The document discusses the arrival of continuous performance management and whether organizations are ready for it. It outlines factors disrupting organizations like demographic shifts, digital technology, and accelerated rate of change. A new social contract between companies and workers is emerging where younger workers demand rapid career growth and flexibility. Continuous performance management replaces annual reviews with continuous check-ins, transparent goals, feedback, and regular evaluation integrated into daily work. It shifts control from managers to teams and uses data instead of subjective assessments. Organizations must invest in training managers and change management to successfully adopt continuous performance management.

1. Continuous
Performance
Management Arrives
Are You Ready?
Josh Bersin
Founder, Bersin by Deloitte
Principal, Deloitte Consulting LLP
July, 2017

2. Demographic
upheavals:
Millennials make up
more than half the
workforce, and Boomers
are working into their
70s and 80s.
Digital technology
is everywhere:
Technology is disrupting
business models and
radically changing the
workplace and how
work is done.
Rate of change
has accelerated:
Business must become
more agile to keep
up with the rapid pace
of change.
New social
contract between
companies and workers:
Younger workers demand
rapid career growth,
compelling and flexible
workplace, and a sense
of purpose at work.
Forces Disrupting Organizations Today

3. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
Time
Rateofchange
Technology
change
Business
productivity
Gap in business
performance potential
• Mobile, sensors, AI, cognitive computing, data
• Access to technology by consumers globally
• Technology infiltrates home and political life
What Appears To Be Happening: Growing Productivity Gap

4. Productivity is suffering — is technology helping?
US productivity last ten years
1 billion
smartphones
i-Phone
launched
100 million
Twitter users
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

5. Sources: Deloitte Human Capital Trends 2014 and 2015
The overwhelmed employee
The “average” US worker now
spends 25% of their day
reading or answering emails
Fewer than 16% of companies have
a program to “simplify work” or help
employees deal with stress.
More than 80% of all
companies rate their business
“highly complex” or “complex”
for employees.
The average mobile
phone user checks their
device 150 times a day.
The “average” US worker works
47 hours and 49% work 50 hours
or more per week, with 20% at
60+ hours per week
40% of the US population believes
it is impossible to succeed at work
and have a balanced family life.
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

6. Why skills matter so much
Shift to a service and IP-based economy
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

7. Impact of Robotics and AI on Work
Jobs Shift to Skills Which Are Essentially Human
Source: Talent for survival
Essential skills for humans
working in the machine
age, Deloitte UK 2016
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

8. Shared values and culture
Transparent goals and
projects
Free flow of information
and feedback
People rewarded for
their skills and abilities,
not position
Organizational design
A network of teams
B
A
DCF
A
C D E
B
G
How things were How things “are” How things work
E
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

9. Average
3.2
What are these
companies doing?
Glassdoor ratings of employer recommendations — 200,000+ respondents
Engagement is Critical to Success in Digital Organization
MIT Study:
Among companies in the early stages of digital
development, more than 50% of employees say they
are planning to leave their organizations in less than
three years and over 20% in one year.
At digitally maturing companies, only 25% of
employees expect to leave in the next three years,
and only 4% have plans to leave within a year
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

10. Redefining Performance
The traditional concept of “performance
appraisal” is rapidly going away.

11. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
How We Got Here

12. © 2017, Bersin by Deloitte, Deloitte Consulting LLP

13. What To Do?
Create a new model for “continuous
performance management” which meets the
needs of today’s businesses.

14. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
4. A New Generation of Performance Management Tools
Reinvention of Performance Management Arrives
Then:
The Networked Hierarchy
Now:
Network of Teams
1. Annual cascade/align corporate goals
2. Drive top-down execution thru metrics
3. Evaluate high performers thru ratings
4. Force out low performers
5. Annual pay increase based on rating
6. Create annual development plans
7. Identify HIPOs, leadership candidates
1. Continuous bottoms up goals (OKR)
2. Use quarterly or more check-ins
3. Implement feedback in many ways
4. Use data to measure performance
5. Train and support leaders
6. Review compensation regularly
7. Offer career and development
assignments on regular basis

