Organizations are actively rethinking their measures of ‘productivity’ and ‘performance’ in light of COVID-19 and refining their performance assessment practices including but not limited to more agile goal setting, more real time assessments, and checking in vs. checking up on employees to create a healthy nurturing employee experience proven to improve business outcomes.

Is this the right time and an opportunity for managers to revisit objectives or goals that might need to be adjusted in light of COVID-19? How should they do it? Because there is no proven methodology to get it right in the existing circumstances?

COVID-19 has fundamentally altered the way in which many organizations think about goals. The biggest shift we have seen has been in organizations tasking teams and individuals to focus on what matters most. There has been a concerted effort to set, measure, and reward only the most essential of priorities during this time of disruption.

Our research points to several practices that have always been critical factors in a successful performance management design, but that have become even more critical in promoting alignment and productivity in a time of uncertainty, distance, and change.

• Establish a more agile approach to goal setting with the opportunity to revise goals in response to changing business needs.

• Integrate more transparency into goals—and their progress—within and across teams to mitigate potential overlap and to support one another in achieving goals.

• Recognize and reward contributions towards agreed upon goals as a means of celebrating contribution and impact.

How can companies commit to a continuous feedback culture and have clarity between assessment and development?

Companies can commit to a continuous feedback culture in the following ways:

• Clearly communicate the benefits of continuous coaching and feedback to all leaders in the organization. Can boost employees’ performance by as much as 27percent, increase their intent to stay by 25 percent or more, and increase their effort on the job by at 18 percent.

• Implement ongoing checkins between managers and employees.

• Frame coaching as part of every manager’s primary responsibilities.

• Train managers to develop key coaching skills.

• Share ongoing success stories.

• Measure impacts of performance, engagement, and retention.

• Measure and reward managers on the effectiveness of their coaching and feedback through upward feedback from direct reports.

Create clarity between assessment and development by clearly defining the performance dimensions that employees will be measured on and communicating what is expected in their role. Clearly define and communicate growth and development areas as nonevaluative and not tied to assessment or compensation.

Beyond traditional performance parameters, employees today are contributing to organizations in ways including voluntary contributions beyond what their role demands of them. What’s your take on this?

Organizations have moved to more data-driven approaches to assess performance by evaluating multiple dimensions of performance, including contributions beyond what the role demands. While meeting job requirements and demonstrating critical skills and capabilities is primary, organizations are also looking to uncover how individuals are teaming and communicating with one another, supporting others’ growth and development, promoting inclusive teams, and making voluntary contributions beyond what their role demands. Organizations are creating opportunity marketplaces inside the organization via technology platforms that create a database of internal “gigs” and let workers extend their impact.

In order to capture the impact, many organizations are implementing new forms of assessment—to create space for an individual’s contribution in areas like community and culture building, people development, recruiting, business development, or diversity, equity, and inclusion. Deloitte supports this move to more holistically measuring an individual’s impact and contribution.

How should you measure employee performance for different types of workers? Can they have a unified system with the same metrics for remote, hybrid, floating, and other types of workers?

Measuring performance is no longer a simple equation of tracking outputs and inputs. Rather, the new unified system of performance measurement requires shifting the focus to defining and generating work outcomes. In this system, it becomes less about the worker type – remote, hybrid, or onsite – and more about understanding the impact of each individual role. For example, an app developer may be measured not by the number of features delivered, but the actual usability of those features to the end-user. Similarly, a Human Resources professional may be measured by improving the workforce experience or satisfaction levels of a benefits program vs. number of programs developed or implemented. By focusing on such outcomes (e.g., enduser utility and/or improved experience), organizations, teams, and individuals can prioritize what’s most important and focus on simple methods of measurement.

Is employee wellness core to productivity and performance?

Incorporating employee wellness (or well-being) into work provides one of the largest opportunities to elevate what we call “the 3 Es”: work effectiveness, work efficiency, and workforce empowerment. Yet, it remains widely untapped. While many employees have experienced increased effectiveness and efficiency during the pandemic, they frequently express that it has come at the cost of wellbeing (distractions/lack of focus, isolation, blurred work/life balance, and increased working hours). This is concerning to many executives, given the longterm implications to health and potential burnout, both of which lead to plummeting performance.

The good news is the wellbeing – performance equation can be balanced by providing clarity and choice. While no easy task, clarity can be achieved in defining team outcomes and setting measurable individual goals. Measuring work effectiveness and work efficiency can be achieved by empowering employees to decide when, where, and how they work so employees can gain the focus, flexibility, and autonomy required to bring their best selves to their work, operate at peak levels, and achieve well-being.

