Tech Insights: The Importance of Real Time Performance Management

Sep 2, 2014

Imagine you’re an HR manager.

It’s March. The head of retail operations comes to your office. She says that smart phone sales are going nowhere, so the sales strategy needs to change. She say she’s going to focus on selling 3D printers.

Is your reaction, “OK, but why are you telling me?

Differing views of performance management

HR’s view of performance management is that it is primarily an annual cycle with the most essential element being the appraisal. The head of retail thinks performance management is getting people working on the right things and tracking whether they are getting the right things done.

In retail operation’s view the shift in sales strategy is a performance management issue. Appraisal? Well that’s just administration.

Seen in this light HR’s performance management system is not much more than a necessary evil; and certainly of no use in changing everyone’s goals in real time. So HR has a big problem (the performance management system doesn’t add a lot of value) or a big opportunity (the head of retail desperately needs help realigning everyone’s goals).

Yes, this begins with the familiar idea of cascading goals, so let’s be clear what cascading and aligning goals are really all about.

What performance management systems should do

Go into any large unit and you will find two or three groups working on exactly the same problem unaware of each other’s existence. You will find people working on projects that have been long since been cancelled. You’ll find people carrying on with business as usual with no sense of how they are expected to respond to a radical shift in priorities.

Performance management processes should help us fix that, but very few do. It’s just not on the agenda of what HR expects from performance management. Those systems are focused on an annual process, not real time management.

Credit for these ideas goes to Andre Lavoie, CEO of Clear Company. In earlier roles, he experienced the challenges of cascading, aligning and tracking goals in real time (and unsurprisingly Clear Company’s raison d’etre is real time performance management software). I think he’s hit upon something really interesting in performance management and in HR.

What’s interesting

  • The notion of “real time” is one that is making an appearance in HR software. We saw it in Workforce Planning where managers wanted to know about issues around overtime or absenteeism right now, not a few weeks after month’s end.
  • For any HR process, it’s worth considering what it would mean for it to be “real time.” For performance management it means a system where a leader can easily “pull the strings” on goals across their unit as often as needed, and constantly monitor progress towards those goals.

What’s really important?

  • Dr. John Boudreau has long been arguing that HR needs to evolve towards the idea of “Talentship” where it helps managers make decisions about talent. One route to Talentship may be HR technology, where in its very design, it overturns the deep assumptions about what processes like performance management can do.
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