CHIEF LEARNING OFFICER

September 14, 2022 — Employers have long tried to measure worker performance, from the time-honored practice of performance reviews to the increasingly popular — but increasingly criticized — trend of tracking productivity. But after more than two centuries of investments, research and fine-tuning, performance management remains a source of dissatisfaction and even frustration at many companies.

More than half of respondents to a recent survey conducted by McKinsey and Company say they believe performance management has not had a positive effect on employee or organizational performance.

It’s time for employers to think more holistically about how they measure and encourage success among their workers. Companies can work to gather data on employee attitudes, beliefs, perceptions and motivations, which will provide them with a better understanding of the challenges employers face and what kinds of tools are needed to overcome them. Employers can reimagine measurement not only as a tool for assessing performance and productivity, but also for identifying barriers and providing support.

This shift in employer practices is occurring not a moment too soon. In recent years, the need to rethink on-the-job support and learning and development and benefits has grown all the more important. A tight labor market and an economy that continues to produce record job openings have left employers struggling to find and attract skilled workers.

Meanwhile, the challenges of the COVID-19 pandemic have resulted in 25 percent more workers switching occupations and charting new career paths to new and, in many cases, unfamiliar industries. Now, the national economic outlook is once again clouded by the prospect of a looming recession — and the job losses and economic stress it could bring with it.

At the same time, employees who have for the first time in their careers gotten a taste of remote or hybrid work have developed a deeper sense of appreciation for the delicate balance between their work, family and personal lives.

For all these reasons, companies are feeling a heightened sense of urgency to gain a better understanding of the challenges their employees are facing and how they can best deploy a system of wraparound support. This will first require measuring the many barriers with which today’s workers are grappling.

Many of these measurement tools already exist to some degree — in the world of higher education. Working to address the needs of an increasingly diverse student population, colleges and universities have turned to data analytics to proactively identify trends and challenges, and then make data-informed decisions around the kinds of support they should provide. This support takes the form of an array of student services, including targeted communication and reminders, more robust career development resources and success coaching.

Just as institutions are grappling to better serve a growing number of nontraditional learners, employers must now find ways to support a growing number of workers contending with a growing range of pressures — particularly for individuals from historically excluded or minoritized backgrounds who face additional barriers both in the workplace and beyond.

From busy working parents to young employees finding their way to a career amid the fallout of a pandemic, L&D and talent leaders face the daunting task of identifying the unique challenges facing today’s workers and guiding them toward the right kinds of resources. And, as in higher education, they are finding measurement and success coaching can help.

For example, software giant Adobe scrapped its formal performance review process in favor of regular check-ins designed to foster discussions about expectations, growth and development. The change resulted in improved morale at the company, as well as a 30 percent decrease in employees quitting.

GE replaced its annual performance review with what the company calls “touchpoints.” These are meaningful, forward-focused conversations in which managers coach, rather than simply critique, their workers. The company says the approach, which includes a smartphone app to help facilitate these frequent conversations between employees and managers, provides them with a “much richer set of data regarding an employee’s unique contributions and impact.”

The Ben Hudnall Memorial Trust — a labor union-management partnership which provides career development services and access to education and training programs to more than 50,000 unionized Kaiser Permanente employees — is harnessing the power of assessments to enhance services such as employee coaching and education benefits.

BHMT uses CliftonStrengths to examine an employee’s existing talents to determine how best to develop those talents into strengths. It uses SkillScan’s transferable skill assessment, Drive, to provide workers with a detailed report of their greatest transferable skills, as well as to suggest career and educational options.

Initial research on this approach suggests that it pays dividends for employee success and retention. Research by Indeed revealed that employees at companies that measure factors beyond performance and productivity, such as happiness and wellbeing, are 80 percent more likely to remain with the organization for at least another year. And yet, less than half of those surveyed by Indeed felt their organization is measuring happiness and wellbeing.

Measurement does not have to be limited to the retroactive approach of gauging employee performance. Because employers are not passive observers of their employee’s successes and failures. Instead, they can take action to provide the sort of holistic employee support and scaffolding that enables every employee to thrive.

Of course, measurement as a performance management tool will never lose its importance in the world of work — but increasingly, organizations are understanding that the most effective way to boost productivity, retention and workplace success is to guide their employees toward authoring their own career destinies.