6 Predictions for the Future of Performance Management

In the next evolution of performance management, HR leaders will seek to integrate personal goals, such as wellbeing or acquiring skills not directly related to their work. Fostering an environment in which employees can openly and honestly discuss these personal goals with their managers will include equipping employees with self-assessment tools to evaluate their progress against both personal and professional goals.

No. 2 Performance reviews — and pay decisions — will shift to be project-based 

Many organizations and employees alike have moved toward a project-based work model. Coupled with a rise in the shift to contingent workers, these new work models are influencing many organizations’ postpandemic planning.

In a world of project-based work, employees want leadership to evaluate their performance after each project — and they expect to regularly see the explicit link between evaluations and compensation. For organizations, assessing employee performance regularly allows the making of staffing and resourcing decisions as projects conclude. This shift will:

• provide employees with feedback, evaluation and rewards based on their project-to-project performance.
• evaluate employees based on outcomes achieved and critical feedback from peers and clients.
• clearly define and explain how employees’ performance on each project affects their pay.

No. 3 Performance ratings will reflect more context and empathy

Context affects outcomes, and performance reviews will begin to more accurately reflect that. Did a top-performing employee take on a new-in-kind role on a project to learn new skills? Did an employee find it hard to focus on work because of a personal tragedy? Are teams struggling to achieve their goals due to recurring hiccups in collaboration technology?

Designing more empathetic performance ratings, such as “learning new skills'’ (for the top performer learning new skills in a challenging project) or “focusing outside of work'’ (so an employee facing tough circumstances at home is not penalized) will be especially important to attract and retain high performers looking to grow their career at a given organization. 

No. 4 Feedback and development will become more automated

Employees understand, even better than their managers, the kind of feedback and development support they need to improve their performance, but they often lack the facility to participate actively in the process. 

Many organizations have increased investment in employee-productivity-monitoring technologies, especially in our hybrid world. Automated data collection and analytics around employees activities can be powerful for helping individual employees understand how they are performing and where there is room to improve. In the future, this technology will automate feedback processes and provide timely, data-based feedback to employees.

No. 5 Managers will no longer manage performance 

As the use of technology grows, and employees become more proactive in day-to-day management of their own performance, the focus for managers will turn from performance management conversations to supporting employee career pathing and development. HR leaders will need to equip managers with the resources to nurture talent, tackle challenging work situations and help employees make decisions about their next projects and skills.

No. 6 Team performance management will emerge as a separate focus 

As teams adjust where, when and how they collaborate in hybrid and distributed environments, team performance will emerge as a separate focus. Teams will be asked to more actively work together to track progress against and improve both project-specific performance and team dynamics. Teams will need tools and resources to assess important parts of their health, such as inclusivity, cohesion, accountability and customer centricity, and to diagnose problems.

“Emerging ways of working have made it urgent for performance management practices to transform to become more human,” says Karishma Sahai, Senior Specialist, Gartner. “HR leaders can use these predictions to frame how their organizations think about performance management moving forward.”