Performance Management Tools Confuse Customers With ‘New’ Visions

Performance Management

Providers of performance management solutions are muddying their market’s waters by creating new terms for what they do, confusing customers as they develop new approaches and, at the same time, attempt to reposition PM’s role within the HCM world.

As a result, says a market landscape report from Deloitte, employers are uncertain about whether acquiring new tools will actually improve their approach to providing feedback. It doesn’t help that employees and managers alike are frustrated by the very idea of performance management, which they regard as intrusive, arbitrary and often forced.

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“Regardless of the approach taken, a sense of subjectivity and unfamiliarity pervades the process,” wrote Deloitte’s Kathi Enderes, talent & workforce research leader, and Matthew Shannon, senior research analyst.

Not surprisingly, the idea of performance management comes with a net promoter score of -60, and most approaches have “failed to bolster worker productivity,” Deloitte said. Despite that, strong performance management programs have a notable impact on operations: The financial performance of high-performing PM organizations is 92 times better than that of lower-performing organizations.

And, interestingly, while questions remain about the efficacy of PM technology, there’s no debate that technology in general impacts performance. Tools such as email or calendars can increase agility and leadership development when they’re incorporated into the workflow, Deloitte observed.

For customers, choosing the right performance management solution is as much a cultural issue as a technical one, Deloitte suggests. When selecting a system, organizations must consider how well each option will fit with its overarching performance strategy, and how well its technology can be incorporated into the company’s workflows.

In addition, customers should examine how well each product under consideration addresses what Deloitte calls the three “essential” performance management activities: goal management, multisource feedback and performance evaluations.

Recasting ‘Performance Management’

It’s striking that many vendors, in trying to recast the very idea of performance management, seek to use “soft” approaches, such as linking performance management to engagement, to more nuts-and-bolts features involving data and analytics.

In October 2018, performance management software provider Lattice introduced its Engagement module, and said it had become the first HR tech vendor to combine performance and engagement into a single system. At the time, CEO Jack Altman told the HCM Technology Report that the two areas are inextricably linked. Higher performance, he said, leads to feelings of higher engagement.

“I think a missing link with employee engagement has been connecting it back to performance,” Altman said at the time.

In addition, employers have become increasingly focused on recruiting and retention, to the point where the idea of “experience” looms over everything they do. It’s not surprising, then, that some PM solutions go out of their way to position themselves as engagement and experience tools. More than a few focus their marketing messages on the employee-experience impact, as opposed to the operational or financial benefits that can result from effective performance programs.

Sharing a similar dynamic is learning: More HR commentators and tech vendors position learning within the context of employee-experience and engagement. We can’t help but believe such thinking will change as the labor market begins to loosen up.

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