We at Grug constantly think about how we can improve the entire process of employee performance management and how we can build kickass products to augment such a modern process. We also try to take our learnings from the waterfall methodology that companies adopt today to manage their employees’ performance.
While there is no single mechanism out there, at a broad level, most companies adopt a methodology that has the following attributes:
Closely tied to rewarding employees monetarily or punishing them
Purely left to the discretion and also the biases of the reporting manager
Happens once a year in a way that is highly prone to recency bias
Even if it happens more, the other instances are not taken as seriously
As a mechanism or cope-out to fit employees into a bell curve or a zero-sum game
Many organizations have tried to improve the process and mitigate its shortcomings but making a few changes like:
360-degree feedback
Having monthly check-ins
Defining clear goals at the start of the year
Revisiting goals mid-year or every quarter
The effectiveness of these mechanisms is highly questionable considering how the annual appraisal cycle is still the time period around which attrition spikes, and how managers still hold the veto power in employee appraisals.
The waterfall methodology of approaching performance management is hurting both employees and organizations alike. Just like we did with software development, Employee Performance Management also needs an Agile approach that is able to adapt and be nimble to the changes in the market and within the company, one that is designed to minimize biases and is tightly wound towards helping employees get better and not just as a carrot or a stick.
Agile Performance management directly addresses the major pitfalls of a traditional performance management process. It takes away the anxiety and paranoia related to performance appraisals and feedback since it happens more often and is more focused on improving the employee rather than judging them. It factors in the highly dynamic nature of work today and eliminates the practice of setting up annual goals which become irrelevant within a quarter of the year. It takes care of the common biases that we find in traditional employee performance processes like the recency effect and any personal biases that the manager/appraiser might have.
The biggest benefit of adopting an agile performance management process aided by the right product like Grug is that it focuses on the process and action all the while mitigating the outsized importance we sometimes give to outcomes that most often than not are highly influenced by external factors like market conditions. It helps companies build a culture that invests and focuses on the process - the winning culture.