Uploaded byJosh Bersin
Continuous Performance Management: How To Make It Work
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.
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Continuous Performance Management: How To Make It Work
- 1. Continuous Performance Management Arrives Are YouReady? Josh Bersin Founder, Bersin by Deloitte Principal, Deloitte Consulting LLP July, 2017
- 2. Demographic upheavals: Millennials make up morethan 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, Bersinby 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 HumanCapital 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 matterso much Shift to a service and IP-based economy © 2017, Bersin by Deloitte, Deloitte Consulting LLP
- 7. Impact of Roboticsand 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 andculture 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 companiesdoing? 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 traditionalconcept of “performance appraisal” is rapidly going away.
- 11. © 2017, Bersinby Deloitte, Deloitte Consulting LLP How We Got Here
- 12. © 2017, Bersinby Deloitte, Deloitte Consulting LLP
- 13. What To Do? Createa new model for “continuous performance management” which meets the needs of today’s businesses.
- 14. © 2017, Bersinby 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, Bersinby 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 Goalsto Aligned Goals The New Model: Local Goals, but Aligned © 2017, Bersin by Deloitte, Deloitte Consulting LLP
- 19. Organizations that revise orreview 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 andKey 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 = Performanceat 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, Bersinby 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 keyto 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 InMicroLearning 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 toDigital Success © 2017, Bersin by Deloitte, Deloitte Consulting LLP
- 28. Do away withratings? No – just expand their utility Juniper Model of Evaluation Talent Architecture 5 © 2017, Bersin by Deloitte, Deloitte Consulting LLP
- 29. 6 Compensation Review: MoreData, 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 Openpositions & 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, Bersinby 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, Bersinby 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, Bersinby Deloitte, Deloitte Consulting LLP Continuous Performance Management Is Now Proven
- 35. © 2017, Bersinby 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 HaveLearned: 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, Bersinby 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, Bersinby Deloitte, Deloitte Consulting LLP Continuous Performance Management Is Here
Editor's Notes
- #9 The findings 92 percent of companies believe that redesigning the organization is important, making it No. 1 in ranked importance among this year’s respondents. Companies are decentralizing authority, moving toward product- and customer-centric organizations, and forming dynamic networks of highly empowered teams that communicate and coordinate activities in unique and powerful ways. Three in four respondents report that they are either currently restructuring their organization or have recently completed the process. Why is this? A new mode of organization—a “network of teams” with a high degree of empowerment, strong communication, and rapid information flow—is now sweeping business and governments around the world. The growth of the Millennial demographic, the diversity of global teams, and the need to innovate and work more closely with customers are driving a new organizational flexibility among high-performing companies. They are operating as a network of teams alongside traditional structures, with people moving from team to team rather than remaining in static formal configurations. Two major factors are driving change. Small teams can deliver results faster, engage people better, and stay closer to their mission. Second, the digital revolution helps teams stay aligned. Today, teams use web or mobile apps to share goals, keep up to date on customer interactions, communicate product quality or brand issues, and build a common culture. What’s needed? The days of the top-down hierarchical organization are slowly coming to an end, but changing the organization chart is only a small part of the transition to the network of teams. Now, more than ever, is the time to challenge traditional organizational structures, empower teams, hold people accountable, and focus on building a culture of shared information, shared vision, and shared direction.
- #24 Key points to highlight: Over the last two years, we have discovered that responses to questions 1, 2, and 4 are the strongest drivers of increasing engagement and performance We have also discovered that if the responses to questions 4 and 8 decline over time, then there is a risk of voluntary attrition for the responder
- #38 Failing to upskill managers and direct reports adequately on the skillsets they need to have more frequent, honest conversations Failing to adequately invest in change management efforts