The Transformation of Human Resource Management: Performance as Practice

Performance management is the institutional triptych of individual, team and organisation matching their demands and needs along one path. Here the contiguities of these three elements are blurred to attempt to bridge their gaps in skills, knowledge and information. It has moved from a command-and-control structure of top down implementation of goals to be met via annual reviews where pay-based bonuses are distributed and the weakest are let go (the Jack Welch model) to an increasingly decentralised system of constant feedback via informal meetings so as to meet the adaptive nature of modern business goals and focus on personal development within organisational culture, emplacing agility within the wider organisation through an individual-based and team-centric focus.

Human resources management in these developments has become an increasingly automated or decentralised process within complex organisations. It was normally conceived as the structural buffer between a fully adhocratic organisation (i.e. experimental, unpredictable and based around ideologically driven opportunities) and a functioning bureaucratic system (one of organisational charts, formalised rules and stability). Comparing to Mintzberg’s organisational structure[1], HR archetypally fit within the technostructure, shaping policies that flowed into the characteristics of traditional performance management and creating an organisation of compliance toward set, stable objectives.

The changing nature of business, particularly the higher levels of turnover, accelerated business cycles and allocative timings, and growth of new organisational forms (adhocracies, learning organisations, agile management, startup culture, Silicon Valley, etc.) and sectors (IT, logistics, marketing, lean manufacturing, knowledge economies, etc.) mean that Mintzberg’s organisational archetype is bleeding into different machinations that aren’t fully contiguous or rigid. HR in such scenarios is seen more as a drag on productivity and innovation than a guarantor of stable success. The Welch model of performance management proscribed an institutional situation where a business offers a series of extrinsic benefits in return for potential members to meet specified targets and contribute to steady growth. The culture of middle management and the corporate agreement of business, government and unions grew within this model.

However the growth of alternative organisational forms that emphasise intrinsic benefits and what McGregor would call theory Y motivators (autonomy, participation, empowerment or any other buzzword) have made the Welch model less viable as organisations become ideologically driven, team-centric and heterarchical. “Employee participation is an important topic in human resource management (HRM) research. It means that managers intentionally provide opportunities for lower-level employees to have a voice in key areas of organizational functioning”[2]. As performance management moves to performance practice, this element increases in importance.

“A key part of the promise of strategic HRM” is “high quality work-floor performance measures that are closely connected to the unique strategic priorities of the teams and overall organization involved”[3]. These strategic priorities have spread out into various avenues and disjunctures, from increasing the priority of equality and diversity to making organisations lean and agile to cope with highly adaptive environments that are not effectively handled by yearly targets, long production horizons and settled motivational factors of extrinsic benefits. This can be seen in performance management transformations over the decades, moving from military-based assessments of competency and merit to accountability and the provision of stack rankings and onto development goals, fluid objectives and talent management[4]. HR has moved from the unit responsible for maintaining standards and setting hard targets for an organisation’s members, creating rigid systems of judgment through which employees went through yearly, to being a guarantor of an organisation’s ideology, melding the technostructure and operating apex into an ideological position that can then be responsive and adaptive. HR is “responding to change over following a plan”[5], inverting its previous role of being the central planner. Performance management has become a decentralised series of standards that reflect organisational imperatives and attempt to entangle individual goals within them.

“Performance management is a whole work system that begins when a job is defined as needed and starts from the assumption that most people want to perform well”[6]. The value of performance management derives from the desire and ability to connect nature of the organisation’s role with the capabilities and desires of a prospective member, building two-way mechanisms to allow them to develop within organisational bounds. Alignment between individual, team and organisational goals can begin to be built and constantly developed and honed through performance management.

