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Why is the world shifting to an agile performance management system?

28 February, 2022
5 mins

In an increasingly uncertain, volatile, ambiguous, and complex world, the very fundamentals of performance are changing each second. Over the past few years, incalculable reputable organizations have bid adieu to traditional performance management in favor of a more agile process. An agile performance management framework plugs the holes that existed in traditional performance management. It took what didn’t work well, fixed it, and then supercharged it. How? Stay tuned until the end to find out everything about this modern and agile framework that serves as a springboard for the organizations aiming for success!

The annual performance management system is now viewed by the organization as a process that is demotivating, disengaging, and time-consuming. It doesn’t come as much of a surprise that both employees and the leaders have been frustrated with the old and rigid performance review process for decades. Plenty of reasons have been given by both the employer and employees, but a viable alternative has been a long time coming. The growing disconnect in engaging agility and the gap between the performance management process and the business outcome has aggravated this need for change. This is the reason that it is more than safe to declare that an agile performance management system is not just a fag or a mere buzzword. From the last decade, organizations began to realize that the traditional sit-down performance management system was broken. Cut down to the year 2020, it’s completely demolished and hence binned by organizations of all sizes and industries. How can a review done in December, based on a 12-moth old job role, possibly do justice to the challenges that your employees overcame?

The message is clear – it is the era to redefine your performance management and make it more agile and human-oriented. Your organization now operates in the new world of work that is more social,

performance management system

Source: Unsplash

collaborative, and fast-moving. In a time when communication is meant to be instant, the once in a year done methodology just won’t cut it anymore. Enriched roles with increased responsibilities, new employment models, collaborative ways of working, and new-age skills are a reality that demands a more attuned performance management paradigm. No wonder, the agile performance management program is labeled as the successor to performance management.

What is an agile performance management program?

The term agile refers to adaptability, flexibility, and ease of change – everything that your organization needs to survive and grow in the ever-changing working environment. Adopting this approach will help you in motivating employee performance, nurturing employee development, and aligning these two objectives under organizational and team objectives. It enables your organization to focus more on collaboration to meet the desired outcomes rather than hierarchy. Rather than being concerned with appraising performance, your organization starts to focus on the process as much as the end goal.

The agile performance management system focuses on the frequent measurement, continuous feedback of the performance, and incremental improvement during the year as opposed to annual/bi-annual appraisals and feedback cycles. Initiatedited by establishing Objectives and Key Results (OKRs), it revolves around continuous check-ins that occur on a monthly or weekly basis. This continuous communication forms a paramount part as it fosters meaningful relationships, opens up an ongoing dialogue between you and your employees, and draws attention to potential concerns as soon as they pop up and start to hinder productivity.

Therefore, organizations drifting towards an agile performance management framework makes all the sense in the world – it will give your organization an approach that is future-oriented, process-driven, and primed to thrive in the thick of disruptive change and marketplace turmoil. 

Let’s take a look at a few more reasons as to why organizations are shifting to an agile performance management program.

1. The need to integrate with the unique approach of Gen Z-ers

 Gen Z-ers are now taking over the organizations in each industry. Being a new workforce, they need to be provided with a new approach for work and performance evaluation. This workforce is big on regular communication, utilization of technology, and constructive feedback – all of these factors mean that agile practice stands out as the most compatible review structure for the modern workforce. Deloitte US realized that Gen Z is rapidly taking over more job positions in the organization and therefore promptly switched to an agile performance management system. 

2. The need to facilitate employee growth

It’s no secret that agile performance review encourages flexibility. You can fully embrace the idea that your employees could be different in all ramifications and treat them consequently. Once you adopt this approach for your organization, you will no longer have to wait until the following annual reviews for mentioning that your employees are not in line with the organization’s objectives. Instead, it drives you and your employees to make day-to-day improvements for better performance all-around the organization. IBM backs this fact as their employees found this approach more appealing as they now get feedback more frequently and in real-time. No wonder they found their employees to be more productive ever since switching to this approach. 

3. The need to appropriately recognize your hard workers

Agile performance review works to develop a recognition culture, where you recognize and reward your employees for their hard work. As noticed in Google, a clear line is drawn between performance evaluation and compensation. One thing that is common amongst successful organizations is that they are always willing and ready to reward their best performers after each evaluation process. When you compensate your employees, their urge to do more spikes which in turn enhances the overall productivity of your organization. With such a culture, employee engagement and productivity becomes easier to achieve over time. 

In addition to these, an agile performance management process overcomes these flaws:

  • Frequent check-ins enable you to give your employees the feedback they crave.
  • Two-way conversational check-ins promptly push employees in the appropriate direction.
  • Performance reviews no longer compel managers/staff to bear annual appraisals that give “expired” feedback saved up from the start of the year for justifying a rating.

The benefits of the agile approach outweigh the benefits of any other approach. So far, the world has not seen why agile performance management can be classed as ineffective. This is the very reason that organizations left right and center are shifting towards this highly effective approach. So, what are you waiting for? Don’t waste any more time and put your organization at the risk of being left by your competitors. Contact us today for all of your performance management requirements!