4 Essential Trends at HCI’s 2017 Performance Management Innovation Conference

The theme at Human Capital Institute’s conference on performance management innovation this year is “feed forward, not feedback.” In an early poll of attendees, most said they were currently looking to transform their performance management, with about 20 percent saying they already use an agile performance management process.

With these changes come challenges: how do you train managers to give better feedback, what technology will prompt managers and employees to have these conversations, and what do you need to know about change management before you dump reviews or remove ratings?

The conference drew a great minds in both speakers and attendees working to answer these questions. We collected the top themes across sessions in the two-day conference below.

1. The System Defines Behavior

Citing a study on bike messengers, Alan Colquitt, Ph.D., explained that a pay-for-performance program with cash incentives was associated with competitive behaviors inside and outside of work — but the money incentives did not attract these types of workers, but actually created these behaviors. A company that uses compensation as its main incentive can actually force itself to overwhelmingly rely on compensation as a reward.

A better way is to pay based on market rate, cost of living, more frequent promotions, or banding, Colquitt said.

Many presenters cited studies that found although compensation can attract and retain talent, it does not drive performance, and thus should be decoupled.

2. Conversation, Not Evaluation

Companies successful in innovating performance management followed three guidelines: They added regular conversations, the conversations were future-focused, and they used solid change management.

What happens in manager-employee conversations is crucial. David Rock from NeuroLeadership Institute recommends the following: goal setting, everyday feedback, regular check-ins against goals, end-of-cycle reviews, compensation conversations, and career conversations.

Especially if ratings are dropped from performance management, as companies from Adobe to Goldman Sachs are doing, managers need to have both the career and compensation discussion with employees.

3. The Compensation Question

Second to the need for manager training around feedback, attendees at HCI were concerned about splitting compensation from performance reviews, when either eliminating reviews or ratings.

Patagonia uses an annual goal which is designed to be achievable, and results play into compensation. Separately, employees set quarterly stretch goals, used to drive feedback conversations with managers, to drive employee growth — and these are not applied to compensation at all.

4. Gigs, or Tours of Duty

Millennials are taking over the workforce, but in tandem, the workplace has changed. Technology such as Glassdoor is forcing transparency. Workers think of their jobs as gigs, maybe lasting a few years before they move.

How do you rethink your investment in your workforce when they might just be with you for two years, Cheryl Johnson from Echo Global Logistics mentioned, citing “The Alliance” by Ben Casnocha, Chris Yeh, and former LinkedIn CEO Reid Hoffman.