15. Rethinking “Performance Management” in Digital Organization
Real Time Feedback System
OKR
Goal
Setting
Check-Ins
(1-1’s)
Feedback
Coaching &
Development
Performance
Review
(data)
Bringing it All Together
Periodic
Compensation
Review
Development
Plan &
Activities
Next
Assignments
Strategy and Execution
Day to Day work
Performance Coaching
& Improvement
Quarterly
Business
Reviews
Performance Measurement
and Review
1 2 3 4 5
6 7
Coaching and Development System
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

16. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
The Typical Continuous Performance Management Approach

17. Board of Directors / CEO
Executive Team / Senior Leaders
Business Leaders
Team Managers
Team Leaders
Individual Contributors
The Industrial Age Process: Top Down Cascading Goals
The Old Model of Setting Goals1
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

18. From Cascading Goals to Aligned Goals
The New Model: Local Goals, but Aligned
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

19. Organizations that
revise or review goals
quarterly or more are
3.5 X more likely
to score in the top
quartile of business
performance.
Frequent Goal Review Works
Note: Based on our employee recognition survey, we created a business performance index (BPI1) that averages scores on employee engagement and three business-related outcomes (customer satisfaction, cost structure compared to competitors, and market
leadership position). It then ranks organizations on the scale. Organizations that scored in the top 25 percent of the BPI are considered to have “strong” business outcomes.
16%
44%
21%
10%
9%
3%
24%
26%
31%
50%
No Goal Revision
Once Per Year
Twice Per Year
Quarterly
Monthly
Source: “High-Impact Performance Management Using Goals to Focus the 21st-Century Workforce,” Stacia Sherman Garr / Bersin by Deloitte, December 2014.
Improvement in Performance
Based on Frequency of Goal Review
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

20. Goals Today: Timely, Transparent, Ambitious
Goals
Frequent
Up to Date
Transparent,
Accountable
Ambitious
Stretch
“Teams with specific and ambitious
goals increase achievement from 50%
to 80%, and to 90% with feedback.”
-Don Sull, MIT
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

21. Synchronizing Goals and Key Results: Check-ins and Reviews
Strategy
Management
Operations
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

22. Making Check-Ins Easy
2
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

23. Feedback = Performance at Deloitte
1. I am really enthusiastic about the mission of the firm
2. At work, I clearly know what is expected of me
3. In my team, I am surrounded by people who share my values
4. At work, I have the chance to use my strengths every day
5. My teammates have my back
6. I know I will be recognized for excellent work
7. I have great confidence in the firm’s future
8. In my work, I am always challenged to grow
Bottom Quartile
Middle Quartile
Top Quartile
1
2
3
4
5
6
7
8
4.4
3.2
4.2
4.0
3.8
3.6
3.4
Pulse Survey items
Questions that Predict High Performance at Deloitte
Source: Deloitte pilots FYs14-15.
© 2017, Bersin by Deloitte, Deloitte Consulting LLP
3

24. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
Continuous Development Powers The Digital Organization
9% more likely value company
loyalty and tenure
13% more likely to value
entrepreneurial employees
Well-Established retailers are: Internet-Age retailers are:
Why? Internet-age retailers seek, hire, reward and develop talent based on a very different
set of attributes—more agile behaviors vs. experience-driven behaviors.
Well-established retailers value Experience-Driven Behaviors Internet-Age retailers value Agile Behaviors
24% less likely to invest in
employee learning
4

25. Development is key to Millennial engagement
Employee Development Now the #1 Job Benefit
6%
6%
8%
14%
19%
22%
0% 5% 10% 15% 20% 25%
Greater vacation allowance
Retirement funding
Free private healthcare
Cash bonuses
Flexible working hours
Training and development
Millennials in the workforce
For Millennials, “Training and development” is the most coveted job benefit
Source: KPCB
Percent indicating job benefit in first place
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

26. Explosive Growth In MicroLearning
Micro-Learning Macro-Learning
I need help now. I want to learn something new.
• 2 minutes or less
• Topic or problem based
• Search by asking a question
• Video or text
• Indexed and searchable
• Content rated for quality and utility
• Several hours or days
• Definitions, concepts, principles, and practice
• Exercises graded by others
• People to talk with, learn from
• Coaching and support needed
Is the content useful and accurate? Is the author authoritative and educational?
Videos, articles, code samples, tools Courses, classes, MOOCs, programs
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

27. Learning Key to Digital Success
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

28. Do away with ratings? No – just expand their utility
Juniper Model of Evaluation
Talent
Architecture
5
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

