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Performance Management Trends in 2022

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Employee performance management continues to evolve. The ‘Great Resignation’ is affecting organizations in a significant way – managing, developing, and motivating employees through feedback and performance management has become more critical than ever before.

In this article, we discuss some of the major trends we expect in 2022.

performance management trends in 2022

1) More continuous feedback & check-ins

CEB found that 95 percent of managers are dissatisfied with the way their companies conduct performance reviews, and nearly 90 percent of HR leaders say the process doesn’t even yield accurate information. Dissatisfaction in once-a-year reviews stems from multiple factors, including:

  • Millennials & Gen Z – Millennials and Gen Z are now the dominating generations in the workforce. These employees want more feedback and transparency, but only 19% of millennials say they receive routine feedback. An even smaller percentage of millennials (17%) say that the feedback they do receive is meaningful. 60% of Generation Z want multiple check-ins from their manager during the week! While employees of all generations want ongoing feedback, it’s a particularly big focus for these employees – they want to continuously develop and improve. Annual reviews just are not enough.
  • Evolving organizational structures – Many companies no longer operate in the hierarchical structures. Employees are working in multiple roles, across different teams/departments, with several (project) managers throughout the year. This makes it extremely difficult to accurately remember employees’ contribution at the end of the year. We need agile, real-time performance management systems that match the matrix of teams that organizations have.
  • Recency bias – Recency bias is an unconscious bias in which a manager remembers the most recent performance of the employees, negating the full view of the employee’s performance since the last review. This has always been a problem – it is challenging to create an accurate picture of employee performance if managers are only evaluating employees once a year! In this fast-paced world that we’re living in, it has become even more critical that managers support, assess, and document their teams’ performance in real-time.

Many organizations have recognized that traditional performance reviews are not enough, and they have supplemented their annual reviews with frequent check-ins or continuous feedback. It works – companies with regular feedback found their employees 2.7x more engaged at work. We expect that more organizations will follow suit in 2022.

2) Impact of hybrid work

The future of teams is hybrid. In fact, 87% of employees want to work from home at least one day of the week, and 68% of American workers say that working in-office and remotely is the perfect model. As employees want more flexible work options, organizations will continue to prioritize these practices.

With hybrid or remote work, there are fewer organic moments to share feedback with one another – for example, managers cannot simply pull employees aside after a team meeting for quick feedback as easily as before. With everyone being so busy and focused on completing their to-do lists, feedback and development conversations tend to take a back seat in this hybrid and remote world. Organizations need to implement standard processes and tools to encourage developmental conversations and to capture feedback in a seamless way. Establishing clear processes and implementing well-integrated tools (like Pavestep) will be critical.

For more information on managing a hybrid workforce, check out our guidebook on hybrid workforce management.

3) Performance data in all aspects of talent management

Organizations can no longer reliably use their managers’ “gut feelings” and biases to make important talent decisions. Performance data should not be just used for compensation, promotion, and termination – it can unlock all aspects of talent management. This is especially true if you choose to integrate your many data sources using tools like eqtble.com.

For example, one talent management decision that organizations can rely on performance data is reskilling and upskilling. Upskilling refers to learning new skills or enhancing current ones to adapt to changes within a current role, while reskilling refers to learning new skills for a new role. Organizations can use performance data to understand what each employee’s strengths and weaknesses are and ensure that they are providing the right training and tools to help them succeed.

Competition for top talent has always been intense, but it’s more intense than ever before for many of us. If organizations want to stay competitive, they need to make data-driven decisions to optimize their employees’ performance, motivation, and development.

Lastly, one thing worth mentioning is the importance of training new managers. Just because someone is a great individual contributor, it doesn’t mean that they can manage others. Managers and future leaders need to be trained on giving/receiving effective feedback and coaching, among other key skills.

Are there any trends that we missed? Let us know!

If you have questions on employee retention and performance management, we encourage you to reach out to us at hello@pavestep.com!

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