Performance management: Centuries-Old or New Age Process?

Do you think performance management is a new concept designed for keeping everything in the organization aligned? If yes, you need to turn back the pages of history to know it is almost a century-old process. Performance management evolved a lot, and the way we see it now is far different from what it was in the past.

In this write-up, we will discuss how this process evolved and became the hi-tech method of managing new-age organizations.

The 1880s – First performance appraisals

Performance management has always been a matter of concern. As per some historians, we can see its trace back to the early 221 AD, when a Chinese emperor of the Wei Dynasty rated the performance of his family members. However, the origin of performance management in the workplace began in the 1800s. It started when Robert Owen had “silent monitors” noticing the performance of workers in his cotton mill in Scotland. It helped in evaluating the performance of the workforce but didn’t look at the performance of the mill as a whole.

The 1920s and 1930s – Operational performance management

Performance management became essential during the 1920s and 1930s during the expansion of businesses. At that time, companies were focusing on maximizing mass production and enhancing operational efficiency. The concept of ROI came into existence, and companies started trying to get the most out of their budget. Businesses started focusing on the company’s performance and the net income to meet predetermined expectations.

The 1950s – Management by objectives (MBOs)

Peter Drucker, a management consultant, wrote a book in 1954 and named it “The Practice of Management”. In that book, he described the concept of Management by Objectives (MBOs). According to his concept, a business should be managed based on its needs and goals.

The 1990s – Objectives and key results (OKRs)

By the 1990s, organizations started noticing that they could improve and strengthen their performance by connecting their individual, team, and departmental goals with the main objectives of the organization. OKRs were introduced by John Doerr at Intel, and later on, it was used by the tech giant Google.

Even today, along with Google, many other successful businesses use objectives and key results to achieve their organizational goals. Although it is a good approach to managing the organization, it should not be the only factor for performance evaluation and review. OKRs should be the component of the contemporary continuous performance management approach. By doing this, organizations provide clarity to employees about what they are expected to do. Furthermore, organizations support their employees’ efforts by giving feedback.

The 2000s – Constructive feedback

In the 2000s, companies realized that continuous feedback is not enough, and it should be constructive as well. Organizations realized that feedback is a double-edged sword. Poorly given feedback is even more dangerous than no feedback. So, all feedback must be constructive. It is an effort-based, action-based, and forward-looking approach.

Final note

The way of communication and leadership strategies by leaders of the organization has changed drastically after the pandemic. Not just that, they are now working from a premise that builds transparency, great trust, continuity, efficiency with their employees in an environment that is unforeseeable.

Although there have been numerous challenges, it is essential to integrate progressive talent management with complementary and winning technology strategies. Leaders should make sure they not only focus on motivation and safety but also on performance and productivity in the work, workplace, and workforce.

This is where a modern performance management software that leverages artificial intelligence and behavior aspects of employees can help, especially for a digital workforce.

The above write-up has been inspired by a very interactive and informative video “The history of performance management” created by the experts of Josh Bersin Academy. This insightful video explains the whole journey of performance management in a graspable way.

Credits to the video and information in this blog go to Josh Bersin, global industry analyst and CEO of The Josh Bersin Company (www.joshbersin.com). The permission for referring to this video has been taken from the creators. Have a look at it to get a better understanding of the evolution in the domain of performance management.

entomo is a modern performance management software built for the ‘future of work.’ Powering
30mn+ users, entomo enables ‘enterprises of tomorrow’ to drive performance by aligning goals and nudging actionable insights to manage distributed & remote teams and build a tomorrow-ready workforce. To know more, visit https://entomo.co/request-demo/


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