When Cohen & Jenkins wrote their book “Abolishing Performance Appraisals” in 2000, people thought it was provocative, but it wasn't perceived to be very relevant because most of the companies in the book were not representative of large, for-profit, publicly held companies.  People thought real innovation in performance management was not possible because of how it was so closely intertwined with other HR processes.  Although people haven't been satisfied with the performance management process for a long time, without a viable alternative companies haven't changed course.

 This issue has gotten a lot of press lately because traditional performance management processes have been cited as stifling innovation and collaboration (Vanity Fair, August 2012) and the latest research from Neuroscience indicates that this process invokes our fight or flight response because it is perceived as a threat.  As a consequence employees do not effectively listen and are unable to engage in productive conversations. So the question gets raised, how effective is this process? 

Beginning in about 2008 publicly held companies began to innovate around performance management and these companies (Juniper Networks, Kelly Services) have received a great deal of press and interest from the HR community.

While the most radical changes to performance management have involved the elimination of performance ratings, other innovations include the integration of social technologies into the process. These technologies  ensure that feedback is ongoing and that others besides the manager can give input about performance. They also provide a platform for clearly showing the progress made towards goals and for publicly recognizing extraordinary work.

Organizations gather a variety of data from their employees (both structured and unstructured) and our ability to mine this data to create insight that will drive business performance is just starting to happen.  Workforce analytics is an entirely new field in HR that has yet to realize its true potential. The supply and demand for individuals with data analytics skills is on the rise. 

The reasons for an increased focus on internal talent development are numerous:

• As businesses struggle to fill positions at all levels of the organization they are putting a renewed focus on promoting from within rather than hiring from the outside.
•  As competition for talent heats up, providing developmental experiences is a great retention tool.
• Companies with a reputation for building careers are better able to attract talent.

According to IBM’s Institute for Business Value, a social business uses collaborative tools, social media platforms and supporting practices to engage current and potential employees, customers, business partners and other stakeholders in an ongoing dialogue.  This allows organizations to more effectively share resources, skills and insights within and across work processes and organizational boundaries.

We have moved beyond using social media tools strictly for recruiting and are now seeing these types of tools used to foster collaboration, share information, quickly identify people with the knowledge/skills needed for projects, provide real time recognition and much more.  Social media tools enable organizations to be more agile and responsive and to connect people for dialogue that improves the overall company performance.

“Simplify” and “iterate” are the words of the day.  Companies have lost patience with long complicated HR processes and are now seeking to make things faster and easier.  From One Page Talent Management to the adoption of practices from agile software development, we are seeing more and more companies saying “get something out there that we can try, and then rework it based on feedback and experience.”  The days of taking a year to roll out a new HR program are over.

Employee satisfaction surveys have given way to measurements of employee engagement.  Employee engagement is often defined as the willingness and desire to help the company be successful. It goes beyond being satisfied to being emotionally connected in a way that drives an employee to give their time, creativity, and passion at work.  

Engaging an employee is only the first step.  Once a company has a baseline, it then needs to develop talent management programs to increase the levels of engagement.  

Recent research by Towers Perrin (2012 Global Workforce Study) indicated that the most critical factors in attracting and retaining talent (the same factors that drive sustainable engagement) include:

• Competitive pay
• Career advancement opportunities
• Relationship with manager
• Learning ND development opportunities
• Confidence in leadership
• Ability to manage work-related stress.