5 Performance Management Trends to Expect in 2021

Performance management was undergoing a slow transition before everyone started working from home. Then, several new factors came into play, including employees’ ability to work fixed hours and their own well-being, among other things. What will it look like in 2021 and beyond?

2021 now presents a new opportunity to overhaul performance management – to implement it for value rather than based on hardcore, set-in-stone metrics. What counts for good performance has not changed – drive, initiative, and goal achievement still matter. But the circumstances in which these parameters are measured have changed, as have their methods.

Recent research from Brandon Hall GroupOpens a new window (email required) finds that the pandemic has shifted performance management’s focus from performance evaluations to manager-employee interactions. “The top focuses now and in the next 1-2 years, according to our 2020 research, are the frequency and quality of manager-employee check-ins and linking competency and skills to the performance management process,” the report says.

This is the start of the overhaul performance management needs. What will it look like in 2021 and beyond?

5 Aspects of Performance Management in 2021

How does performance management affect a business? According to the Brandon Hall report, only 28% of respondents said that performance management positively impacts business indicators. There is much more potential for growth in this area. And according to the report, the following five trends are priorities for managers in 2021.

1. 1. Quality of manager check-in interactions with employees to provide feedback/coaching (65%)
   2. Frequency of manager check-ins, interactions with employees to provide feedback/coaching (61%)
   3. Competency and skills development linkage (61%)
   4. Goal-setting process (59%)
   5. Build a performance culture (53%)

Performance management impacted customer satisfaction the most, with 47% reporting so, followed by financial growth (36%) and employee development (33%).

The trend is evident. Manager development will drive employee performance management as we advance. Here are five changes to expect in 2021.

1. The agile goal will be the only goal worth pursuing

“Agile” has been a keyword this year – from business to employees, to learning and development goals, and performance measurement and management as well.

“Much like employees have come to expect more flexibility in the workplace, performance goals must adapt too,” says Sam NaficyOpens a new window , CEO of productivity intelligence software ProdoscoreOpens a new window . And these goals require change as market conditions and global events dictate how businesses adapt.

“Successful employees are more prepared for the unknown, ready to shift focus on the fly, and understand that goals change. So, we need to shift our mindset with performance management as well. One idea for organizations to consider as we embrace a more flexible environment is to forego annual reviews and consider ongoing and consistent feedback instead,” suggests Naficy.

Replacing the annual review is another argument that has been in deliberation for a while. Consistent and continuous performance management is the only way to manage performance when entire teams are distributed. And this requires cultural change across the organization.

Learn More: How to Phase Out the Annual Performance Review (And What to Do Instead)

2. Check-ins will take on a whole new meaning as employees go permanently remote

In keeping with continuous performance management, regular check-ins will become a permanent trend in the future. This can be challenging – because daily/weekly check-ins can seem like an affront to employees who don’t feel trusted. But that’s where training comes in.

“Great leaders take the time to get to know their employees – developing genuine connections, offering continuous feedback, and providing an open line of communication to every member of the team,” says Naficy.

In the Brandon Hall survey, 6 in 10 organizations said that the impact of manager check-ins on overall performance evaluation is high. However, only 9% of managers discuss career development with employees when career advancement is most important for employees.

“Productivity intelligence tools make it easy to understand engagement,” suggests Naficy. “With this data, managers can find opportunities for coaching, better understand the behaviors that lead to success and work to replicate them and identify at-risk employees and improve retention.”

The data shows a considerable gap in employee expectations and what managers can deliver. Training for managers on managing performance in a remote environment can be one way to help.

3. Performance management tech will have to account for rater bias

In a surveyOpens a new window by productivity and engagement platform Reflektive (email required), 63% of those surveyed said employee performance data is not comprehensive enough to make accurate assessments about employee performance.

In the Brandon Hall survey, addressing rater bias was a priority only for 31% of respondents. Some of the challenges that create rater bias could be getting ratings only from managers when peer-to-peer feedback would add a more balanced dimension to the rating. Another aspect is not getting enough training to provide unbiased ratings. With little visibility into how employees work from home, managers with pre-existing biases could easily extrapolate and provide negative ratings.

While performance management technology can help eliminate bias greatly, it requires optimal and effective use by leadership. This primer by DeloitteOpens a new window outlines what leaders can do to eliminate performance management bias going forward: embrace new technology and build the analytical skills needed to decipher performance trends and use technology to nudge users about potential bias or possible differences in bias given to different groups of employees.

4. The metrics of good performance have changed

Outcome-focused goals are likely better measures of performance than output-focused goals. In a remote environment with so many responsibilities, employees likely manage work differently.

Nacify believes that “Metrics for performance management need to consider both output and productivity. Outcomes are certainly critical, but things like initiative and willingness to tackle challenging situations are also important.”

He also recommends considering the quality versus the quantity of work and the efficiency with which the work is done, suggesting that quality be measured via customer satisfaction surveys, analysis of outcomes from projects, and campaigns, and errors/complaints from work produced.

“The most important area to explore regarding quantity is how it affects quality. Some employees can consistently turn out high-quality work while taking on higher quantities of work, while others are better suited to a lighter workload to maintain high-quality work,” adds Naficy.

5. Strategic changes in middle management will directly impact organizational growth

Perfomrance management is closely linked with employee engagement, and Tom Moran, chief strategy officer of Prodoscore, says that middle management layers need to be eliminated for this connection to thrive. “With more permanence in a distributed workplace environment, ensuring long term growth of an organization will be directly intertwined with engaged employees no longer managed in the same ways,” he adds. “There will need to be gross changes to the way that middle management leads respective business sections.”

Learn More: 5 Workplace Trends That Have Set the Tone for 2021 and Beyond

Performance Management Relies on Transparent Communication

Implementing layers of technology to manage performance in a hybrid work environment is a great start. But before that, a culture of open, transparent communication will be critical in maintaining employee performance. Time tracking and screening monitoring will not be effective measures of performance.

“Communication is everything when it comes to performance management. Managers need to work with and inspire employees to grow and develop their skills. Building strong ties that enable that kind of growth is very much based on communication,” says Naficy.

This, along with training managers, will go a long way in helping them succeed and helping employees thrive. “In my opinion, the best way to train managers is to lead by example,” notes Naficy. “If an organization is built on principles that encourage trust, open communication, listening, and building relationships, then managers will learn to incorporate those behaviors into their own management style.”

What performance management trends do you predict for 2021? Share your thoughts with us on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window .