The world of work is constantly changing. Fresh generations in the workplace with their own ideas. New tech streamlining our roles. And, just when you think things are settling down, there’s some form of global catastrophe or social upheaval to keep you on your toes. So, we’ve decided to break down the biggest performance management trends of this year.

It’s time to reflect on the current state of performance management. It’s only then that we can turn our attention to the state of things going into 2024.

Managing people isn’t easy. And neither is supporting them as a HR leader. Or, at least, they shouldn’t be if you’re actually doing your job.

A good manager pushes themselves as much as they do any of their employees. Getting the best out of your people is a challenge. Combined with the need to support their wellbeing, it becomes a balancing act. But it helps when managers have the right performance management tools at their disposal.

But, to know what support managers need, HR must understand the performance management trends of 2023.

There are countless businesses across all kinds of sectors and industries. So, it’s hard to boil performance management down to a few key trends without generalising. But, even so, there are a few common practices and developments it’s worth keeping an eye on.

These aren’t necessarily brand-new trends for 2023, by any means. But these developments have continued to gain relevance in the modern workplace.

Continuous feedback

Annual or bi-annual performance reviews have been a mainstay in the workplace for a long time. But, by now, it’s pretty much common knowledge that they don’t work. At least, not by themselves.

On top of that, remote and hybrid employees have become much more common. These employees rely on continuous feedback perhaps even more than office-based colleagues. That’s because they rely on these interactions in the absence of face-to-face conversations.

Evidence shows that continuous feedback is the best way of coaching performance. In fact, employees getting regular feedback are 3.6x as likely to report “motivation to do outstanding work” according to Gallup. But it’s about far more than morale or motivation.

Feedback is much easier to process and apply when it’s timely. The inciting incident is still fresh in the employee’s mind. And, when they try to do better, continuous feedback lets them know if they’re on the right track.

It’s like that game where you tell the person looking for something if they’re “warm” or “cold” based on proximity. If you only spoke once at the beginning and once at the end, it wouldn’t work. Feedback is only a useful guide when it’s timely and consistent.

This is the principle behind Engage365’s employee check-in. They’re a way of bridging the gap between distant performance reviews. But they’re also a way for managers to listen to their people. So regular feedback helps employees to improve more quickly. But it also gives them a voice. 

Goal-setting and alignment

Goal-setting and alignment aren’t new concepts either. But we’re seeing them gain more prominence in 2023. Take Microsoft’s suite of employee experience apps, Microsoft Viva, for example. And, while these apps serve a variety of functions, OKRs play a huge role.

Microsoft launched Viva in 2021. Since then, they’ve gone on to hit 20 million active users this year. So, why the focus on goal-setting, and OKRs in particular?

It’s simple. Using Objectives and Key Results is one of the best ways to consolidate employee efforts. By grouping projects together as key results for overarching objectives, it’s easier to make sure nobody’s working against each other. That’s what we mean when we talk about alignment.

Our goal-setting options (SMART Goals and OKRs) are some of Perform365’s most popular features among clients. Tying them to regular feedback ensures managers get weekly progress updates. This reduces the need to chase people up. But it also gives employees greater autonomy to deliver results.

Employee development

Your employees are an investment. The more you put into their training and development, the more you stand to get back in return. But, while this has always been the case, it’s arguably more important now than ever.

The Great Resignation may have happened in 2021. But that doesn’t mean we’ve fully seen the back of it. According to the US Bureau of Labor Statistics, 4 million people quit their jobs in May. On top of that, cost-of-living increases are pushing people to the brink.

All this to say, employees are desperate to earn more, develop their careers and ensure job security. Developing employees makes it more likely they’ll advance. But, promotions aside, even a bit of upskilling makes it easier for someone to fight for a wage increase.

So, what performance management trends are we seeing in terms of employee development?

  • An increase in online/digital training tools.
  • Gamification.
  • Personalised training.

With so many of these performance management trends and training tools being digital, it’s important not to forget the classics. Formal training isn’t the only aspect of employee development to consider.

Don’t underestimate the value of mentorships for helping employees to grow. In fact, they can be just as beneficial for mentors as they are for mentees. And, if you’re trying to open an employee up to new skills or areas of work, consider putting them on an official secondment.