ORGANIZATIONS NEED TO CONTINUE TO EVOLVE PERFORMANCE ASSESSMENT: GITLAB’S JESSICA MITCHELL

Organizations will need to continue to evolve on how they assess performance and productivity especially if they have transitioned from a more conventional workforce to a fully remote workforce during the pandemic, says Jessica Mitchell, Director, HR Business Partner at GitLab, in an interaction with People Matters

By Mastufa Ahmed

Jessica Mitchell is a Director, People Business Partner at GitLab with over 20 years of Human Resources experience. At GitLab, Jessica has supported the Development, Product, and Marketing teams in the People Business Partner function. Prior to GitLab, Jessica has held various HR roles within companies like Marconi, Cisco, and SailPoint Technologies. Jessica is passionate about helping drive solutions that focus on team member engagement, development, and business solutions.

Here are the excerpts of the interview.

With COVID-19 triggering an enormous shift in how and where work gets done, what according to you are the top two trends that will have significant impacts on businesses globally?

REMOTE WORK: Companies will have to embrace and support team members who want to work remotely full-time post-COVID-19. Many team members have learned that they are more productive working remotely while having a positive impact on their personal lives due to less time commuting and the flexible work schedules that improve better quality of life.

GLOBAL COMPENSATION: With the move to having more team members working remotely with many doing a similar role, we will see a shift in paying employees based on location, not role.

GitLab was fully remote even before the pandemic. Is remote work here to stay? Can it help in creating a more sustainable future of work? What have you learned from this pandemic?

Being able to recruit and hire from most countries in the world is a distinct competitive advantage for GitLab. We will judge our impact and legacy on the world by how we influence the proliferation of allremote companies.

We are hopeful that our hiring advantage will diminish over time. This will signal that all-remote is shifting toward being commonplace, with prospective employees having a broader selection of companies who offer such a structure. We believe that a world with more all-remote companies will be a more prosperous one, with opportunities more equally distributed.

We're nearing a tipping point with all-remote. Instead of remote teams having to justify why they do it, it's going to be co-located companies having to justify why they don't.

All-remote work wouldn't be possible without the constant evolution of technology, and the tools that enable this type of work are continuously being developed and improved. We aren't just seeing these impacts for all-remote companies. In fact, in some organizations with large campuses, employees will routinely do video calls instead of spending 10 minutes to go to a different building.

Are organizations shifting the needle on performance assessment and productivity management amid this pandemic? How do you see the current performance management and assessment scenario?

Organizations will need to continue to evolve on how they assess performance and productivity especially if they have transitioned from a more conventional workforce (team members in a corporate office) to a fully remote workforce during the pandemic. Those organizations that do not have a good performance or productivity management system currently in place will struggle to understand and determine how to gauge productivity compared to just the number of hours a team member works. There will also need to be a shift in how managers manage remote teams.

A few of the best practices that GitLab has regarding managing remote teams focus on the following:

• Embracing Total transparency

• Handbook goals and documentation

• Asynchronous work

• Applying iteration to everything

• A company-wide organizational chart

• Focusing on results

To answer the second part of this question, I would point you to the Results section of our handbook and how we discuss GitLab’s value of “measure results not hours.” During these times organizations will need to shift to make sure they are accurately measuring the performance and productivity rather than just the hours worked. This will take managers being engaged and truly understanding the team members’ roles and responsibilities and setting clear documented goals and milestones. Companies are going to have to review their performance review process that is currently in place and make sure that managers are equipped to be able to assess performance and productivity and not just hours clocked.

Has COVID-19 crisis transformed the role of HR? How should HR leaders reimagine their roles for the future of work?

Great question! HR is usually seen as the champion for both the company and the team members. I think HR leaders need to be examples of how remote work and remote leadership actually happen. They can be role models to the company on best practices and also help train and develop the leadership on remote work best practices.

This also allows HR leadership to re-evaluate processes currently in place to determine and identify areas for improved efficiencies and results.

Working remotely for HR can be complicated due to the nature of the role requiring more in-person human interaction. This starts at the beginning with recruiting, interviews, team member compliance, engagement, performance management, etc. This is a great opportunity for HR leaders to lead the entire company with new and exciting ways to work and model that remote work can be possible in all aspects of the company.

How can companies commit to a continuous feedback culture and have clarity between assessment and development?

I believe that our value of Transparency at GitLab drives the cycle for continuous feedback, performance assessments, and development.

We strive at GitLab to be as open and transparent as possible. This means open and transparent guidance for giving feedback, delivering performance assessments, and talking development with team members.

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