Paradigm Shift: How Data and Technology Are Remaking Performance Management

After the COVID-19 pandemic, the performance management process will never be the same. After two years in which companies went remote and digitized at a faster rate than predicted, the old methods won’t cut it.

Traditional performance management emphasizes the oversight of employee metrics to improve productivity, efficiency, and effectiveness. Now that the workforce has changed – touched by the great resignation, the growth of the gig economy, and remote work – new approaches to performance management are both necessary and possible. 

This is where data and technology, the calling cards of the digital transformation, enter the picture. With increased capacity and connectivity, data and technology are breaking down the silos and efficiency gaps that plagued the performance management of the past. In this article, we analyze how the digital transformation has impacted performance management to raise it to a higher level – performance enablement. 

What Is Performance Management?

Performance management deals with techniques, strategies, and technologies for improving workforce performance. Often, these include methods for monitoring productivity and measuring workforce metrics to create changes in performance. Performance management can range from annual performance reviews to tools of performance management in software systems.

Performance management is the process of monitoring, measuring, and evaluating workforce performance against specific goals and objectives. It involves setting clear performance expectations, providing regular feedback and coaching, and addressing performance issues as they arise. The goal of performance management is to ensure that members of the workforce are working towards the organization’s goals and objectives, and that they are meeting the standards and expectations set for them.

For large distributed workforces and sales forces this is more complicated as they don’t have direct managers. For these workforces a different paradigm might be relevant, one that reflects the changing nature of productivity. We will get into that later.

Performance management typically involves a series of activities, including:

1. Setting performance expectations and goals: This involves establishing clear expectations for what workforce members are expected to achieve in their roles, and setting specific, measurable goals for performance.
2. Providing ongoing feedback and coaching: This involves providing regular feedback to the workforce about their performance, and offering coaching and guidance to help them improve. This can be automated or made smart through technology, delivering coaching at the time it is most relevant to the individual.
3. Conducting performance reviews: This involves conducting formal performance evaluations on a regular basis, typically annually or biannually, to assess workforce performance and provide feedback. This isn’t as relevant for distributed or frontline workforces, however.
4. Addressing performance issues: This involves addressing performance issues as they arise, through coaching or training if necessary. This can be automated and facilitated through the use of smart technology.
5. Recognizing and rewarding high performance: This involves recognizing and rewarding employees who demonstrate high levels of performance and achievement.

Overall, performance management is a critical process for organizations to ensure that their workforce members are aligned with the organization’s goals and objectives, and are working towards achieving them.

Why Performance Management Is Important

Performance management has historically been important in measuring, standardizing, and ultimately raising performance metrics. However, this article deals with the question of why performance management might be outmoded. There might be a new paradigm for the performance management process, which we will discuss in detail below.

How Are Data and Technology Involved in Performance Management?

This is a bit of a trick question, in that when data and technology are properly entwined in performance management, performance management itself changes.

However, it’s important to lay out what we mean here. Let’s say you operate a retail space. Traditionally, performance management will show you daily, weekly, and monthly sales numbers broken down by employee or team. Yet having high-tech data analytics software changes the equation, showing you live data while using this data to generate higher performance. 

In other words, previously, tools for performance management had a “static” relationship with the work function, reflecting data that managers could then use to monitor performance. Using richer data and high-powered data analytics to interpret it, technology itself can perform the “manager” role – in a less top-down way. Let’s say Kim works in retail. Instead of a retail manager telling her to improve her performance, her company’s software might send a notification suggesting ways for her to boost her numbers. 

This is not performance management so much as performance enablement. The basic idea is the same – unlocking higher performance – but the method is so different that it’s a different concept altogether. Such technology is using rich data from multiple sources to drive behavior changes that come from the worker herself. That’s a huge evolution.

Is This Really a Paradigm Shift?

A paradigm shift is defined as “an important change that happens when the usual way of thinking about or doing something is replaced by a new or different way.” So, does performance enablement represent a paradigm shift in performance management? 

According to a Gartner report, 81% of HR leaders were making changes to performance management as of 2019, and that’s just in the corporate space.

Distributed workforces like direct selling, retail, and large gig platforms are perhaps even more in need of transformations in performance management, because their workforces tend to need extra motivation (the “voluntary workforce”).

For these folks, performance enablement may indeed represent a fundamental shift in operations. Without getting into too much technical detail, it’s a massive transformation to change from “management” to “enablement.” Management means that you deal with workforce results after the fact, only once they can be measured. You’re always playing catch up. 

The Performance Enablement Vs. Performance Management Difference

Performance enablement means that the workforce has the performance tools they need as the work is being done, not a week or month or a quarter afterward. And these performance tools are personalized for the worker’s individual goals – not management’s ideas about what she should be doing. That way, the performance recommendations that a worker receives matter to her on an individual level. This is a more organic performance management process, one that matters to the individual’s particular goals.

The positive behavior changes are coming from the worker herself, as she moves through her success journey, rather than top-down from management. It’s not so much, “You should have done this to succeed,” as performance management once would state, as “Oh, I need to do this to succeed.”

The difference here is potentially huge. With Rallyware’s Performance Enablement Platform, for instance, we see +25% faster onboarding, +47% workforce engagement, +32% workforce productivity, and similar highly impressive metrics. Rallyware is a uniquely well-designed and high-performing platform, but these numbers are also important for what they show about performance enablement broadly.

When the workforce receives recommendations that matter to them, based on their own goals for success, they’re more likely to transform their behavior. The high-achieving results, cited above for Rallyware customers, bear this out.

To discover the enablement difference, reach out to the market-leading Performance Enablement Platform – and see how performance enablement can drive behavior changes in the workforce and sharp increases in your KPIs. Request a demo today.