Both formal and informal elements are needed to make performance assessments effective, developing capabilities that match the roles and tasks required. This can be seen as straddling the line between codification and personalisation strategies[7]. Formal performance management explicitly connotes the role requirements and attempts to move a person’s skillsets toward them, codifying said role and its related knowledge as a process. Informal assessment looks at how said role(s) can be linked to personal qualities, making it flexible and adaptive to a member’s decision-making and knowledge aptitudes. Both are required to look at how to match roles to people as well as review roles and the people within them to continue to maintain best fit and spot any issues (dropped performance, alienation from work, lack of application, etc.) that may come up in an individual’s work patterns.

For both informal and formal performance management systems, providing an understanding of their role in the organisation, identifying and updating targets and KPIs (both related to individual and organisational goals), and maintaining an “audit trail” of successes and failures are integral to performance assessment[8]. However more subtle elements have come from Natcen data that analyses what employers and employees consider the most important facets of performance management. Staff survey data from SMEs with formal and informal PM systems note the importance of identifying skills gaps, managing retention and dismissals, and developing relations between managers and members[9]. In large public sector organisations, they “saw the purpose of a PM system as being a mechanism for promoting organisational unity in several areas: signalling company values; supporting staff development; and communicating overall business objectives to employees”[10].

In the ever-changing nature of business and corporate worlds, the increasing emphasis on people management, human capital and personal development has meant that organisations are moving away from purely formal mechanisms of performance management that quantify one’s capacities and create performance rankings to judge whether someone should be rewarded or punished[11]. As the Natcen survey data shows, PM systems now need to be alert to issues and concerns that come from multiple directions, particularly those that crop up in informal discussions. By providing a platform (through performance assessments) for staff members, performance management can become a ubiquitous element of an organisation that is constantly managing performance through informal feedback and dialogue between manager and member, thus integrating members into an organisation through a culture of constant review and adaptation of member’s needs, goals and competencies, as well as assessing their failures and their career goals more generally.

“There should be no surprises in a formal review if performance issues have been dealt with as they should have been – as they arise during the year”. “The true role of performance management is to look forward to what needs to be done by people to achieve the purpose of the job, to meet new challenges, to make even better use of their knowledge, skills and abilities, to develop their capabilities by establishing a self-managed learning agenda, and to reach agreement on any areas where performance needs to be improved and how that improvement should take place”[12]. As Armstrong notes, a performance management system should be the development of goals, skills and work patterns to improve a staff member’s performance and further integrate them into the organisation.

This allows for work patterns to be reoriented where necessary and means the goals themselves are future-oriented, focusing on improvements and the expansion of skillsets. With Deloitte’s reform of their performance management structure, they maintained a formal system of assessment through scoring which gave them a “performance snapshot”[13] of where their members ranked across the organisation. They then used this to distribute rewards and develop future-oriented action goals, which fed into their informal team and staff meetings where such goals were monitored throughout the year.

Similarly, Netflix’s talent management system combined the formal and informal of performance management to identify skills gaps and target tasks effectively. Through 360 degree feedback and an intelligent compensation policy[14], they were able to implement strategies that allowed them to adapt to changing customer needs and technologies (such as the rise of online streaming) without maintaining a backlog of policies and members that were suited to outdated methods of working and strategising. HR in this scenario was able to become a part of this adaptive sequence, moving from quantitative methods of managing performance (through retraining and skill uplifting) to flexible methods that emphasised standards and a company ideology.

Performance standards aren’t necessarily relatable to precise or explicit work goals/objectives. They are something slightly more ambiguous such as being more receptive to change within your organisation, a requirement increasingly needed in changing, flexible business environments, where new systems and processes quickly overtake (and make redundant) old ones. This is comparable to Adobe’s organisational change through their Agile Manifesto, where they restructured job roles and work patterns, moving away from being a pure software company to a cloud-based company that offered constant updates and technical fixes to its customers, engendering a work environment that was agile and adaptive.

The evolving constraints of performance management mean quantitative analyses of one’s working styles and capacities provides too singular a focus, assuming one’s capabilities are fixed in stasis. Managing performance is now more about training members and developing their skillsets to higher levels, moving their cognition away from rote processes toward team-based work and adaptation to changes. “Businesses no longer have clear annual cycles. Projects are short-term and tend to change along the way, so employees’ goals and tasks can’t be plotted out a year in advance with much accuracy”[15]. Performance standards provide a basis through which individuals can gear their work (short and long-term) to organisational imperatives.

