There are two main camps in the performance management arena. One favours the traditional system because for some employers it has proven to be time-tested and a true evaluation of their workforce. Managers and supervisors have a basic understanding of how it works, and employees have begrudgingly come to accept it as part of their working life. The traditional camp claims that this type of performance review is useful for keeping employees accountable, rewarding those that excel, and tracking performance over time.

The other side is happy to point out the many flaws of the current process. They claim that performance reviews cause as many problems as they solve and allow managers to cover up their lack of leadership ability as well as hiding poor performers away so that they don’t stick out. Meanwhile, the organization is crumbling underneath them. They want their supervisors to be coaches to propel the best employees forward as well as helping underperforming employees to adapt or leave.

Advantages of agile performance management

The champions of real-time or agile performance management claim that their approach prioritizes employee growth and development. They allow managers and supervisors to focus more on the positive than the negative. The fact that these processes have regular and frequent check-ins means that there are always ‘teachable moments”, and the ability to correct problems mid-stream instead of waiting until the end of the year. It also gives an opportunity for realistic goal setting and tangible measurement of success, in real time. In short, the advantages of agile performance management include better employee engagement and motivation, improved communication, a focus on the future instead of the past and flexibility for managers and supervisors.

Case study GE

In an article in the Harvard Business Review, two senior managers of a subsidiary of giant GE wrote about their experience with GE’s real-time performance development system. This business, the Turbomachinery Solutions unit of GE Oil & Gas has 7,000 employees across three P&Ls, 11 functions, 12 regions, and 15 product lines. What they were finding was that year-end reviews could not give them the collaboration and teamwork across their Engineering, Procurement, and Manufacturing departments. So, they shifted to a real-time performance management system.

The results were dramatic. The business reported a five-fold increase in productivity 12 months after introducing a real-time feedback system. They succeeded in greatly improving collaboration between teams and departments in a company with spread out operations. They noted that it was difficult at first, but over time the teams grew more confident in sharing their ideas with each other and began to trust themselves and the process. For more information about this particular situation you can read the article here:
https://hbr.org/2015/08/ges-real-time-performance-development

Better employee engagement

What GE and many other employers and major companies have found is that agile performance management leads to better employee engagement and motivation. This comes about through a number of factors including more regular communication but also because of the ability to help employees set and achieve personal goals. The increased time spent with employees by their direct supervisors often results in a direct boost to how an employee feels about themselves at work and is a great aid to boost their personal development. Achieving regular goals inspires their confidence and the availability of their management team to give them regular feedback keeps them and their career on track.

Agile performance management helps managers to develop their employees through a variety of means and methods. This could include regular feedback, training or even recognition for their work. This helps good performers to develop into great ones and allows for regular course correction for any employee who goes astray.

Improved communication

In real-time performance management, communications is not just important, it is essential. It is also much different from traditional systems because the communication must be two-way and completely engage and involve the employees. This allows for a clear understanding of the purpose of their work and what is to be achieved. Employees are encouraged to ask questions at any time and to offer suggestions and ideas about improvements on a regular basis.

The side benefits of this improved communication are multiple. They include creating a stronger connection between employees and their managers and more channels for them to converse across. It promotes cooperative working with a renewed emphasis on working within teams and not breaking down in individual and isolated silos. Employees who feel listened to become more loyal and less likely to leave abruptly. That not only increases morale but employee retention rates as well.

Focus on the future

Agile performance management systems are less about the past and more about the future. Yes, poor performance has to be identified and corrected. But that is much easier to do when there is a regular check-in with the employee group. And what’s the point about talking about last year’s bad behaviour or under-performance? It’s a much better way to identify weaknesses and build a plan to turn them into assets in real time, rather than wait until the end of the year.

Then, the discussion between supervisor and employee can focus on how to improve, get better, and build new goals for the future without having to deal with legacy issues or bias from the past. It also lets both parties deal swiftly with issues as they arise and allows for a planned process to move forward in the right direction.

Flexibility

Perhaps more than anything, employees and employers alike both appreciate the flexibility that agile performance management systems provide. This allows them to set their own timetable and schedule and lets them respond quickly to any sudden change or new development. These types of systems can be adapted to meet any workplace from high-tech to manufacturing. They are just as effective for mechanics or engineers or the staff at a catering firm.

Human resource sections love this approach as well. That’s because they can provide support and training to get the system moving and then the managers and employees make it work all on their own. If one particular section, department or supervisor wants or needs additional support, they now have the time to provide it to them. Finally, this flexible approach to performance management gives employees what they really wanted all along, more feedback from their boss. Employees like to know where they stand and the fact that they now have many new openings makes most of them very happy indeed.

Millennials like them

Today’s multigenerational workplace poses some unique challenges for managers. One-sized approaches are not very effective in many areas, perhaps none more so than in performance management. Younger workers, especially millennials need more than a once a year meeting with their supervisor to talk about work. Many millennials just ‘don’t get’ the annual performance review process and would prefer to have an ongoing dialogue with their manager about workplace issues.

That makes an agile performance management system perfect for younger workers. Many of them are seeking instant recognition and feedback that is only possible in real-time processes. They like good reports, but they also don’t mind negative feedback either as long it’s fair. But they do want to be absolutely clear about what is expected from them and how they stack up against those expectations.