Digital Transformation provides many new capabilities and opportunities for organisations, but rather than redefining classic HR truths, more often than not the hard learned lessons of business continue to apply. This is particularly relevant for Performance Management, but utilising digital capabilities to their full advantage provides a huge opportunity to boost the power of this most fundamental people process.

Good Performance Management systems have a number of common features:

  • Clear goals set at the outset
  • SMART objectives, which are relevant to the business
  • Progress which is measurable and measured
  • Individual performance informed by quality feedback
  • A process which is consistently delivered, by skilled managers
  • And to get maximum benefit, it is supported by a culture of performance throughout the organisation

Capabilities provided by digital technologies, such as social media, mobile, analytics and the cloud make clever automated processes and top notch data more easily available. Digital tools are available to facilitate, record, share, track and evaluate the performance process; reducing speed to administer and driving much greater consistency in delivery. Gamification tools are also available which add game-like mechanics in to processes to incentivise and reward the right adoption behaviours.
This technology is also so much more accessible, in terms of cost and ease of implementation, through web based solutions hosted in the cloud.  This is particularly relevant to SME firms, for whom investment in HR technology may previously have been prohibitory.

And, HR’s dream… data! Digital tools provide more data, in real time, from multiple sources. Getting the right mix and alignment of sources and building a comprehensive information picture can provide massive insight.

Add to this, new expectations:

  • Of employees: to develop, embrace and utilise digital skills and behaviours, new ways of working and new capabilities including analytics. Typified by the “millennials” (also known a Generation Y, those born around 1980) much greater meritocracy in the workplace, and accelerated progression.
  • Of managers: to do their due diligence in using the information available, ensuring it is fair and balanced and making sure goals remain relevant
  • Of peers: to be part of a feedback process which represents a community view, to be included
  • Of HR: that the business own and facilitate the process without direct intervention from HR, and that specific solutions can be made bespoke to certain groups (e.g. sales communities, customer contact teams, business leaders)

Like fresh new ingredients added to a tried and tested recipe, the outcome can be so much better:

  • Clear goals at the outset goals: now mutually agreed, collaborated on, stored in a single place and made visible on a more regular basis; maintaining focus on priorities
  • SMART and relevant to the business – can be made relevant at point in time, easily updated if need be and can be aligned to real time data such as sales or operations data, ad hoc customer feedback or changing business environment
  • Measurable and measured: linked to above in real time, providing a living record of personal achievement over a period
  • Informed by feedback – gathered holistically, easily, for example through online 360 or customer/ peer feedback, built in to the process
  • Consistently delivered process by skilled managers : manual processes become automated, and trackable, becoming easy to process without direct HR intervention. Managers can ask for support and access e-learning at any point in the process

An added benefit is that the digitally enabled performance management process can be used to ablign the organisation by linking data to talent, workforce planning and employee reward systems. 
But how ready are the process owners to embrace the new capabilities and make the benefits become reality? A recent Capgemini Consulting paper on the Digital talent gap, highlighted  the shortage of digital skills in the marketplace, particularly in the analytics arena. For example, over 4.4 million IT jobs will be created, in the UK, around Big Data by 2015; however, only a third of these new jobs will be filled. This issue is also felt keenly in the utilities industry, and nicely summarised in this article. The war for talent really has gone digital, and therefore the magnitude of reskilling for the HR function to gain full advantage from new capabilities should not be underestimated.