Performance Management in a Hybrid Environment

It has been an established fact that companies can gain a competitive advantage with a dual focus on people and performance. The P + P approach has compelling list of benefits: profitability along with consistency, resilience, and retention, which further fortify business performance and bottom line results. Performance Management processes have existed as long as organized groups, and by now we are aware of the philosophy behind effective performance management systems. However, the pandemic and the associated disruptions in the workplace have forced a mindset evolution when it comes to performance management.

While there is an increased awareness and acknowledgement of empathy as an essential leadership trait while developing people, the newer and more pervasive is the topic of navigating the hybrid work environment. 9 to 5 work arrangements at a workplace has been the norm for all generations that we can track, and hence this changing hybrid reality calls for the development of a new muscle, and performance management needs an overhaul of mindset lest we should slip into our unconscious biases and blind spots, leading to challenges in people development, engagement, retention and beyond.

A good performance system is transparent and outcome based. The decisions are objective and there is reliance on data and analytics. There is effective, non-ambiguous feedback and rewards are linked to talent, making the demarcations clear on what is good performance. No feedback should be a surprise, and there should be regular conversations and the manager is more a coach, different from the traditional job description of a manager whose function is of more focused on utilization of resources. And of all of the above should be conducted in a fair way.

That is true also of performance management in a hybrid environment. But it does not end there. There are a few additional nuances a people manager and a leader must be aware of in the hybrid environment.

Status Quo Bias

Human beings love familiarity, and managers are no exception to this rule. In the old world, there was one way of doing things – documentation, in-person meetings, physical presence/availability during traditional work hours etc. Things have changed – more and more organizations are opting for hybrid, remote-first hybrid, work from anywhere, flexible work schedules which make the existing/old ways redundant. However, there may be a tendency to over-index on the familiar/existing ways as the “preferred” way, which may be a completely irrelevant yardstick for the hybrid environment.

Proximity Bias

Different studies are indicating that managers and leadership teams are falling for a particular cognitive bias. Managers and leaders tend to show a preferential treatment when it comes to performance reviews and opportunities for advancement, and in general perception about “commitment” of an employee, based on physical presence or absence from the workplace. Those individuals more often “in sight” for manager, are those for whom they show a preference. This bias risks undermining the whole conversation around inclusion in a hybrid environment and the principle of a fair and effective hybrid working model of any kind.

Hybrid and the equity conversation

Studies show that people of certain ‘marginalised’ demographics opt for hybrid, remote-first hybrid and other non-traditional work arrangements: working mothers, single parents, caregivers, people with disabilities, etc. The work done in organizations to contribute to equity will therefore take many steps backwards if leaders do not become aware of the unconscious biases that influence their decisions and impact these groups disproportionately.

The hybrid environment is here to stay. It is, very likely, the future of the workplace. Human capital also will be increasingly important in the AI powered world as all exclusive human faculties – creativity, curiosity, critical thinking, and sense of connection – will be the attributes that will give organizations competitive edge.  Hence it is more important than ever for organizations to upskill their leaders to develop, build and manage talent in hybrid environment – and performance management is a critical fulcrum on which talent management resides. So, it is important that leaders become aware of their natural heuristics so that they contribute to the workplace of the future, the wellbeing of their people and the future success of the relationship between both.