Adobe shows this organisation-individual melding. As part of their Agile Manifesto they transformed their working patterns, moving from turnaround times of 18-24 months to much shorter time cycles in their software updates and rollouts, developing a “sprint” system of short-term projects. This necessitated a change in their performance management system to accommodate these new modes of work and task allocation. They produced a system of ongoing feedback between manager and member that built off their formal objectives and standards, as well as “eliminating all mandates around timing, methods and written reviews”[16] so as to make the process as flexible as possible. In measuring performance, managers are required to maintain feedback relations with their members to gain the greatest possible understanding of their work output and capabilities.

Changes in organisational models produce different criteria for judging performance, whether they be bureaucracies, meritocracies or adhocracies[17]. As rates of information accelerate across organisational bounds, jumping between individual, team and wider knowledges, measuring standards becomes increasingly difficult as organisations become mixtures of these three model characteristics. In setting standards and objectives, there also needs to be the recognition that constant feedback and the provision of autonomy are paramount in avoiding information overload and maintaining a cohesive organisational culture that integrates its members.

In this environment HR has moved from the formal progenitor of standards within the technostructure and strategic apex to become part of the increasingly variable flows of an organisation’s ideology. “The new transnational companies are themselves placeless creatures. In Deleuze and Guattari’s terms they are ‘rhizomes’ … The old companies were sedentary and rooted to a specific spot. But we can no longer picket the typical new company’s headquarters, because there is none: only the shifting, headless rhizome of connections between its executives and their employees”. “The expansive, interconnected and structurally-indeterminate nature of organizations as mediated through global, electronic networks”[18] means that adaptivity and flexibility are increasingly a necessity of organisational structure and the surrounding ideology, as organisations become flows of communicational connections and rhizomatic couplings. Netflix’s talent management or Adobe’s agile performance structure show the changes in human capital management and member retention, with stack rankings giving way to personal development plans and the instantiation of standards (as a proxy of ideology).

The example of GE is particularly indicative, showing the need for continuous adaptivity away from command-and-control methods of reviewing performance to constant two-way feedback (particularly interesting with GE’s history of being the company to innovate stack ranking and quantitative performance measurements). In doing so they recognised the changing nature of organisational priorities and the accelerated timeframes through which decisions needed to be made and changes implemented. “The average number of direct reports for a manager has increased from four to seven, which has decreased the time spent on coaching and guiding each employee”[19]. This fact alone shows that feedback based on one-way hierarchies are inefficient and likely to ignore key performance indicators and fail to recognise individual and team failings. Constant, adaptive feedback between individual and manager as well as horizontally across the team and cross-vertically up and down the organisation are important in entrenching a member in a culture and making them recognise where their strengths lie within it.

In the context of adhocratic organisations and the increasing need for agility, performance isn’t just focused on quantitative measures like KPIs and work output, but also on integration into the team and wider organisation and the capacity to be adaptive to change (whether through processual or system changes, or through the capability to take on greater levels of autonomy and ownership within one’s work patterns and task allocation). This means underperformance is not just captured through quantitative work output, although this is still an important way to identify underperformance. Rather, through integrating formal and informal elements of performance management, a holistic picture begins to develop that can recognise not just obvious failings but more subtle ones that suggest areas for improvement. Such would include failing to integrate new systems into one’s tasks, failing to develop a team-based attitude to work and failing to adapt to increasingly task-based work (such as Adobe’s sprint method of project work).

Agility, teamworking and task-centric working are qualitative elements to one’s work. Identifying and fixing these isn’t a matter of disciplinary measures or retuning objectives, but rather a matter of inculcating a different mindset and series of attitudes to work through encouragement and co-development of one’s work methods. This requires a level of coaching and supportive management to understand and improve underperformance.

