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Trends in HR and Payroll Technology – Performance Management is Being Replaced

Trends in HR & Payroll Technology: AI & Automation will become commonplace

Welcome to a series of blogs from Phase 3 discussing the latest trends in HR and Payroll technology. In the first part to this series I wanted to cover “Performance Management – is it being replaced?”.

Managing employee performance is a complex and onerous task for many. In many organsations employees have an annual appraisal, 6 month review and might be rated on a scale of 1 – 5 with 1 being rubbish and 5 being excellent. I remember sitting for hours with a booklet of ‘core competencies’ and having to set objectives that were relevant to the businesses competencies in a previous role – Painful.

Despite being a dread for many managers and employees, it is natural that such a system exists. People are expensive for a business and so need to be managed. Some employees thrive on being managed, and others like the feedback regularly. People also create the value (the commodity) and so should be managed. Finding a system that can reduce cost and increase value is difficult – particularly when people are the subject.

Perhaps the ‘management by objectives’ days are over. Instead many organisations now manage goals and set expectations – this subtle change in language is important. Settings goals for employees regularly means these goals can be smaller, more specific and measurable and therefore at the forefront of the employees mind. Regular check ins with employees are also important to measure progress and to address challenges the employee is facing. Feedback can consist of commentary from the employee, their peers, their manager and even customers.

Many modern solutions (I had the chance to see Intuo recently) include this form of performance approach. Recognition from other employees is also key.
At Phase 3 our performance management process is linked to our Business Plan, which is digested into small 90 day chunks, our performance conversations take place regularly, we use employee pulse surveys to see how people feel about work and use recognition to thank our co-workers publicly.

No matter what form recognition takes, it’s incredibly important for employees to hear that they are valued and why.

Common questions for managers and employers include:
• We want to get a better view of the talent in our organisation
• I want to know how my team is feeling
• I want to know how our employees experience working in our company

This is a step forwards compared to ‘we need to know that every employee has an appraisal’. Modern performance processes include:

1. Regular conversations, recorded through systems and with a ‘webchat’ feel – with the ability to ‘tag’ people into the conversation, linked to a company value

2. Objectives – top down objectives which focus on the long term, with goals being set against the longer term objectives defined

3. Feedback and Praise – from colleagues, managers, peers and customers – visible to self and others in the business

4. Engagement Pulses – short surveys which focus on feelings with a particular focus on the workplace

5. Training – Part of improving performance is training – whether that be for the job you have or the job you want – this doesn’t mean classic classroom training – see training as coaching, mentoring and learning

6. People Analytics – the ability to review performance data and act upon it
The key to performance reviews and discussions are that the employee is appraising the organisation and their part in the organisation as much as they are being appraised for their performance.

Performance related pay is a topic of wild debate too. The key question – should everyone get the same bonus or should the bonus be proportionate to the number of widgets sold, tickets closed or NPS scores? This we will cover in a later part of this series!

This blog series is written by James Proctor, Director of Consulting & Services at Phase 3.

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