Holistic development, not mere ratings

The future of work is not very certain. However, it is believed that the future workforce will be more fluid i.e. contractual and gig. This will catalyse the importance of bringing changes in performance management process. Traditional methods such as annual reviews and goal setting may no longer effectively manage employee performance in a more fluid workforce. Innovation at a fast pace as a source of competitive advantage is leading to continually changing future needs, making the traditional performance management system irrelevant. Organisations have to prepare themselves for reviewing their performance management process because their businesses require change, driven by business needs.

What is required is adaptation to the changing workforce. The rise of artificial intelligence and automation is changing the skills needed for success in the workplace. Assessing and improving employee performance to keep up with the changing workforce will bring challenges to HR professionals. It is not like that the traditional methods do not have challenges. Annual reviews and goal setting have been criticized for being too subjective and ineffective at measuring employee performance in the past and many organisations have brought changes to the process to continuous real-time feedback, collaborative goal setting, more frequent feedback, development plans with employee input, and opportunities for employees to give feedback to their managers.

In the future, organisations may need to move away from ranking and rating to focusing more on teamwork and skill enhancement leading to a possible shift from precise accountability to holistic responsibility towards organisation goals where team performance may be at the center. In many organisations still, performance management is more focused on assessing past performance, but now, looking at future needs it may not work because of the nature of employees' job profiles. It will be more on short cycle, project-based performance and linked salary increase.

Adaptability and flexibility with a focus on skills would be in focus while rolling out changes in the performance management process to meet future needs.

The April edition cover story is an attempt to understand the complexities of future of work and what would possibly be performance management practices to meet the organisations needs and enhance employees' motivational level from HR and management experts.

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