Human Resources

Revamping Performance Management in the Era of Hybrid Work

Nov 30, 2021

More than 40% of newly hybrid workers say their employer hasn’t changed how their performance is measured—adding further strain to an already disjointed process.

Brian WestfallPrincipal Analyst
Revamping Performance Management in the Era of Hybrid Work

What we'll cover

The widespread shift to hybrid work—where employees split their time between working at an office or other central worksite, and working remotely—has been one of the biggest stories of 2021. And with 70% of small businesses that are currently hybrid planning to remain that way when the COVID-19 pandemic is over, it’s looking like this once-niche way of working will remain a major fixture of talent management in 2022 and beyond.

To make this model succeed, HR leaders at hybrid businesses have already changed how they pay employees, what benefits they offer, and even what tools and software workers use

But one area that has remained largely untouched during this transition is performance management. According to GetApp’s Employee Experience Survey*, 43% of employees who went from working completely on-site to a hybrid or remote work arrangement during the COVID-19 pandemic say their employer hasn’t changed how their performance is measured.

how-hybrid-remote-work-transition-impacted-performance-measurement

For a process that was already underwhelming before the pandemic (less than one in five HR leaders in a 2019 Gartner survey believed that performance management was effective at achieving its primary objective), this finding should raise a big red flag. Unless hybrid organizations alter how they handle performance management to fit the unique dynamics of this work model, they not only risk making an already broken aspect of talent management worse, but also damaging employee trust and engagement along the way.

With the help of our survey data and additional Gartner research, let’s look at three ways performance management is failing hybrid workers, and what you, as an HR leader of a hybrid business, can do to fix it.

Productivity isn’t an accurate reflection of hybrid worker performance

Companies’ fixation on productivity didn’t go away as employees shifted to remote and hybrid work during the pandemic. In fact, it intensified. We found that more than half of small businesses (53%) invested in some form of employee monitoring technology over the past year to ensure that workers who lost on-site visibility were staying productive.

The consequences of this are two-fold: Not only does monitoring not increase productivity (53% of small business employees told us monitoring had no effect on how hard they work), but research has suggested that productivity is a poor indicator of employee performance to begin with. In other words, how much or how hard an employee works has little correlation with how much they actually contribute to the organization.

Making matters worse, this hyperfocus on productivity when evaluating performance has a disproportionate impact on hybrid employees. Nearly one in four hybrid workers (23%) in our survey disagree that the way their work performance is evaluated accurately reflects how good of an employee they are—and this is the highest percentage of any work model (on-site, hybrid, or remote).

employees-who-disagree-evaluation-method-accurately-reflects-performance-by-work-model

How to fix it

One of the most important performance management changes that hybrid businesses need to make is getting away from focusing on inputs such as the number of hours spent on a computer or time at the office, and focus instead on outcomes. Less than half of the hybrid employees in our survey say that their output is the most important factor in how their work performance is evaluated, which means a lot of organizations still haven’t made this important shift.

hybrid-employees-evaluated-on-output

By evaluating performance based on output (where possible), not only can you better compare on-site and remote employee contributions side-by-side, but you can also give hybrid workers more flexibility to reach their performance goals in the way that works best for them. As long as a hybrid salesperson hits their monthly revenue quota, for example, it shouldn’t matter how many phone calls they made, or where and when they made them.

This will require more agility from your managers, who will need to: 1) create fair output goals for each employee that can be adjusted as needed based on seasonality, availability, and shifting priorities, and 2) accurately assess hybrid employee contributions to the organization. Consider investing in a project management system or goal tracking software to make this process easier for them. 

The “face time” dilemma

If every employee on a team is fully remote, then everyone gets roughly equal time and visibility with their manager. The same thing is the case if every employee is fully on-site.

This is not true in hybrid work, which can lead to mostly on-site employees (who have more visibility) being evaluated more favorably than those who mostly work from home. A 2019 study confirms this bias: The more “face time” a worker had with their manager, the more likely they were to get better work assignments, stronger performance reviews, and promotions.

