Performance Evaluation Is Dead! So, What’s Next?
Traditional performance evaluation systems have become obsolete. Instead of rating employees once a year, we now need new-generation approaches that prioritize continuous development and transparency. So, if performance evaluation is dead, what will replace it? Here’s the answer: self-assessment, aligned goals, transparent progress, and continuous dialogue.
From Performance Evaluation to Performance Development
Using OKRs as a performance evaluation tool reduces performance rather than enhancing it. When employees expect to be graded at the end of the process, they avoid taking risks and setting ambitious goals. This, in turn, hinders innovation and growth.
The Cost of Performance Evaluation Systems
- At least 2 hours per employee for goal-setting
- An additional 2 hours for evaluation preparation
- Limited time for focused and efficient work
- Realistically, at least 1-2 workdays are lost per year
- Research shows that this process can cost up to $3,000 per employee annually in the U.S.
The Importance of Time and Energy in Performance Management
Companies do not have unlimited time and energy. That’s why, instead of implementing processes that decrease performance, organizations should invest in systems that support growth and development. If you have linked performance evaluation with OKRs, chances are your employees have already started lowering their goals!
The Future of Performance Management: A Transparent and Dynamic Work Environment with OKRs
OKRs reveal employees’ intentions for the company. Performance, on the other hand, is about how much of these intentions are executed in a disciplined and high-quality manner. That’s why dynamic and transparent performance development systems should be preferred over traditional performance evaluation methods.
3 Key Principles for Next-Generation Performance Management
- OKRs should be inspiring goals.
- Contribution, speed, and effort should be transparent.
- Systems should be designed to support continuous improvement rather than performance evaluation.
Long live OKRs and Performance Development! Discover how Myliba can help you reshape performance. 🚀
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