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Performance Management in 2023: The Upcoming Shift

Performance managers are getting ready to work with a talent pool that is no stranger to taking risks, changing careers or jobs easily, gladly investing in personal development, and holding a high appreciation for company values. Are you ready for the upcoming shift?
Daniel Zacharias

Jake Sopiars

January 3, 2023
performance management

While Elon Musk has decided to cancel remote work, the fact remains that the traditional office and way of working have changed immensely in recent years, mainly due to the coronavirus pandemic. Outsourcing, staff augmentation, and working flexible hours have become so common that they feel like they are here to stay, regardless of the Twitter owner’s efforts. 

With that in mind, we can expect sound changes in performance management in 2023. The reasons for them and their expected consequences are equally compelling, so let’s take a look at them first before delving into the upcoming trends.

Why the changes are happening

Nothing showcases the causes of changes in performance management better than the most recent figures. 

According to a new Gallup survey, around 60 million of American workers confirm that at least a part of their job can be done remotely. That’s about 50% of the US workforce being aware they can occasionally work from home. 

This mindset probably won’t change in the year ahead, as nowadays the question of whether it is possible to work remotely is no longer a question but rather something that goes without saying in reputable companies. After all, about 70% of the employed were working away from the office in May 2020. 

Overall, remote work has passed the test, and hybrid work isn’t going anywhere, despite Elon Musk’s announcement. If anything, leaders and managers are very keen on remote or hybrid work as such work opens new opportunities such as staff augmentation.

As a result, performance management will have to reinvent itself in 2023.

Given the new context, it’s only natural that performance management has to reshape itself. Here is the list of the most significant changes to be implemented in practice starting next year.

Flexible, not fixed: business goals

Until recently, performance management would create annual or biannual goals, practical strategies, and plans for their achievement. Usually, the process would begin and move forward until the completion of those objectives. 

Nevertheless, recent events in global markets have taught us differently. For instance, we just witnessed a massive drop in bitcoin prices, and world conflicts continue to affect businesses everywhere. Sticking to rigid plans is no longer feasible. 

Therefore, performance managers will have to create more flexible plans that are open to alterations all year long. That implies not just quarterly but rather sometimes daily or weekly adjustments. 

Continuous feedback

The role of performance managers as supervisors will become even more substantial in 2023. Just like the goals will change more frequently, employees will receive feedback about their performance more regularly.

In short, performance managers will have more work to do, monitoring employees more closely and reacting in a timely manner by providing guidance and support.

Data-driven management

Managers will have even more data analytics tools at their disposal in 2023, which will help them generate proper feedback and instructions for their team members. 

By using AI and more personalized tools, performance management will be able to evaluate the workers in a more unbiased and in-depth way. For instance, data analytics should help provide arguments for raises and suspensions. 

Furthermore, managers will be able to develop new, better-suited training programs, which in turn will result in the better overall performance of the whole team.

Focus on employee retention

Next year, it’s not just customer satisfaction that’s most important — employee satisfaction matters as well. So much so that performance managers are doing their best to keep the trained professionals within their teams. Essentially, frequent employee turnovers cost money and time, so managers will have to try even harder to keep their teammates. 

How’s that done? Most of the work is already done via the above-mentioned data-driven management and increased supervision. The latter isn’t just to define the task completion progress but it can also define good indicators of employee satisfaction. One goal is to help them become even more successful at what they do.  

The term “performance” may become extinct

Let’s now tackle the elephant in the performance room: are performance managers still going to be called like that? 

Admittedly, the managers’ focus will be on something other than the sole performance. They will work in unison with the HR department and focus on how they can help team members improve. 

The final results are still going to matter, of course. However, until the performance outcome is reached, managers will invest all they have into developing employees and helping them on their career path.

Generation Z is coming

Without a doubt, performance managers are preparing for gen Z, and for a good reason. By 2025, this generation will make up about 25% of the global workforce

The new workforce already has a reputation for itself, and it’s a far cry from millennials or any other preceding generation. Performance managers are getting ready to work with a talent pool that is no stranger to taking risks, changing careers or jobs easily, gladly investing in personal development, and holding a high appreciation for company values. 

To sum up, performance management trends in 2023 definitely pose a real challenge for managers. If the managers are to remain successful, they’ll have to focus on a lot more than performance goals and results.

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