Manchester Metropolitan University’s human resources department has identified several causes for underperformance:

  • They don’t know why they should do it
  • They don’t know what they’re supposed to do
  • They don’t know how to do it
  • They think your way will not work
  • They think their way is better
  • They think something else is more important
  • There is no positive consequence to them for doing it
  • They think they are doing it
  • They are rewarded for not doing it
  • There is – or they anticipate – a negative consequence for doing it
  • There is no negative consequence to them for unacceptable performance
  • They don’t have the resources to do it
  • Obstacles beyond their control[20]

I’d also add to this the issue of alienation from one’s work. This means a lack of application due to (at one level) boredom and (at a higher level) frustration with how things work and how one interacts with and influences processes and systems. Particularly in organisations that push agility and adaptation to change, alienation from one’s work is increased due to a feeling of powerlessness that comes from witnessing rapid change without having any significant input that could slow said change or actively reform it.

A feeling of powerlessness links to all these measures of underperformance, as they are produced in situations where individual skillsets and aptitudes are not integrated into the wider organisational culture. Instead cultures of command-and-control or of non-direction produce these emergent behaviours. Lack of control means that members of an organisation are in a situation where voice is superfluous, so they either direct their own work irrelevant of wider regulations and controls or do work to the minimum of their ability.

Thus engagement and powerlessness have become the terminology through which performance management and HR have fixed their lens. The emphasis is on empowerment, autonomy and unlocking potential via development. In the cases mentioned so far, the indications have been largely positive, showing a trend away from top-down methods toward mutual feedback and the melting of HR into the wider ideological cortex, becoming a facilitator and co-creator of standards, thereby developing adaptable talent management strategies that help prevent ossification. However darker elements can and have appeared. Google’s troubles with protestors in 2018 are indicative. “The so-called techlash has cast a pall over the entire sector, organized employee pushback is slowly becoming part of the landscape: Amazon workers are demanding more action from the company on battling climate change; at Microsoft, employees say they don’t want to build technology for warfare; at Salesforce, a group has lobbied management to end its work with the U.S. Customs and Border Protection agency. Meanwhile, there’s not a company in the sector that isn’t grappling at some level with the ways bro-gramming culture has made tech a toxic space for women and employees of color”[21]. The growing culture of empowerment has wrought these companies guiding ideologies asunder, as members feel an entitlement to move them in different directions. Google’s mantra of “don’t be evil” has led to an internal culture war between senior managers and their staff of programmers and other rank-and-file, where the latter take the mantra much more literally. This growing culture in tech companies (as well as higher education and non-profits) has meant that empowerment has led to a feeling of stakeholdership that allows them to implement change and directly engage with the technostructure (rather than just passively move within its flows). The dissolving of HR into a facilitator means that members have become co-creators and influencers of the surrounding organisational ideologies, lashing out when their co-creative role is diminished or ignored.

As performance has become practice, human capital and values have become kingmakers in organisational membership. Organisations are increasingly becoming multiplicities of loosely affiliated departments, divisions, teams or units[22]. Their core strategic departments get caught in these flows, becoming “intra-competitive networks”[23] that attempt to implant their domain’s practices and patterns within the wider competitive-cooperative currents of an organisation’s interactions. “This sort of communication is vital for constituting organizations because organizations exist in human societies that already are organized, that already have institutional ways of maintaining order, allocating material resources, regulating trade, and dividing labor”[24]. And therefore this opens up organisations to all sorts of different forces and backlashes that can be destabilising, with the institutional reversal of the Google protests or the increasing need to empower students and faculty within HE environments being indicative.

