As of 2023, 69 per cent of organisations across sectors have adopted a transparent employee review approach, aligning employee objectives with leadership priorities, according to the PeopleStrong Performance Trends Report.
While 35 per cent of companies now prefer quarterly performance reviews compared to 22 per cent last year, the number of firms opting for annual reviews has dropped to 39 per cent from 50 per cent last year.
“Continuous performance is a response to the demands of a dynamic economic environment, which requires adaptability and agility. It is crucial to shift the perspective from viewing performance management as a mere system to track and record outcomes, to recognising it as a dynamic ecosystem that drives a performance-based culture,” said Vipul Mathur, Country Head - Middle East, PeopleStrong.
OKRs (Objectives and Key Results) have emerged as the dominant performance management framework across more than 10 industries, including the Internet, manufacturing, BFSI, IT/ITeS, and even retail. In just one year, OKR adoption has increased by 20 per cent.
Moreover, organisations are actively transitioning from person-based structures to skill-based frameworks, placing a greater emphasis on utilising skill frameworks to enhance capabilities. This shift has led to a significant surge in discussions surrounding skills-based talent strategies, evident through the prioritisation of Individual Development Plans (IDPs), which has seen a 7 per cent increase compared to the previous year.
Even before the disruption of 2020, HR leaders were not satisfied with their performance management approaches. According to a Gartner report, 81 per cent of HR leaders are changing their organisation’s performance management system.
Tasked with driving the CEO’s agenda for growth and agility, CHROs continue to question how their approach to performance management should change to create more impact. Changes often focus on addressing the most common complaint: that the process is too complex and time-consuming, said the report.