Performance Management in the Gig Economy
We see big changes ahead in performance management. Organizations like GE and Accenture are experimenting with new approaches to that old shibboleth: the annual performance review. And far-thinking companies are replacing the annual rating and ranking process with more-timely capture of critical incidents and authentic spot feedback.
But one important and growing population in organizations isn’t benefiting from this feedback renaissance. They’re the external professionals your organization increasingly counts on: freelancers, gigsters, advisers, and consultants, the people we call agile talent in our new book. In our research, performance management is the weakest link in managing and engaging agile talent and in gaining the greatest productivity from your external talent investment.
According to Deloitte, external workers may represent 30% or more of your organizations’ true workforce. Freelancers Union reports that as much as 40% of the U.S. workforce views themselves as freelancers. And our research found that over 50% of leaders fully expect agile talent to increase as a percentage of total employees. Why? Certainly, one goal is cost efficiency. But the more important drivers are speed, flexibility, and innovation.
Most organizations, however, are not set up to benefit from their increased investment in agile talent. Research by PMI describes most problems in project performance as being the result of alignment issues. Our findings concur. And the alignment gap is greatest when it comes to performance management.
What can we do to close the performance alignment gap? Our research suggests six important steps:
Too often agile talent reports that they are excluded from critical meetings and discussions that would provide helpful — and sometimes essential — context for their work. Our data show that both agile talent and their client organizations miss critical opportunities to provide a thorough orientation to the work and its importance.
Measure more than cost, schedule, and quality
Defining the usual measures isn’t enough. Agile talent wants to know the nuances, and they’re particularly concerned that issues like cultural fit or other “soft” factors are often left unsaid or undefined until problems arise, creating additional cost or difficulty and enabling preventable conflict with internal colleagues.
Encourage agile talent to communicate concerns before problems bloom
To resolve problems before they affect a project, organizational leaders must sincerely encourage agile talent to communicate concerns. Our interviews reinforce the importance of regular review and a well-defined agenda for review. Rapport, the secret sauce of open discussion, blooms when agile talent is regularly invited and expected to honestly discuss potential problems.
Demonstrate two-way feedback
But encouragement isn’t enough. When we ask agile talent whether their client organizations really want feedback, we often see more teeth-gnashing than affirmation. We learned that boundaries are important in two-way feedback — for example, “We talk about issues, not individuals,” or what some people call the “no gossip” rule.
Make sure the right managers are supervising your agile talent
Is your organization assigning the right professionals and managers to supervise agile talent and their work? We heard time and again from external experts about the importance of both a performance and a developmental mind-set. Managers who are performance-oriented but not developmental may assess well but not provide effective feedback and coaching. Managers who focus on development more than performance may miss when it comes to frank, tough assessments. Good managers of agile talent — just like good managers of FTEs — do both.
Acknowledge excellence and share the news
Finally, agile talent is just as motivated by appreciation and recognition as your full-time employees — more so, in fact, given that client satisfaction is the basis for their career success. Whether through something as simple as public praise or as personal as sending a dozen flowers and a handwritten letter, reinforce with acknowledgement and thanks. And let colleagues know.
Agile talent is growing and here to stay, and organizational leaders are increasingly turning to external experts to provide the speed, flexibility, and innovation they need and to more cost-effectively plan initiatives. But organizations will only gain the full benefits they seek if they recognize that their agile talent needs strong performance management support too.
This article was originally published in Harvard Business Review.