Technology’s Impact on the Performance Management Transformation
Organizations are facing unprecedented levels of change as forces like hypercompetition, knowledge commoditization, and technology are having a significant impact on performance and threating organizational survival. These pressures, combined with the shortcomings of existing performance management (PM) approaches, are forcing organizations to develop more effective PM practices. Competing effectively in this environment demands novel, cutting-edge, and more impactful approaches. There has been a movement toward processes that are data driven, flexible, continuous, engaging, future focused, and development oriented and that allow for more informed decision-making by organizations, managers, and employees. To support and drive this transformation, organizations are increasingly relying on technology, people analytics, and data science solutions. This chapter reviews the evolution of PM technology, examines its potential to add value and lead to behavioral change, reviews possible limitations and barriers to implementation to ensure the hype is not outpacing reality, and provides practical guidance for organizations looking to implement these new technologies. It is argued that advances in technology can support the activities needed to truly drive performance, but that it does not create change in and of itself. Emergent technology must be combined with organizational change strategies and evaluated for its individual, team, and organizational impact. In addition, it is imperative to examine how technology can be most effectively leveraged to improve specific performance-driving behaviors that the research has shown lead to more impactful performance management approaches rather than simply automating processes that have not worked well in the past.