As a result, hybrid employees are more than twice as likely as on-site employees to disagree that performance evaluation at their job is fair and equitable across the entire workforce.

hybrid-employees-more-likely-to-disagree-that-performance-evaluation-is-fair-equitable

How to fix it

If your managers have a significant visibility bias, it creates an opportunity imbalance. While on-site employees get all of the big projects and learning opportunities, the remote employees are often left out.

To rectify this, you should work with managers to ensure that work allocation is equal across all employees. Instead of assigning the less visible remote employees all of the “grunt” work that they do alone, an effort should be made to let them lead important projects and collaborate with other teams. That way they have the same opportunity to earn big “wins” for their performance evaluation.

The transition to hybrid work is also the perfect opportunity to revisit your training materials. Instead of relying heavily on instructor-led training sessions that favor on-site workers, you should invest more in digital training materials that everyone can access and benefit from equally. A learning management system (LMS) is great for this, as it allows workers to access important training modules from any device, regardless of location.

litmos

Employees can access training materials from a variety of devices in SAP Litmos (Source)

Hybrid work accomplishments often go unnoticed

To borrow liberally from a famous thought experiment: If a worker does a good job, but their manager isn’t there to see it, did it ever really happen? From a performance management standpoint, the sad answer is no.

That’s bad news for hybrid companies, as the very nature of hybrid work—with employees going in and out of a central worksite and interacting with other people through a variety of physical and digital channels—makes it more difficult for managers to see and recognize work accomplishments. As a result, hybrid employees are slightly more likely to disagree that their boss has enough visibility into their work performance compared to fully on-site or fully remote employees.

employees-who-disagree-boss-has-enough-visibility-into-work-performance-by-work-model

Not only does this lack of accomplishment visibility mean hybrid employees are recognized less often, but it also means they don’t trust the intentions when they are recognized. In a survey of 5,000 employees, Gartner found that remote and hybrid workers (21%) were more likely than on-site workers (10%) to perceive that their manager only awards them to get them to work harder (full research available to Gartner clients).

How to fix it

One manager by themselves won’t have enough visibility to be able to recognize all the good work that happens in a hybrid environment. A dispersed workforce requires more sets of eyes that are empowered to bring visibility to work accomplishments.

To accomplish this, managers should first meet with their teams to come up with a set of criteria for recognizing someone. The goal is then to train employees on the kinds of exemplary work that should be recognized based on team and organizational objectives and desired behaviors.

Once employees know what kind of work will be recognized, they need a highly visible place to be able to share it. 360 feedback software is a decent solution for this, as employees can recognize their coworkers in a way that directly influences performance reviews. The downside, however, is these tools often have limits on who can leave feedback, and if you only do performance reviews once a year, workers may forget noteworthy accomplishments that happened months ago.

Instead, consider a dedicated employee recognition tool. These platforms allow employees to recognize accomplishments in real time, which can be sent straight to a manager or posted on an activity feed for everyone in a department, or the entire company, to see. Managers can then access recognition data from these tools during performance review time to be able to comprehensively assess hybrid workers.

bucketlist

Employees can recognize one another in a highly visible way through Bucketlist (Source)

Additional talent management and hybrid work resources

Performance management has a long way to go before it can become an effective tool for organizations and employees alike, and that’s doubly so for hybrid businesses. If you found this report helpful to get your performance management processes back on track, check out some of our other talent management and hybrid work resources:

Survey methodology

Employee Experience Survey, October 2021

*GetApp conducted this survey in October 2021 among 629 full- or part-time employees in the United States: 217 employees who work the entire time at an office, store, or other centralized location, 201 employees who work some time at an office, store, or other centralized location, and some time remotely or at home (i.e., a hybrid work model), and 201 employees who work the entire time remotely or at home. The goal of this survey was to learn how work location impacts employee performance management.

Note: The applications mentioned in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.

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About the author

Brian Westfall

Principal Analyst
Hey there, I’m Brian. I’m a Principal Analyst at GetApp. I bring you insights about HR and recruiting software. I studied at Trinity University and have been covering technology and talent management since 2014. Austin, TX is my home base. I love to travel and hate how much I’m glued to my phone. The tech trend I think you should keep an eye on: Virtual reality! No longer just a niche product for gamers, VR has real HR potential in everything from onboarding to learning & development.
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