Digital tool development

Speaking of digital tools, we’d be missing a trick if we didn’t address the current state of workplace tech. Outside of key industries, a lot of work these days is increasingly virtual.

There are tools to aid with performance management, like the services we offer at Zensai. And then there are tools to aid performance. Collaborative aids, like Asana or Trello, or virtual workspaces where minds can meet.

But, unfortunately, not all digital performance management trends are a good thing. It seems many employers are still opting to use automated productivity tracking software. According to the New York Times, 8 in 10 employers reported using such software to monitor employees in 2022.

If you’ve read our piece on staff tracking, then you know our thoughts. But, if this is new to you, let’s sum things up:

First off, automated productivity tracking is inherently distrustful. It communicates to your people that you expect them to slack off. That you’re waiting to catch them out. And, on top of that, these scores are used to pit employees against each other.

You might think a bit of competitiveness is a good thing. But these practices disincentivises people from working together, because they’re all competing. And a sudden fall in rankings can cause a decline in morale, which threatens to become a vicious cycle.

If that weren’t bad enough, the metrics used by productivity tracking software are tenuous at best. They use things like click rates and scroll speed, or time spent on a given page. These metrics are arbitrary, and don’t capture the level of thought and effort people put into their work.

That said, if we’re talking about performance management trends in workplace tech, there’s a big one we have to acknowledge…

Artificial Intelligence

The concept of Artificial Intelligence has been at the fringes of public consciousness for a long time. At first, largely in a sci-fi context. Think of the work of Isaac Asimov, or HAL 9000. The term has even been used by game designers, referring to the algorithms controlling Non-Player Characters (NPCs).

But, now, machine learning algorithms are becoming part of our everyday lives. Algorithms can analyse vast swathes of data very quickly. They can identify patterns regular people miss. Hazards, conclusions, or even written tone.

And these traits can be incredibly useful. Which is why it’s one of the most prominent performance management trends of 2023. Take our sentiment analysis algorithm, for example.

It analyses data from your employee check-ins and compiles it into a bespoke report. It highlights trends and combines quantitative metrics with qualitative insights. And it does all this near-instantly. 

Human HR workers, on the other hand, would take a much longer time to sift through the data. And there’s no guarantee they’d be able to spot all the relevant insights, despite all that time

What will performance management look like in 2024?

Living in the moment, it can feel like everything is moving at lightspeed. It can be unsettling. So, if this is where we are in 2023, what will performance management trends be like in 2024?

The continuation of hybrid and remote work

Remote work has been one of the defining elements of work in the past few years. In particular, it’s shaken up how we view performance management and forced many managers to adapt.

So far, we’ve seen it provide net positives. As a result, remote and hybrid employment options have become way more common. But, despite this, there are still plenty of talking heads yearning for a pre-Pandemic, office-first culture.

But we’d argue remote and hybrid options are here to stay. Remote workers have consistently been able to match or exceed office worker output. And Buffer’s annual State of Remote Work surveys keep finding that remote work is near-universally beloved by its participants.

AI may just be getting started

As shocking as the latest developments in AI have been, this might just be the tip of the iceberg. Right now, Artificial Intelligence is one of the most explosively popular areas of the tech sector. There’s still so much potential for streamlining processes and innovative data analysis. Which, of course, means huge profit for the tech companies leading innovation.

Where might it go from here? It’s hard to say. But, with the UK’s first “AI employee” available for hire, future developments could change everything we know about the world of work. Whether that’s a good thing or not depends who you ask.

Next year might be more of the same

So, what about performance management trends going into 2024? There’s also every possibility that next year will look a lot like this one. Mind you, that’s not to say things will stagnate. Right now, we’re in a transitionary period as a global society.

The potential ramifications of AI alone are too huge. We’re going to be untangling those for years to come. And, with hybrid and remote workers firmly cemented, managers will have to continue operating on two fronts. There will probably be new apps and services supporting flexible management. But how different will they be, really?

So, yeah, there’s every chance 2024 might end up feeling like this year on repeat. Unless, that is, some global catastrophe doesn’t pop up and throw everything off track. But that wouldn’t happen again… Would it?