The future of performance management in a hybrid world

How do you know if an employee is working ‘properly’ from home? And more importantly, does it even matter?

Some organisations are completely comfortable with remote work, whilst others are clearly very uncomfortable. I call this dichotomy “Remote first or remote forced”.

Organisations who are truly remote first have worked out that how a person performs work is less important than the actual work performed. This perspective shift enables them to overcome the challenges associated with remote and hybrid work, especially those around bonding, collaboration, and visibility.

One example of remote first is technology firm Font Awesome. A remote first and globally distributed team from the beginning, Font Awesome holds mandatory one week retreats every quarter that it calls ‘Snuggles’. For one week the team lives and works together, a time which Font Awesome says helps build and repair relationships, conduct planning, and review successes and failures.

Whilst Font Awesome is a great example of how remote first works in a smaller organisation, Atlassian (with almost 11,000 employees in 13 countries) demonstrates how to pull off remote work in a large one.

Central to Atlassian’s culture is Team Anywhere, the philosophy that puts team members in control of their own priorities. Atlassian also has a dedicated team devoted to arranging in person meetups for Atlassian’s departments and teams, ensuring that in-person time is as effective and productive as possible.

Looking at both these organisations, the main thing that jumps out is their focus on turning communication and meetings into deliberate and valuable activities.

As Peter Drucker wrote: “Meetings are by definition a concession to deficient organization. For one either meets or one works. One cannot do both at the same time.”

These organisations are overcoming the challenges of remote work whilst also tackling the bane of remote and in-person working – the meeting that needn’t be.

On the other hand, most organisations are remote forced. They were forced to enable remote work by the pandemic and have been forced to remain hybrid by their workers, who are reluctant to surrender the benefits of working anywhere simply to justify their employer’s ten-year office lease. This results in the worst of both worlds; managers without the organisational support to properly measure their employee’s contributions, and cultures that were formed pre-pandemic and encourage conflict between those who work fully in the office and those who don’t.

The problem with accidental managers

It’s understandable that so many managers find managing performance in a hybrid world to be a challenge. Without training they rely on imitating the styles and practices of managers they’ve worked under in the past – and in the past, observational supervision was a key part of determining the old measures of performance. That is, making sure employees turn up on time and look busy.

As HR leaders we need to get better at measuring what matters. Not only is reforming performance management key to managing hybrid workers, but also to tackling the stagnation of productivity seen over the past twenty years.

Without properly training our managerial team we end up in a situation where performance is measured in terms of costs and efforts, rather than results. Even the most accidental manager can identify how much effort the worker next to them puts in or calculate the amount they cost the organisation. What’s harder to assess is their effectiveness, impact, and contribution to results. For that, the line manager depends on HR to provide the tools and measures that matter.

Introducing inappropriately named ‘productivity monitoring software’ is rarely the answer here. My biggest argument against them is that they monitor activity, not productivity, and confusing these two things is the biggest barrier to improving productivity we have. It serves only to foster a lack of trust between manager and managed, encourages clockwatching, and fails to measure the impact of work, only that it happens.

Instead, we need to improve and upskill our managers. 82% of managers are accidental – without any formal leadership training. 28% of employees say they have left an employer due to poor management. And of course, we also need to be aware of the Peter Principle – that people are promoted to the level of respective incompetence before they stop advancing.

Performance management: HR’s time to shine

So, we should start looking at this another way. How much are managers with high employee turnover costing the organisation in recruitment costs? I’ve previously discussed how managers are rarely effective recruiters, and in the same vein, they’re also rarely good at reviewing and managing performance. They excel in the day-to-day of motivating and using their teams to deliver the organisational objectives they have responsibility for.

It is HR who are experts in the organisation’s performance management procedures. And it is HR that has the organisational reach to understand what counts as a result across departments and help managers to truly judge an employee by contribution to results, rather than efforts.

And this is the key to managing performance in a hybrid world. A hybrid working world is one where efforts cannot be easily observed. But equally, it’s one that proves efforts and results are not the same thing and this should provide the push your organisation needs to start measuring performance in terms not of efforts and outputs, but in results and outcomes.

Finally, a word of warning to those organisations who are ‘remote forced’. As more organisations start to insist on a full return to the office, the group that has the most to lose from this are women, who are statistically likely to have benefitted most from having the flexibility to support other responsibilities such as caring.

My feeling is that a test case under the Equality Act 2010 that challenges a mandatory return to the office as indirect discrimination on the basis of sex is likely sooner rather than later. The outcome of this could have major knock-on effects – including a de facto requirement to effectively make all roles hybrid unless they can’t be.

Our Manager Guidance: Performance Management e-learning course gives line managers practical support with reviewing performance, developing careers and tackling poor performance.

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