Time For A Change!

How well am I doing at work? Is my boss happy? Is he satisfied with my outcome? Will I get a raise? When will I receive a promotion?

Any employee in any organization asks all these questions, and rarely can we find an employee saying, what is my score (1, 2, 3, 4, or 5)? Employees don’t care about their end-of-year score unless this score is directly linked to a bonus or incentive. Employees want more time with their manager - they want to know how well they are doing. They want to know what areas they need to focus on and what their career path in the organization is.

Suppose we look at the traits of our latest Generation (Generation Alpha born 2010 – 2024) who will be graduating soon and entering the labor market. This generation will be the most diverse and educated which will impact the workforce in a positive way. Therefore they need to learn more, and improve their skills rather than get degrees or high scores at the Annual Performance Review. In order to adapt to the needs of this highly tech-savvy generation, we need to start thinking about revolutionizing Performance Management.

It's time to get rid of this boring yearly exercise and come up with an innovative technique to manage and engage our Generation Alpha, who will be considered the future of our organizations. Why not transform the Performance Management concept into making it based on regular conversations and meetings during the year and not only once at the end of the year? During these small regular meetings managers would actually sit with the employee to give developmental feedback on particular competencies that have been observed during the previous period. It is not necessary to cover all competencies since most probably he wouldn’t have observed a certain behavior linked to a certain competency. The idea behind this meeting is to increase employee engagement and make it an opportunity for managers to talk with employees, share opinions, and provide feedback to discuss their development plans and agree on certain focuses or objectives that this employee needs to achieve for the upcoming period. It is not about rating, it is not about monetary incentives or bonuses, it is more about increasing employee engagement and focusing on the personal development of the employee.

I do believe that it is time to change our approach, it is time to shake our current HR practices to match the needs of our upcoming generation. This doesn’t mean that monetary rewards are no longer needed anymore. For sure at the end of the day, monetary rewards are a motivational factor since it spots the lights on achievements, however, in my opinion, what we need to do is to change the perception that Performance Appraisals (salary increases, promotions, or rewards) need to be more related to employee development and engagement.

Many companies have started to redefine companies in the newly called era of “The Great Resignation”, especially in the last two years where we have noticed worldwide lots of resignations mainly due to Covid, some other reasons for “The Great Resignation” would also be employees are either retiring or relocating their jobs or reconsidering their work-life?balance.

Companies like Accenture, for example, have abandoned annual performance reviews and have converted them into ongoing performance discussions between employees and managers. Another company, Deloitte, has canceled the once-a-year review as well as the 360 feedback. Six percent of Fortune 500 companies have gotten rid of rankings as well as the annual performance review.

In the next couple of years, I believe the old practice of annual performance review will disappear, and it will become a necessity for every organization to transform and renew their performance management program, otherwise, the company’s performance will be affected and the number of resignations will increase.