The workplace has changed radically in the aftermath of the COVID-19 pandemic, especially for small businesses. Employees have different expectations for corporate culture, and managers are taking notice. As a result, new trends are emerging for performance management and employee reviews. The good news is that these changes not only deliver a superior employee experience but also benefit the businesses that implement them.
Balancing AI with the human element
The first trend is the integration of AI and other advanced technologies into performance management. AI-based software and automation promise to make work quicker and easier for employees, and in my experience working for small businesses, this is sometimes true.
When properly programmed, these systems can send time-sensitive reminders and notifications that help managers ensure deliverables are ready when they should be. They also do a great job of giving the team a central location to find information about projects and share updates in real-time. This keeps everyone organized and pulling together. Furthermore, these tools excel at collecting data, such as employee survey feedback, and crunching statistics, such as quantitative KPIs for upcoming reviews.
As advanced as today’s technology might be, however, it still is only as good as its programming, and human beings are the ones doing that programming. To be effective, AI also needs extensive oversight.
The truth is that all that programming and oversight can add up to a lot of work. Indeed, a recent survey found that 77% of employees report that AI has added to their workload while decreasing their productivity.
In addition, even the most sophisticated AI can’t offer the human element vital for effective performance management in small business environments. Human managers play a key role by practicing emotional intelligence and demonstrating empathy for the members of their teams. Along with fostering employees’ loyalty, when leaders display empathy, studies show they also get increased performance in return.
For these reasons, savvy business leaders are refining their use of AI-based tools, balancing them with the human element.
Giving feedback on a continuous basis
If a small business’s employee is underperforming, managers must address the issue as soon as it appears rather than wait for an annual performance review to bring it up. To do this, managers should increasingly hold regularly scheduled one-on-ones with their direct reports.
By meeting with their employees consistently and often, managers can be proactive, ask questions, and get their perspective on any performance issues they may exhibit in an informal way. That way, if something is preventing the employee from completing an assignment on time, the staff member can bring it to the manager’s attention. Removing systemic roadblocks like these can benefit the entire organization.
If the employee can resolve the issue themselves, this approach also gives supervisors space to collaborate with the individual and find the most advantageous solutions. In this way, small business managers are shifting away from judging and rating employees’ past performance and focusing instead on helping them develop and achieve their goals. Including the employee in this manner boosts their commitment to making the change and maximizes the chances of their future success.
Another beneficial byproduct of these frequent one-on-ones is that employees gain a safe place to air any frustrations they might have with the organization. People often just want to be heard — they don’t actually need or expect changes to be made. When managers host these regular sessions, they ensure everyone on their team has an outlet for this important kind of venting.
Additionally, these one-on-one meetings enable managers to grow closer to their employees, fostering the kinds of workplace connections that correlate with increased engagement and productivity. For instance, a recent Gallup Poll found that the business becomes safer and more profitable when employees have a best friend at work. Inventory control improves, and so does retention.
Meanwhile, annual performance reviews are taking on a new role, giving employees and their managers a chance to appreciate their progress over the past year and celebrate their tenure with the company. In this way, these meetings that many employees previously experienced as stressful are becoming much more positive.
Inspiring employee engagement
The days of leaders making major organizational decisions only with the guidance of their inner circle might not be entirely over, but they should be. Many of today’s employees also expect leadership to give them a voice, particularly in a small business environment.
As a result, another trend in performance management is creating company cultures that provide psychological safety and encourage honest communication throughout the organization. This means ensuring people feel like they belong and have a valuable contribution to make to the company’s mission, which involves training leadership and management to listen to negative feedback from employees without reacting defensively.
Empowering employees to work at the times that would be best for them is another way small business leaders and managers are revolutionizing the workplace. Ever since the pandemic showed how much work could be done effectively from a distance and how much more flexibility employees could have over their lives, few have wanted to go back to the rigid policies of the past. According to a Randstad survey, “An overwhelming majority of respondents—83% overall—want flexible working hours,” and another 42% said they would turn down a job offer if it wouldn’t give them flexibility.
Importantly, studies indicate that companies with healthy, positive cultures keep their valued employees longer, tend to have an easier time recruiting new talent, and even make more money.
Making the workplace better
Appreciating the human element, moving toward continuous feedback, and nurturing positive company cultures — these trends in performance management are making the workplace better for both employees and their employers. By making these changes, small businesses can reap their rewards.
Tiffani Martinez is the Human Resource Director at Otter PR.
Performance management stock image by Monster Ztudio/Shutterstock
