Why Next Generation Performance Management Is the Way of the Future

March 1, 2016

Why Next Generation Performance Management Is the Way of the Future

This is the first in a four-part series for HR People + Strategy on next generation performance management. Throughout this series we will explore ongoing performance management in detail, as well as how to train managers on feedback and coaching and how to leverage information from regular one-on-ones during annual reviews.

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Performance management is undergoing a profound change, with more businesses shifting from yearly appraisals to monitoring and evaluating employee performance on an ongoing basis—something we call "next generation performance management." 

Yet some leaders, managers and employees are still asking why they need to change their organizational environment. After all, performance management has centered around annual performance appraisals for decades.

As the saying goes, "If it ain't broke, don't fix it."

The Reality of Today's Workplace

However, statistics show that the annual performance review process is broken, or at least unable to help organizations leverage their greatest assettheir talentto stay competitive and profitable in today's fast-paced work environment.

Maximizing the potential of your organization's talent has never been more difficult. Here are three of the biggest challenges today's organizations face:

  1. Dealing with multiple generations and cultures

    There have never been so many generations working together. Baby Boomers, Generation Xers and Millennials all have different needs and expectations about development, learning on the job, career progression and performance management.

  2. Engaging employees

    A 2015 Gallup Daily U.S. Employee Engagement poll found that only 32 percent of U.S. employees are engaged at work. Another poll revealed that 51 percent of employees polled were looking for another job. Together, these polls paint a bleak picture of employee engagement.

  3. Insufficient access to data to make talent decisions

    Organizations need to be able to quickly access data on hiring, developing, promoting employees, as well as information on why workers leave the organization. Without easy access to this data, HR can't properly create succession plans or learning and development strategies to engage and retain key workers.

How Ongoing Performance Management Can Help

While the challenges are significant, they're not insurmountable. The solution is to shift from thinking of ongoing performance management as separate from your business strategy, to being an integral part of it.

For example, the once-a-year appraisal uses a separate process and creates additional work for managers, employees and HR. If all that extra work is seen as having little impact on performance, your once-a-year appraisals can be seen as a negative, rather than a positive process.

This is where next generation performance management can help. When performance management is fully integrated into your business, it becomes part of a process that is adaptive, not prescriptive, allowing you to quickly align employee commitments to the to your business aspirations, easily assess the impact on business outcomes, and adjust as needed. Rather than a one-time procedure, ongoing performance management becomes more personal, collaborative, and a continuous cycle.

The Role of Technology

While work environments have changed over the past few decades, people processes haven't kept up. Technology can be a great asset for enabling talent management as a regular part of your business rhythm.


HR technology can put the control of everyday talent management processes in the hands of people who lead and actually do the workmanagers and employees. Technology can help ease the administrative burden of performance management, while ensuring that mangers, employees and HR have access to important data on goals, learning and development, and succession planning.


Technology is especially important in supporting the delivery of improved learning and development plans. In the past year, more organizations have started to see the possibilities that technology offers and are taking advantage. Deloitte's 2015 Human Capital Trends study found that employers recognize the importance of updated learning and development strategies. And when you combine ongoing performance management with the right talent management solution, learning plans can be easily identified, created and tracked, and modified at any point.


Future-Proof Your Business


To stay competitive and profitable in today's marketplace, organizations must be agile. To maximize, engage, and develop the skills of a multi-generational workforce, businesses need to take advantage of ongoing performance management processes as well as technology to deliver individualized learning and development plans.


As work environments continue to evolve and develop, organizations must seek ways to simplify but also to optimize how they manage their greatest assettheir people. Next generation performance management has the potential to do just thatto ensure the future success of your organization is fuelled by your greatest asset, your people.


The Authors: 

Dominique Jones is the Chief People Officer at Halogen Software. She provides practical insights that help HR positively impact business performance.