As is expected at this time of year, everyone is trying to predict what the next year will bring. With HR technology, this is especially interesting since we're in the midst of an evolution of the industry. At times it felt like 2015 was the year where the mainstream in HR talk was the move from employee evaluation to proactive employee development, from wondering how to maximize employee productivity to asking how we can access and activate employees' internal motivation.
All this makes predicting the future a bit easier, since I see the current trends only growing stronger and stronger. Here are the top 5 trends that I see shaping the HR industry in 2016:
1. Performance reviews are on their way out
The performance review has been with us for what seems like an eternity. For many, it is almost synonymous with large corporations and their culture. But this year, something radical and fascinating happened - two of the biggest of those corporations decided they weren't going to be doing performance reviews any more. Both Deloitte and Accenture stopped using performance reviews, and this begs the question - why?
The simple and obvious answer is that performance reviews aren't worth all the energy and resources they demand. This isn't to say that performance reviews have no value, but the way they are being done today just doesn't make sense, especially when better and more efficient options exist.
- For starters, the benchmarks and standards being used on performance reviews are ancient in today's fast paced business environment. In other words, measuring employees against goals that were set a whole year ago just doesn't make sense.
- Secondly, the singular annual performance review makes for an extremely stressful environment for employees. They feel like they have one hit or miss chance to be assessed for their performance throughout the year. For them, it isn't about a positive experience of feedback. Being rated makes them anxious.
- Thirdly, like many other components of old school HR, performance reviews are focused on the past, with no attention to how future performance can be improved.
In 2015 we saw this transition from thinking about employee evaluation to employee development. In operational terms, this means moving from the performance review to real time tracking of performance, elearning and coaching, ongoing benchmarking and finally, feedback. This can be accomplished with gamification - using it as an activity tracker for work.
If all this isn't enough to convince you why it's time to leave performance reviews in the past, there's the fundamental question of objectivity. Tracking real-time performance with software, is objective. Managers receive clean, analyzable, data. There's no need to worry about it being skewed by opinions, or personal likes or dislikes. It's just plain facts, and that makes employees far more comfortable about it.
2. The OKR era
OKR, or "Objectives and Key Results", is an innovative way to define, track and communicate goals and results in the workplace. The main goal of the OKR technique is to bring the goals of the company, the team and the individual together.
OKRs work by defining ambitious Objectives and then using Key Results in order to make an objective achievable, quantifiable and objectively gradeable. The OKR method emphasizes transparency, so that employees can see what others in the company have set as objectives and key results, which aligns employees with corporate objectives. Interestingly, what we are seeing as the replacement of the performance review is a real-time, transparent, and fair system which shows all employees what is happening in the company, while defining goals in an objective manner and tracking performance so that those goals can be achieved.
Make no mistake, this isn't (just) about ideology. All the data shows that this makes for better performing employees and companies.
3. The Internet of things changes everything, including the workplace
You might have heard about the next big leap in technology, the Internet of Things (or IoT). It's that futuristic world where your refrigerator orders milk from the grocery store on its own and your stereo system chooses music according to your mood. One of the obvious fields effected by this will be the workplace. More and more people are warming to the idea of the quantified self and what you might call, the quantified employee. Using work badges, smartphones, health gadgets and other technology, it is becoming more and more possible to receive high quality information about employees, their work habits, their weak spots as well as their strengths, who they talk to, etc.
Again, having this real time data enables managers to offer constant feedback, tailored to the employees' needs. It also sets the stage for real time tracking of performance.
4. It's all about analytics
Like IoT, this is another macro trend which has huge ramifications for the HR technology industry. These are early days but there are many fascinating directions that this can go. It may become possible to predict which actions will be the best motivators for different kinds of employees. Rather, we may see managers being able to see that different work hours work better for different employees, thus allowing more flexible schedules. The important thing here is that the emphasis is on motivation and employee development. When used intelligently, data science can really help each of us become better at what we do, more motivated, and more efficient. It's an exciting prospect.
5. Millennials are now the norm
2015 was the year that millennials became the largest generation in the current workforce. By 2020, they will form 50% of the global workforce, and they see work in a very different light than those who preceded them. Millennials expect to work at an environment that appreciates their unique talents and that will allow them to develop as people as well as employees. They are the most informed generation ever, and as such, they expect information to be shared freely, fluidly and easily, and can become frustrated when that isn't the case. Millennials are interested in more than just their paychecks, looking in to prospective companies' cultures, hierarchy systems and core values. They don't want to just make a living, they want to be a part of something that they feel is worth their while.
Reading between the lines, it is easy to see how these differences make classic corporate environments aversive to many in this generation. That is, if these corporations aren't able to address these issues and make themselves accommodating to these new employees who are coming in to the workforce and will soon take over. This is where gamification can play a huge role. In many ways, gamification is the perfect platform for millennials - it offers constant feedback, ways to easily share information, constant learning opportunities, and clear communication mechanisms. Gamification can also offer solutions to other needs of millennials as it offers recognition for a job well done and allows for employees to see for themselves how they are developing, mastering new skills, and becoming better employees overall.
Finally, there is one more point worth addressing regarding millennials - They are the most digital generation ever. To them, ideas such as tracking, quantified self, digital communication, are all a second nature. They have no qualms about being measured, have different perceptions regarding privacy, and are more receptive to how digital mechanisms can improve their lives.
Some modest predictions for 2016 - will gamification morph into workforce performance management?
Gamification had its heyday a few years ago, when it was all the rage. As I've written in the past, that was proved to be premature. The past year was great for gamification, and gives me good reason to suspect that gamification as an industry had the time it needed to grow and mature, and that now it is really ready to create huge impact in different industries.
We are seeing unprecedented interest in our industry on the business side. It seems like we may finally be able to challenge that famous ruling by Gartner that 80% of all gamification projects will fail. The difference is seeing gamification as a workforce performance management layer added to the workplace, working for a world with millennials, a need for new ways to develop employees and give them real time feedback and engagement.