29. 6
Compensation Review: More Data, Better Decisions
© 2017, Bersin by Deloitte, Deloitte Consulting LLP
Adobe performance
management
presentation, delivered
on Bersin by Deloitte
Webinar, 2016

30. Desired capabilities
and experiences
Open positions &
opportunities
New Projects
New Initiatives
Individual
needs/desires
Vision
Strategic
initiatives
Desired
business
outcomes
Values
Mission
Organization
needs
Mobility
Skills
Connections
Strengths
Development
needs
Career
aspirations
Annual goals
Succession
management
Career
development
Development
Plans
Next
Role
Coaching
Strategic
competencies
Workforce
planning
Performance
management
Development
planning
Career and Professional Development
Ongoing Development, Next Role, HIPO7
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

31. Rethinking “Performance Management” in Digital Organization
Real Time Feedback System
OKR
Goal
Setting
Check-Ins
(1-1’s)
Feedback
Coaching &
Development
Performance
Review
(data)
Bringing it All Together
Periodic
Compensation
Review
Development
Plan &
Activities
Next
Assignments
Strategy and Execution
Day to Day work
Performance Coaching
& Improvement
Quarterly
Business
Reviews
Performance Measurement
and Review
1 2 3 4 5
6 7
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

32. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
More To Come: A New Performance Management Landscape
Organizational
Network
Analysis
Internal
Reputation
Networks
Automatic and
Pulse Feedback
tools
Plugins to
Slack,
Workplace,
Teams
Self-
Assessment
and Culture
Tools
Learning
Experience
Platforms
AI-based
coaching and
nudges
Predictive
analytics for
performance
Internal career
networks and
job systems
Scatter plots
replacing 9-box
grids
Redesign of
jobs around
automation,
AI, robotics
Cross-
functional,
multi-
disciplinary
teams
Core of
Continuous
Performance
Management

33. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
What’s Really New? Almost Everything!
The New
World of
Performance
Management
Check-ins
Transparent
Goals
Peer
Feedback
Feedback
to Manager
Engagement
Survey
Individual
Assessment
Team
Assessment
Continuous
Micro-
Learning
Regular
Evaluation
Integrated
into Workflow
Mobile
App
Annual Process Continuous
Manager-Centric Team-Centric
Hierarchical Multi-Directional
Competitive Developmental
Subjective Data-Driven
Secret Transparent
Single Rating Richer Rating
Vendor
A
Vendor
C
Vendor
D
Vendor
E
Vendor
G
Vendor
FVendor
B
Fundamental Changes Are Enormous

34. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
Continuous Performance Management Is Now Proven

35. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
Performance Management Diagnostic Model
Diagnose your current process
and thinking against this model.
Continuous,
Agile
Continuous,
Revised regularly,
Horizontal/vertical
Comprehensive,
Multi-directional
Frequent,
Multi-directional
Context Driven
Traditional Performance
Management
Transitional Performance
Management
Leading Performance
Management
Key

36. What We Have Learned: Four Big Shifts in Thinking
Shift 1: Data
• Higher frequency
• More sources of feedback
• Less bias and higher quality
information
• Increased transparency for
all talent decisions
• Can finally get a sound
sense of skills, capabilities,
and development needs
Shift 2: Control
• Decrease in central control
• Managers shift from “boss”
to “coach”
• Greater autonomy for
managers and individual
direct reports
• Increased responsibilities
for individuals and team
• Everyone has an
opportunity to contribute to
performance conversations
Shift 3: Culture
• Embed performance
activities into the flow of
work, it’s “always on”
• PM redesign more aligned
with corporate culture, not
just “end of year review”
• Drives and forces culture of
feedback and listening
• Forces leaders and
managers to listen better,
and supports more
feedback-rich decisions
Shift 4: Compensation and Rewards
Rewards based on achievements, sound data, flexible in nature, aligned with strategy
© 2017, Bersin by Deloitte, Deloitte Consulting LLP

37. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
Two Top Pitfalls of Moving to Continuous Performance Management
Failing to upskill managers and direct
reports
Failing to adequately invest in change
management efforts
Source: Ongoing Bersin by Deloitte performance management research.

38. © 2017, Bersin by Deloitte, Deloitte Consulting LLP
Continuous Performance Management Is Here