Deloitte’s research paper, published last spring, reveals some staggering numbers: only 8 percent of U.S. companies are satisfied with their performance management process. At the same time, performance management takes too much time in 58 percent of the companies. The figures go hand in hand with the survey results we published in December: there’s something profoundly wrong in the way performance is being managed.
The traditional approach to performance management was invented to fulfill the needs of the industrial society. The focus was at that time on homogeneity and flawlessness, and factory workers were expected to perform monotonic tasks. The production line was always moving: sometimes faster, sometimes slower, but the tasks were always the same. Performance management has evolved since those days, and now performance is being improved by preventing mistakes beforehand.
Nowadays as much as 70 percent of jobs are in the service sector and especially professional services are on the rise. The nature of professional work differs greatly from the traditional production line work. In professional work, employee’s skills, attitude and the ability to empathize are essential to performance as well as teamwork skills. Homogeneity and uniformity can’t be the measures of performance; a different kind of approach is needed, which will take into account the differences between the employees.
In some industries, like software development, the performance level of the top performers can be tenfold compared to the average performer. I believe the reason behind this is that top performers are taken into account very well in the traditional performance management culture. They get rewards, attention and autonomy all at the same time. There’s nothing wrong with this; the problem lies elsewhere.
However, traditional performance management often fails to pay regard to the average employee. This is a huge weakness, as most of the employees naturally are, by definition, average. If the average joe or jane does something a bit better, no one notices. But we should! If we multiply the improvement in performance with the number of average performers, the minor improvement will be a huge deal for the company.
Performance management should be used to make good basic work visible. In my earlier blog posts, I’ve already mentioned limited and unlimited resources. For most companies, money is a limited resource, whereas social recognition and social rewarding are unlimited resources. These tools should be used carefully as well, or the pep talks and praises will turn into bad theatre. Nevertheless, praise should always be given in public. When the average employee sees that her average colleague is being praised, she can identify herself with her coworker. “Even I can do that!” she thinks. When top performers are being rewarded and praised, the average joe can’t find anyone to identify with. This will, on the contrary, decrease his performance level and make him feel depressed.
Gamification is a way to encourage and pay attention to everyone’s individual needs. At Cloudriven, we track performance on a weekly basis and all our important actions are shared with colleagues, who can encourage, comment and give feedback. Usually the work community tends to support those, who are in need of encouragement. When my week hasn’t been that successful, the community has given me their support.
Performance management culture is changing and the traditional performance appraisals are slowly losing their importance. The most essential thing about performance management should be increasing motivation right here and right now. Gamification fits this definition like a glove. Gamification allows us to share unlimited resources easily and automatically, which motivates even the average joes to better results.