As empowerment and development become the watchwords of performance management, and human capital and ideology the structural elements of HR management and business values, these reversals may potentially grow as will the rhizomatic multiplicity of organisational fragmentation and diversification, leading to new methods of voice and exit within institutional boundaries, making those boundaries fuzzier and creating all new modes of institutional existence, whether they be adhocracies, agile HR or other flow mechanics that bend and twist in variable ways. For example, “the sheer complexity of the IT stack we rely on today as individuals. Today, each of us lives within what I call a frankenstack. An assemblage of information technologies duct-taped together with a mess of protocols, and forming what philosophers call a rhizomatic structure”[25]. These frankenstacks and rhizomes present an iceberg of organisational possibilities and methods for institutional reversal, expanding the reach and currents of intra-competitive networks and corporate forms. Performance has become practice and now practice is expanding to power over voice and exit.

[1] https://www.12manage.com/methods_mintzberg_configurations.html

[2] Bianca A.C. Groen, Celeste P.M. Wilderom & Marc J.F. Wouters, High Job Performance Through Co-Developing Performance Measures with Employees

[3] Bianca A.C. Groen, Celeste P.M. Wilderom & Marc J.F. Wouters, High Job Performance Through Co-Developing Performance Measures with Employees

[4] https://hbr.org/2016/10/the-performance-management-revolution

[5] https://hbr.org/2016/10/the-performance-management-revolution

[6] https://www2.mmu.ac.uk/media/mmuacuk/content/documents/human-resources/a-z/guidance-procedures-and-handbooks/Performance_Management_Guide.pdf

[7] Michael Armstrong, A Handbook of Human Resource Management Practice

[8] https://archive.acas.org.uk/media/6055/Improvement-required-A-mixed-methods-study-of-employers-use-of-Performance-Management-systems/pdf/Improvement_required_A_mixed-methods_study_of_employers__use_of_Performance_Management_systems.pdf

[9] https://archive.acas.org.uk/media/6055/Improvement-required-A-mixed-methods-study-of-employers-use-of-Performance-Management-systems/pdf/Improvement_required_A_mixed-methods_study_of_employers__use_of_Performance_Management_systems.pdf

[10] https://archive.acas.org.uk/media/6055/Improvement-required-A-mixed-methods-study-of-employers-use-of-Performance-Management-systems/pdf/Improvement_required_A_mixed-methods_study_of_employers__use_of_Performance_Management_systems.pdf

[11] https://www.peoplemanagement.co.uk/voices/comment/fix-performance-management

[12] Michael Armstrong, A Handbook of Human Resource Management Practice

[13] https://hbr.org/2015/04/reinventing-performance-management

[14] https://hbr.org/2014/01/how-netflix-reinvented-hr

[15] https://hbr.org/2016/10/the-performance-management-revolution

[16] Donna Morris, Death to the Performance Review: How Adobe Reinvented Performance Management and Transformed Its Business

[17] https://www.mckinsey.com/business-functions/organization/our-insights/adhocracy-for-an-agile-age

[18] Scott Lawley, Deleuze’s Rhizome and the Study of Organization: Conceptual Movement and an Open Future

[19] https://www.impraise.com/blog/how-ge-renews-performance-management-from-stack-ranking-to-continuous-feedback

[20] https://www2.mmu.ac.uk/media/mmuacuk/content/documents/human-resources/a-z/guidance-procedures-and-handbooks/Performance_Management_Guide.pdf

[21] https://finance.yahoo.com/news/inside-google-apos-civil-war-103000123-023604701.html

[22] https://thelibertarianideal.com/2020/01/19/organisational-mechanics-of-voice-and-exit/

[23] https://thelibertarianideal.com/2019/01/27/politics-of-nodes/

[24] http://www.cios.org/EJCPUBLIC/010/1/01017.html

[25] https://breakingsmart.substack.com/p/frankenstacks-and-rhizomes

5 thoughts on “The Transformation of Human Resource Management: Performance as Practice

  1. all the paradigms presented in these texts are ironically anachronistic, they seem to be a period prior to internet 2.0

    interesting, but the fact that employees of high-tech companies have the possibility to demand a politically correct or a ecologically correct management only reveals the helplessness of these employees in the face of the gigantic power of capital.

    Like

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