Evolution of Performance Management: From Traditional Methods to Modern Solutions 

Performance management has become a cornerstone of improving employee effectiveness and organizational success. This article explores its evolution, from traditional methods to modern solutions.

In this article, we are going to know the answers to the following questions

1. What is performance management? 

2. Why do we need performance management? 

3. What were the traditional approaches used in the industry?

4. Why was there a need to bring change in performance management techniques?

5. Conclusion.

What is performance management? 

Performance management is a process in which the employer monitors, evaluates, examines and communicates with employees to make sure that their performance is aligning with the companies’ expectations and goals.  

In simpler manner, we can say that it is a process where the manager supervises the overall performance of the employee ensuring that they are efficiently and effectively contributing to the company.  

It is essential to maintain a timely survey and feedback with respect to the performance of the employees as it ensures productivity and the outcome of the results for the organization.  

Why do we need performance management? 

Performance management is built through establishing communication between the manager and employee. The manager should be able to understand what expectations the employee has, and the employee should understand the needs and goals of the company.  

What else do we need performance management for? Let’s see.  

1. Ensures high productivity: Performance management ensures that the team is highly productive. It can help employers to encourage and invigorate the team to bring out their best. Adopting a performance management program can help to reduce stress, distributing workload equally and maintaining a harmonious work environment. 
    

2. Brings transparency: A good performance management system can help the employee and the employer to establish clear and concise communication. This brings transparency to the management, ensuring that organizational goals and the personal goals of employees are being met.  
    

3. Establishing communication: Having a performance management system helps the employer to engage with employees in a timely manner. Conducting weekly meetings and monthly check-ins for the team can help the employer to understand the problems faced by the employees. It establishes a better communication series between them.  
    

4. Increases employee retention rate: When you understand and find out a solution to the problem of employees it encourages a sense of loyalty in them. Managing the performance of employees, maintaining good communication with them and providing them with feedback will persuade the employee to stay in the company for a longer period. This increases your employee retention rate.  
    

5. Helps in personal growth of the employees: Performance management not only helps the manager to know their employee better, but it also ensures the growth of the employee on a personal level. When given feedback the employee understands the areas where they need to improve themselves. This helps them to bring more to the table and become better.  

What were the traditional approaches used in the industry? 

Do you think in this fast-paced world where even the switching on and off light is automated has a space for something that needs too much effort? Sounds horrible, right? 

There were traditional approaches which were used in the business world for performance management.  

Let’s understand this with an example. There is a company called X. The manager of the company does not feel the need to evaluate the performance of the employees on a regular basis, like we do today.  

He thinks that “it’s just a performance measure! Why do we need to focus on this. We have important things to do!”. Now, the performance of the team is a little low after the first quarter. The manager is unable to find the loophole there.  

Do you see the difference? If there was a performance management system with regular communication with his employees, he would have known better where the team is lacking. This shows the need to take up modern techniques of managing the company.  

Let us see the traditional approaches used. 

1. Annual performance reviews: The performance of the employees was reviewed and analyzed yearly. This was the most used approach and the most criticized one.  

2. Rating the performance: Rating the performance of the employee in numerical terms.  

3. Performance based incentives: Employees are given incentives based on their performance. The better you perform, the better incentives you get.  

4. Ranking system: Ranking the employees based on their performance. Higher ranking to the employee who performs better and lower ranking to the employee who does not perform better.  

5. Performance reviews: Taking the review of the performance of the employees from the supervisor.  

Why was there a need to bring change in performance management techniques? 

From the example given in the above section and learning how suffocating those traditional performance management systems were, we now know the answer why we needed to shift to modern approaches.  

Traditional approaches bind the employee with lower self-confidence. They are not able to grow and think through. Thus, comes the modern approaches in the frame.  

We needed a shift to ensure higher productivity and efficiency of the company. It not just included the change in the way managerial processes but also the advancement in technologies, changes in the organization’s structure and increased emphasis on the employee’s overall performance.  

Let us see a few modern approaches that have helped the employers and the employees in many ways. 

1. Continuous communication: Regular communication through weekly or monthly meetings helps the employer to understand the employees’ expectations. They can increase employee satisfaction in a much better way.

2. Feedback and surveys: Taking feedback and surveys from the peers of the employee can help the employer to know the employee better than what they have seen.

3. Technology based systems: Technology is highly effective for modern performance management. Consider using software for collecting feedback, conducting surveys, and engagement with employees.

4. Well-defined goals: A structured and detailed goal description helps the employers to identify the employees who align the best with the goals of the organization. Having a clear goal system helps the employee and employer to know about the expectations of the company.

5. Learning environment: Performance management is not just about measuring the performance of the employee in a modern way but also to create a learning and developing work culture to improve the employee knowledge.  

Conclusion 

Having a proper performance management system brightens the company with greater productivity, higher efficiency and effective outcomes. The employer is responsible for designing a performance management system that yields the desired output for them.   

The 2019 Gartner Performance Management Benchmarking Survey shows 81% of HR leaders planned to make changes to performance management, with 82% saying performance management wasn’t effective at achieving its primary objective, and only 38% saying it kept pace with business needs.   

Maintaining a healthy work culture by keeping the goals of the employee and the organization in mind is important for the employer. The HR leader is the bridge that joins the company and the employees.  

I hope we were able to apprise you with descriptive knowledge about how performance management has evolved so far. We’ll keep bringing in more for you. Till then keep reading, keep thinking and keep HRing!