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Enterprise Performance Management: The Way Forward
Peter Law, Senior General Manager & Head, People Development & Performance, Mah Sing Group Berhad


Peter Law, Senior General Manager & Head, People Development & Performance, Mah Sing Group Berhad
There is only one way for you and your enterprise to thrive in the light of disruptions, which is the ability to reinvent faster than the speed of external turbulence. Disruptions are the new norm in the future of work and the future of work is now. Disrupt yourself or be disrupted.
Human Resource (HR) and Information Technology (IT) should be no stranger to each other. HR and IT are indispensable and they should be inseparable and integrated to comfort the disrupts and disrupt the comfort within an enterprise, systematically and sophisticatedly to accelerate sustainable performance.
Enterprise Performance Management (EPM) as a cross functional discipline is about the provision of tools and application of skills and capabilities that support informed decision making across the enterprise. To be a future-ready enterprise, EPM system should have the 3E’s —Effective, Efficient, and Engaging as it impacts every single touchpoint of employee experience.
Enterprise Performance Management encompasses everything from strategic formulation, business planning, goal setting, performance appraisal, and performance rewards and recognition. However, many enterprises don’t seem to be making much headway in rethinking, reinventing, and reinforcing performance management. In this article, we’ll explain five shifts of EPM for the future of work and practical approaches when applied skillfully, will bring EPM to life.
Shift 1: Shifting from Retrospective to Real- Time Performance Appraisal
There is a huge shift in performance evaluation and feedback from retrospective one-off annual checkpoint to on-demand evaluation and feedback in the past decade. However, in this era of VUCA with increasing volatility, uncertainty, complexity and ambiguity, on-demand basis is no longer effective, efficient and engaging. Performance evaluation and feedback should happen real-time and perpetual as things are changing faster than ever before and disruptions can happen at any point in time.
General Electric (GE), being the first enterprise that make force ranking popular in the 80’s and 90’s with 30 years of inception, has recently admits the performance management system is not functioning well anymore. GE is dumping annual performance appraisal and numerical ratings and reinventing performance management with immediate touchpoint with employees through perpetual feedback. Whilst we are not suggesting to remove numerical ratings, perpetual and real-time performance evaluation and feedback is indispensable. In the VUCA world where nothing standstills, perpetual and real-time performance evaluation and feedback can lead to sound decision making across enterprise.
Bringing enterprise performance management to life through human and technology integration
Shift 2: Shifting from Managing People to Coaching People
For the first time in history, five generations are working side by side. Multi-generational conflict happens. Therefore, the ability to communicate effectively with different generations is an essential life skill to thrive in a multi-generational workforce and bring out the best in each other. Managers need to know about individual employees, their competency and capabilities, as well as their personal and professional development needs. This can be done with real-time career conversation.
Career conversation is a series of conversations designed to address employee career development needs that should happen at all time. The quality of career conversation rests on the ability of managers to become effective coaches. Therefore, coaching is the key skill any managers should equip with to shift the paradigm from managing people to empowering people.
Shift 3: Shifting from Focusing End-Result to Sustainable Result
In the future of work, robot will replace humans for transactional and some transitional activities. However, in the wake of these changes, humans will be needed to create and deliver value in brand new ways for brand new business models through a brand new workforce structure. Workforce structure will shift from section-oriented to project-oriented and we are expected to be more agile and mobile than ever before. Therefore, EPM requires flexibility to manage individual performance based on project. Instead of measuring end-result annually, it is more realistic to measure project milestones.
To drive sustainability performance, we must accelerate individual performance. We need to be highly agile to learn, unlearn and relearn in a more rapid pace. Therefore, investing in people capability building is no longer a fancy option but prerequisite to succeed and breakthrough.Shift 4: Digitalising Performance Management
Globalisation and virtual workplaces play an increasing role in the changing landscape of the workplace. Performance management and coaching can be done real-time through the use of technologies and apps. Digitalising performance management is a powerful way of increasing connectivity, increasing time efficiency and operational excellence.
Based on McKinsey Quarterly Survey 2016, 65% of respondents from enterprises that have launched performance-related mobile technologies in the past 18 months said that they had a positive effect on the performance of both employees and companies. A mobile app makes it easier for managers and employees to record and track goals throughout the year. Employees feel more engaged because they know where they stand. The app also nudges managers to conduct more real-time coaching conversations and to refine goals throughout the year.
Shift 5: Differentiating Rewards
Don’t kill ratings yet. Embrace performance ratings and performance curve to differentiate your top performers, performers, under performers and non-performers. Research has emerged suggesting that the distribution of performance at most enterprises follows a distribution of 80-20 principle: 20 percent of employees generate 80 percent of the value. Therefore, your top performers are your top talents, they are valuable scare resources. They are a class above and they deserve differentiated rewards.
Often in time, EPM is not well appreciated because there is a missing link in between performance measurement and performance rewards e.g. bonus, short-term and long-term incentives, increment, etc. The differentiation in rewards for top performers, performers, under performers and non-performers must be significant. Avoid making performance management and rewards a black box, make them transparent and that’s the way to make EPM effective, efficient and engaging.
Bringing EPM to life requires both human and technological touches. The future is now, start the shift and bring excellence to your enterprise, making the future better now!
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