The Future Of Performance Management

I came across this article from McKinsey which challenges traditional thinking about performance measurement (annual appraisals etc.).  It advocates the use of crowdsourced fact-based performance observations, coupled with some gamification techniques, providing much more evidence-based performance data that can be gathered and processed in real-time.  

The article also looks at reward and compensation schemes, and mentions a technology company  that conducted a thorough study of what motivates its employees, looking at combinations of more than 100 variables to understand what fired up the best people. Variables studied included multiple kinds of compensation, where employees worked, the size of teams, tenure, and performance ratings from colleagues and managers. The company found that meaning—seeing purpose and value in work—was the single most important factor, accounting for 50 percent of all movement in the motivation score. In other words, it wasn’t compensation. In some cases, higher-paid staff were markedly less motivated than others. The company halted a plan to boost compensation by $100 million to match its competitors.

A lesson here perhaps for all of those companies and sectors (e.g. just about every FTSE100 company and the entire finance sector) that rely exclusively on bonus schemes to reward and motivate staff. Just think what money they could save!

Well worth reading the full article. http://www.mckinsey.com/business-functions/organization/our-insights/ahead-of-the-curve-the-future-of-performance-management?cid=other-eml-alt-mkq-mck-oth-1607